Listening to a Nobel Laureate Get It Wrong
Falling Wage Syndrome
By PAUL KRUGMAN
Wages are falling all across America.
Some of the wage cuts, like the givebacks by Chrysler workers, are the price of federal aid. Others, like the tentative agreement on a salary cut here at The Times, are the result of discussions between employers and their union employees. Still others reflect the brute fact of a weak labor market: workers don’t dare protest when their wages are cut, because they don’t think they can find other jobs.
Whatever the specifics, however, falling wages are a symptom of a sick economy. And they’re a symptom that can make the economy even sicker.
Wrong target, Paul. Falling wages are not a symptom, they are a result. The sickness of this economy is evidenced by fraud, greed and engineered bubbles.
The cure is what we are watching and, that includes falling values, lost investment and falling wages.. . . After all, many workers are accepting pay cuts in order to save jobs. What’s wrong with that?
The answer lies in one of tho…