At 8:52 PM 2/13/96, Robert Peter Burns wrote: > In all of the countries that [Blanchflower and > Oswald] studied (United States, Great Britain, > Germany, Austria, Italy, Netherlands, Ireland, > Switzerland, Norway, Canada, and South Korea), > they found an inverse relationship between > unemployment rates and the level of wages. > [i.e. higher wages correlate with lower unemployment] > In fact, this relationship appears to be amazingly > stable. The data show that a doubling of the unemployment > rate is associated with a ten percent decline in the level > of wages, regardless of country. > >This suggests that wage-cutting is not the route to >lower unemployment, as the endless neoclassical dogmatists >would have us all believe. Comments? I did a similar exercise with most of the OECD countries and found no relation between wages and unemployment, but admittedly my statistical techniques are rather underdeveloped. John Eatwell gave a very interesting presentation, based on a paper he's done for UNCTAD, at the New School the other day. His argument is that the "low" unemployment countries (Japan and the US among the G7) actually have lots of disguised unemployment in the form of low-wage, low-productivity service jobs. By his estimate, the real US unemployment rate is about twice the reported rate. Rather oddly, Eatwell was surprisingly friendly towards the US approach; he said it was probably better to have a crappy pizza delivery job than it was to stay home collecting the dole and watching TV. Has social democracy come to this, apologizing for Domino's? Doug -- Doug Henwood Left Business Observer 250 W 85 St New York NY 10024-3217 USA +1-212-874-4020 voice +1-212-874-3137 fax email: <[EMAIL PROTECTED]> web: <http://www.panix.com/~dhenwood/LBO_home.html>
