Every excess supply of labour in System II causes a fall in money wages
In the case of the supply shock, it is intuitively clear that if the firm had to ride out both states of the economy with all hands on board, even under pure fixed money wages
the instability would not influence the ultimate size of the residual share.
The assumptions of free entry and flexible money wages
force all firms to earn zero profits, even though suboptimal prices may prevail.
In general, in the Ricardo-Sraffa case, when the real wage is taken as given together with the matrix of technical coefficients, the solution refers to prices and to the rate of profit; in the Smithian case--when the money wage
is taken as given (as the numeraire of the system) together with the rate of profit (as the expression of the monopolistic type power of capitalists)--the solution of the model refers to prices and to the real wage.
Pigou maintains that a reduction of money wages
will have the same effect as a reduction in real wages' (Rymes 1989, p.
Among the impulses fostering recovery and then a new expansion, the decrease of prices--with money wages
falling less or remaining stable--plays a key role, since this impulse is spontaneous and systematic, in contrast with those mentioned earlier--government expenditure, autonomous innovation, and foreign demand.
The capital productivity would lag behind and higher profits would be associated with less than proportionate increase in money wages
, with decreases in the real wages.
Depression (1933-1939): the Depression, of course, started in 1929 (hence one segment of the Early 20th Century data stops in that year); but Samuelson and Solow observe that '1933 to 1941 appear to be sui generis: money wages
rose or failed to fall in the face of massive unemployment' (188).
One way of ensuring that there is no debauchment in the value of money is to have an adequate reserve army of labour which ensures that money wages
do not increase autonomously.
Scots still don't know what money wages
, pensions and benefits would be paid in.
Beyond the persistently subpar employment growth shown in figure 1, the most obvious symptom, repeated in the June labor market report, has been stagnant real wages (figure 3): year-over-year money wages
rising at 2 percent while inflation in the 1.
Trade unions might use their bargaining power to negotiate for increases in money wages
to protect the real wages of union members.