"This paper argues that rigid wages cannot provide the underpinnings of a universally valid theory of the business cycle, simply because wages are not universally rigid.
Author: Robert James Gordon
Category: Collective labor agreements
This paper argues that rigid wages cannot provide the underpinnings of a universally valid theory of the business cycle, simply because wages are not universally rigid. Several different statistical techniques suggest that wage rates in the U.K. and Japan are between three and 15 times more flexible than in the U.S. during the postwar period. Corresponding to greater flexibility in wages, these two countries also exhibit more stable employment behavior over the business cycle. In historical data covering the period between the late-nineteenth-century and 1940, U.S. wage behavior appears to be much more similar to that in Britain and Japan. The contrast between the prewar data and the postwar data, where the U.S. is a definite outlier, suggests that the 1948 invention of the three-year staggered U.S. wage contract may be the crucial factor underlying sluggish U.S. postwar wage dynamics. A theoretical section attempts to distill from recent literature those features of labor market institutions that are regarded as optimal by economic theory. Japanese institutions exhibit more similarity to this theoretical paradigm than those in the U.S. or U.K. Economic theory predicts that long-duration contracts, like those in the postwar U.S., are more likely to emerge when the perceived cost of renegotiation is high, but we must appeal to history and cultural differences to explain why conflict avoidance plays a more prominent role in the development of Japanese labor market institutions than in the American case. In this comparison Britain is the odd-man-out, with well-publicized industrial strife, together with short contract durations. I appeal to history, the different legal tradition, and the nature of the British unions themselves to explain why the three-year contract became established in America but not in Britain
The only really novel problem faced in 1971 was the complete absence of any organization or staff at the time the ... The growth during the postwar period of statistical data has greatly facilitated analysis of wage behavior and of the ...
Category: Labor laws and legislation
Publishes in-depth articles on labor subjects, current labor statistics, information about current labor contracts, and book reviews.
The data also suggest, however, that at comparable rates of unemployment average hourly earnings in manufacturing tended to rise more rapidly in the postwar years than in the period prior to 1930. Postwar wage behavior does seem to be ...
In Wage Determination in the Postwar Period , Bowen employs quarterly and monthly data for the American economy over the period 1947-1959 . ... 34 Williain G. Bowen , Wage Behavior in the Postwar Period ( Princeton , N.J .
18 See William G. Bowen , Wage Behavior in the Postwar Period ( Princeton , N.J .: Princeton University Press , 1960 , chap . iii , and Robert R. France , " Wages , Unemployment and Prices in the United States , ” Industrial and Labor ...
A rough indication of interindustry differences in average hourly earnings behavior over short periods of time can be obtained from William G. Bowen , Wage Behavior in the Postwar Period : An Empirical Analysis , Princeton , N.J. ...
Release on 1968 | by United States. Bureau of Labor Statistics
1 Most studies of wage behavior in the United states have attempted to explain wage developnents in very broad groupings ... behavior over short periods of time can be obtained from William G. Bowen , Wage Behavior in the Postwar Period ...