3) Flexible labour market era--1983-present: Considerable periods well below high (let alone full) employment; much greater variation in changes of average money wages
by industry; above the Salter rule in relatively high productivity, expanding industries; below the Salter rule in relatively low productivity, declining industries.
Like Phillips, Samuelson and Solow looked at sub-samples, noting that money wages
rose or failed to fall during the high unemployment era of 1933 to 1941, which they suggested might be due to the workings of the New Deal.
W Phillips (1958) analyzed the relationship between money wages
and unemployment in the United Kingdom between 1961 and 1957.
Children who did not earn money wages
received food and lodgings, but the two types of remuneration did not necessarily exclude each other; about 10% of all children earning a money-wage also lived with their employer.
To sum up: The completed theory of activity that incorporates the above modeling of natural unemployment into the 1960s modeling says that employment increases in either or both of two ways: Increased effective demand lifts employment off its present equilibrium path and actual money wages
climb above their expected path.
Keynes always understood that unemployment was a result of real wages that were too high, but he simply assumed that money wages
could not be reduced because of unions and other causes of wage "rigidities.
This censoring occurs because of workers' reluctance to take cuts in money wages
(and perhaps also firms' reluctance to give them).
Some employees may consider nominal wage cuts insulting or unfair, so that money wages
may be sticky downward.
And he warned that the adverse effect of the rise in the oil prices on consumers' purchasing power could not be avoided; that inflation would be "above target" in the short-term, and that attempts to claw back lost purchasing power by bidding up money wages
would only result in higher unemployment.
The other way employees pay, and usually this applies for the much larger share of insured workers (about 75 percent on average), is in the form of lower money wages
The second part is institutional and is divided into two sections: Chapter III on money wages
and non-wage benefits and Chapters XI and XII describe wage administration.
Ordinarily, an independent increase in money wages
(costs) of Memphis firms will result in increased spending by those who receive the increased wages in markets other than those serviced by Memphis firms--an increase in the leak.