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Politics : Formerly About Advanced Micro Devices
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To: combjelly who wrote (465354)3/20/2009 5:45:57 PM
From: TimF  Read Replies (1) of 1575874
 
Sure if everyone gets a pay cut then its direct effect on employees will be worst than a modest increase in unemployment, but sticky wages can be a serious contributor to more than just a modest decrease.

Also you have to consider the effect on producers and consumers, not just employees. Increased unemployment tends to decrease production. Lower wages lower cost without decreasing what is produced.

And the effect on creditors. If 10 pay cuts avoid one job cut, you'll probably get less defaults and bankruptcies with the 10 pay cuts.
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