Capitalism, declining wages, downward nominal wage rigidity, Federal Reserve, idiot savants, Michael Parenti, orthodox economists, Paul Krugman, Robert Kuttner, studied myopia, Systemic Disorder, the Austrian school of economics, the “sticky wages” problem, the Great Depression and wages, the Mises Institute, the virtues of self-reliance, unemployment, unwilling workers, wage disparities, Wage reduction, wage stagnation, wages outpaced by productivity gains
The Federal Reserve has declared that the reason for ongoing economic weakness is because wages have not fallen enough. Wages have been stagnant for four decades while productivity has soared, but nonetheless orthodox economists believe the collapse of 2008 has been a missed opportunity.
A paper prepared by two senior researchers with the San Francisco branch of the U.S. Federal Reserve Bank attempts to explain the lack of wage growth experienced as unemployment has fallen over the past couple of years this way:
“One explanation for this pattern is the hesitancy of employers to reduce wages and the reluctance of workers to accept wage cuts, even during recessions, a behavior known as downward nominal wage rigidity.”
The two Federal Reserve researchers, Mary Daly and Bart Hobijn, based their argument on the standard ideology of orthodox economists, writing:
“Downward rigidities prevent businesses from reducing wages as much as they would like…
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