I could be wrong about this, and I do not havbe the Oswald and Blanchflower book in front of me (I reviewd this book, Card's and Krueger's book on the minimum wage, and Botwinnick's "Persistent Inequality" in a Monthly Review article last year). But the O and B book is based on a multi-million sample from the entire world and not just for the U.S. whereas Boushey's paper is for the U.S. alone.
michael yates
William S. Lear wrote:
> The latest LBO (#84) arrived with the usual mix of outstanding
> writing, among which is a shortish, potent piece by Heather Boushey on
> "Unemployment, Pay, and Race".
>
> 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