On Sun, Mar 30, 2008 at 4:55 PM, Jim Devine <[EMAIL PROTECTED]> wrote: > Robert Naiman wrote: > > Folks can argue that particular groups of workers are in a poor > > bargaining position, but then this indicates that 1) we're talking > > about a differential rise in the price level, not a general rise in > > the price level > > no, it says that we're talking about a differential rise in the wage > level. The average price can rise even if relative wages are changing.
In graduate school they taught me that wages are a price. :) If all prices are rising at the same rate, then all wages are rising at the same rate. > > and 2) the cost to these workers of the rise in > > inflation has to be traded off against the cost to them of Fed > > policies that, justified on the basis of reducing inflation, reduce > > employment, and therefore reduce these workers' bargaining power. > > I don't get this. The rise of the unemployment rate will likely hit > those with the least bargaining power the most, though there are > exceptions: the sustained rise in the US$ hit groups -- industrial > workers in exporting industries -- that had typically had more > bargaining power than most. Right. So we agree that, in general, under the differential rise in prices/wages story, the workers who are most likely to be hurt the most by an increase in inflation are also the workers most likely to be hurt the most by an increase in unemployment. And therefore, if the standard policy tool for addressing the threat of inflation is to increase unemployment, these workers should be very wary about jumping on the price stability bandwagon. > -- > > > Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own > way and let people talk.) -- Karl, paraphrasing Dante. > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
