CC: . . . Given any collection of quantities (a, b, c, d . . .) it is a
tautology that one can equate any one of them with unity, then express each
quantity in terms of the selected one. Hence one could, for example, take
the average wage of bank window clerks as unity and express every other wage
as some multiple of that wage. Is there any theoretical *or* empirical
reason to believe some one wage should be set at unity in that all others
vary as it does, but it is not affected by others?
[mbs] my point does not depend on designating any kind
of index wage that obliges all others to follow it.
It is simply that for workers in the same labor market,
there is pressure for wages to converge to some degree,
so that if there are increases in wages above the median,
that should pull up lower wages. If the sandwichman
makes five bucks and the autoworker fifteen, you could
normalize the former at one, making the latter three.
It would still follow, by my hypothesis, that a rise
for the autoworker has some positive impact on the
sandwichman.
I take the point that an increase anywhere ought to
help the entire wage distribution, if we are talking
about money, so in this sense the auto worker is no
more key than the sandwichman. Some dimensions of
labor standards might be different -- all or nothing
benefits, such as safety rules.
>>>>>
My own guess would be that *if* there is a key wage it is the wage for
non-labor (public aid, disability, unemployment, etc.). I have no evidence
for this. Mere speculation. Wages paid illegals might fall in the same
category.
Carrol
[mbs]
Insofar as this is a different labor market, there is
less impact on other markets. It is less easy to
substitute across groups. There is a lot of evidence
that public benefits affect low-wage labor markets,
including Cloward & Piven's Regulating the Poor.
Suppose we turned the question around. What trade
policy would best serve service sector workers --
one that improved the (higher) wages of manufacturing
jobs (for which service sector workers were qualified)
and made these jobs more plentiful, or one that reduced
the price of consumption goods and created more jobs in
sectors with below-average wages.
mbs
