She reviews work by two "esteemed mainstreamers, David Blanchflower and Andrew Oswald" showing (but not stating explicitly) that the relation between unemployment and wages supports predictions made by heterodox theory ("reserve army" stuff) than to that of orthodox theory. She then reports on her own study which follows that of Blanchflower/Oswald, but with a finer comb which distinguishes along lines of race and gender.
I have a few questions about her findings.
Blanchflower and Oswald find that the "elasticity of pay with respect to unemployment" (represented by the "wage curve") is -.10, i.e., if unemployment rises by 1%, wages will drop by 10%.
Her results, however, show much higher elasticities, and she never explains why she obtained such a disparity. Her results are:
category wage elasticity
----------- ---------------
black men -.25
black women -.22
white men -.20
white women -.13
which clearly show a much greater aggregate elasticity than -.10. Any thoughts on this?
Second, I'm curious why white women would be treated far better than any other group. They lose only 65% as much of their wage as white men do, and only about 50% as much as black men do. Is it that the "normal" pay discrepancy for women sort of "automatically" has them set to pay levels nearer to rock-bottom and so they need adjust less when unemployment changes?
Or could this be due to the fact that perhaps the above categories tend to be situated in different occupations or industries in general?
I'd be very curious to see these results broken down by occupation as well ... she mentions that she did code workers according to occupation, so I'll bet she has the stats in her database somewhere ... Doug, any chance she might put her stats up on the web for us?
By the way, Doug's article on "Squeezing Debtors" is also an eye-popping and enraging piece not to be missed.
Bill