Document Type
Discussion Paper
Publication Date
11-1-1997
CFDP Number
1167
CFDP Pages
40
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.
Recommended Citation
Bewley, Truman F., "Why Not Cut Pay?" (1997). Cowles Foundation Discussion Papers. 1415.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/1415