| Reducing the pay of the chancellor, won't provide enough money to pay every low wage employee at the university a "living wage". He's only one person. Also its a separate issue. If they are able to pay chancellors less, without being priced out of the market for good ones, then they should go ahead and do so. They may not be able to. If they can, you still have the same trade offs with that money that are mentioned in the blog post. You can use it to increase security guards' pay, you can use it to increase other low income employee's pay, you can use it to over scholarships, to offer financial aid, or decrease tuition, you can use it to bring in a star professor or maybe multiple professors, or to increase service for students, or any number of other things. Finding one way to possibly save money, doesn't mean that you have eliminated trade offs, you still have costs and downsides of increasing the wage for the employees. And as Mankiw points out the costs and trade offs include pricing people at the bottom of the employment ladder out of the job. Not only because the costs might lead you to hire less people, but also because people with higher real or perceived qualifications take the job. If the more qualified employees are really better, that is a good thing from the perspective of the school, but the people "at the bottom" that you where trying to helped may in fact be hurt. |
