Economy: Jockeying Over Taxes, Agriculture In Jobs Bill
• "As the Senate this week considers a 'jobs bill' to reduce unemployment, lawmakers will have to decide whether to continue an unprecedented change in how the country treats people who are out of work, which was quietly approved last year," the Washington Post reports.
• "Senate leaders are working on an estate tax deal to make it easier to move a bipartisan jobs bill," The Hill reports.
• "Senate Agriculture Chairwoman Blanche Lincoln," D-Ark., "is pressing to add more than $2 billion for farm disaster aid to an emerging $80 billion-plus package of tax incentives for job creation and safety-net spending for the unemployed," CongressDailyAM (subscription) reports.
How much of a factor in the downturn have been sticky wages and prices? Can you point to sticky wages affecting the level of employment in particular industries, or sticky prices further dampening demand for some goods and services? Is there anything that government could do to effectively unstick wages or prices? Does the incidence of stickiness indicate that unionization (which is at historically low levels) isn't as much of a factor in sticky wages as once thought?
-- John Maggs, NationalJournal.com
Responded on March 10, 2009 2:57 PM
Litan makes a point: this topic will provide future employment to economists.
Otherwise, to say that sticky wages (or prices) play a role in unemployment is a bit like blaming gravity for the collapse of a bridge. It's not of any use to the civil engineers.
Responded on March 2, 2009 10:11 AM
My impression from anecdotal reports -- in the media and in personal conversations -- is that employers are more willing to offer wage cuts in lieu of layoffs, and employees more willing to accept them, in this downturn than in any previous recession of my lifetime. To the extent this occurs, this will mitigate an otherwise horrific decline in employment. In future years, I suspect there will be a number of economists who will be sifting through the data to whether and to what extent wage cutting in fact has happened.