There's more dreary news on the economy coming out of the U.S. today - the New York Times blog Economix reports on the latest employment numbers (Hat tip: Payton Deeks). The unemployment rate rose to 6.7 percent, which can't be a good sign for the American or the global economy. But Economix notes what it calls a silver lining:
If there is one silver lining in the report, it’s that pay hasn’t fallen more sharply. Over the past year, the weekly pay of rank-and-file workers, who make up roughly 80 percent of the work force, has risen 2.8 percent. Inflation during the same period was somewhat above 3 percent.
It seems to me it would be better if more people took a paycut and kept their jobs. But for various reasons, wages and prices generally tend to be sticky downwards. Many economists have theories on why this is the case - Tim Harford, former PSD blogger, offers up an explanation in his FT column, the Undercover Economist.
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