Evidence we don't need no stinkin evidence . . .
On the theory side, the simple idea that if a person
with given skills can suitably perform the duties of
an auto worker or sandwich man, there is some
pressure on employers to offer more similar wages
than otherwise (lower for the auto maker, higher
for the sandwich mogul).
The greater the sphere of high-labor standards
jobs, the more pressure on other sectors to
conform. An injury to one is an injury to all,
in the vernacular. If this is wrong, I've been
wasting a lot of time.
In public economics, there is the noteworthy literature
on the 'cost disease' in public services launched by
Baumol -- increases in productivity and wages force
lower productivity industries to bid up their wages
in order to secure labor. More specifically, it obliges
the public sector to raise spending to maintain a given
output of services. Baumol also applied this to the
arts.
For more than that, you'll have to consult a real labor
economist, which I am not.
cheers,
mbs
Max, what theory/empirical evidence lays behind your statement:
> the wage of the 'guy in the auto plant' is crucial
> in putting upward pressure on labor standards in general.
I�ve just started to do research on the spillover (or lack of spillover) of
wage increases (decreases) from one �key� industry to other �nonkey�
industries and on the existence (or not) of an economy-wide �standard� for
wage increases.
I�ve yet to reach any conclusions.
So, any thoughts on this (mechanism of spillover, how �standard� set, etc)
would be appreciated.
Eric
Eric Nilsson
Economics
California State University, San Bernardino
San Bernardino, CA 91711
[EMAIL PROTECTED]
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