Re: rising real wages in a recession

["Ian Murray" <seamus2001@xxxxxxxx>]

----- Original Message -----
From: "Jim Devine" <jdevine@xxxxxxxxxxxxxxx>
To: <pen-l@xxxxxxxxxxxxxxxxxxx>
Sent: Friday, September 07, 2001 3:35 PM
>Subject: [PEN-L:16858] rising real wages in a recession


> Doug wrote: >real wage growth has actually picked up for U.S.
workers -
> it's approaching 2% year-on-year in private services. Service prices
are
> rising more slowly than wages, putting a squeeze on profits. <
>
> oh, yeah, I forgot: is it possible that the economy is sliding
upward along
> a downward-sloping labor demand (= marginal product of labor) curve
(with
> the real wage on the vertical axis & employment on the horizontal),
so that
> as wages rise (due to the greed or shortsightedness of workers) we
see
> employment falling?
>
> as my students say: "yeah, right."
>
> Jim Devine jdevine@xxxxxxx &  http://bellarmine.lmu.edu/~jdevine

===============

You're students are dabbling in a perhaps 'naive' anti-realism
approach to macro it seems.

""Advocates of what might be called the *strong program of
microfoundations* would reject realism with respect to macroeconomic
entities in this sense and, implicitly, reject macroeconomics as a
suitable subject of structural causal analyses. If it could be
established that macroeconomics was a suitable subject for a realist
causal account, then one of the central rationales for the program of
microfoundations for macroeconomics would be eliminated." [Kevin
Hoover 'Causality in Macroeconomics, Cambridge U Press, p. 109]

Ian