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Old 01-03-2012, 09:40 PM
jimM47 jimM47 is offline
 
Join Date: Apr 2007
Posts: 459
Default Re: Matt Yglesias: Creating Jobs by Cutting Wages

In the particular discussion of macroeconomic theory at hand, the existence and meaning of "sticky wages" refers to something more fundamental and pervasive in labor relations than minimum wage laws, which mostly affect particular sectors.

Minimum wage laws are an additional thing that can make wages sticky in the downward direction, but sussing out their effect on the macroeconomy is a complicated empirical question that is beyond my ability to answer for you. It isn't simple multiplication because one sector's loss may be another sector's gain: what is bad for the restaurant industry and reduces employment therein may be good for the frozen dinner industry and increase employment therein.
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