Last week, the employees of Bartle Bogle Hegarty, an advertising agency and, as such, perhaps not noted for its caring, sharing outlook on life, became the latest firm to vote for a pay cut for all, rather than redundancies for some – 99.5% in favour, in fact. Just as the employees of JCB did a few months ago. And Sheffield council workers. And employees of the Wiltshire-based company Airsprung. And a whole host of other firms, just not the one that runs the country; our dear elected representatives voted themselves a 2.33% pay rise.
That\’s an interesting little point. No, not about the MPs and the trough, but about wages being cut. Isn\’t it part of the underlying structure of Keynesianism that wages are sticky downwards? And that because they are an economy cannot be left to sort itself out but must be stimulated?
But if wages aren\’t sticky downwards, doesn\’t that undermine the entire thesis? And make the Austrian analysis more reasonable?