Why Not Cut Pay?

Truman F. Bewley ()
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Truman F. Bewley: Cowles Foundation, Yale University, https://economics.yale.edu/people/emeritus/truman-f-bewley

No 1167, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: Over 300 business people, labor leaders, business consultants, and counselors of unemployed people were interviewed during the recession of the early 1990's in order to learn why wages and salaries were declining in only a few firms. Employers believed that cutting pay would hurt employee morale, leading to lower productivity and current or future difficulties with hiring and retention. There were few indications that unemployed people had excessive wage expectations. On the contrary, many unemployed were too flexible and found themselves rejected by firms as overqualified.

Pages: 40 pages
Date: 1997-11
Note: CFP 963.
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Citations: View citations in EconPapers (3)

Published in European Economic Review (1998), 42: 459-490

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