Governments, corporations, and mainstream economists, like a certain amount of unemployment to keep wages down, which they say keeps inflation down, but there must be a better way? Fortunately, MMT has the job guarantee, where its liveable wage would actually stimulate the economy, so everyone wins, companies, countries, and individuals.
There just isn't enough jobs to go around, but the establishment likes to blame unemployment on the unemployed themselves, calling them work shy, and saying that their benefits are too high.
For the hundred of thousands of unemployed people in Australia, joblessness means living in poverty. But for the people who are supposed to help us back into work, our crisis is nothing more than a financial opportunity – one that’s seen job providers become some of the most profitable businesses in the country.
Our government has built a poverty machine, and it’s time we take it apart.
When you work, we make money.
ReplyDeleteWhen you're unemployed, we make money.
When you're in jail, we make money.
"Governments, corporations, and mainstream economists, like a certain amount of unemployment to keep wages down, which they say keeps inflation down, but there must be a better way?"
ReplyDeleteYou would think that the large reserve army of the unemployed during the Great Depression would drive wages down. And you would be wrong.
Perhaps more significant, and more puzzling, than the behavior of the workweek, was the behavior of the real wage. My paper with Powell showed, for the industry data set used also in this paper, that real wages were typically countercyclical during the prewar period. This countercyclicality is equally apparent if indexes of wage rates: are used instead of average hourly earnings to measure real wages; it seems to have held for the manufacturing sector as a whole (Alan Stockman, 1983) as well as, for individual industries. The tendency of real wages to rise despite high unemployment was especially striking during the major depression cycle (1929—37): real wages rose during the initial downturn (1930—31). They rose sharply again in 1933—34 and 1937, despite unemployment rates of 20.9 percent in 1933, 16.2 percent in 1934, and 9.2 percent in 1937 (according to Darby's correction of Stanley Lebergott's 1964 figures). In contrast, my paper with Powell found some evidence of real wage procyclicality in similar data for the post-war period.
—Essays on the Great Depression (Ben Bernanke) (p. 207)
While nominal wages fell during the Great Depression, prices fell faster than wages, which meant that real wages were rising.