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this is A Very Bad Idea, because the problem is not with competitiveness, it is with a lack of demand, which is not solved by wage cuts - quite the contrary, they make things worse
If wage cuts still result in a larger aggregate income for the workers than unemployment subsidies, then the wage cuts are a stop-gap measure.

Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
by Migeru (migeru at eurotrib dot com) on Tue Mar 3rd, 2009 at 04:51:30 AM EST
[ Parent ]
Assuming that they are in an A-kasse, and assuming that they are mostly unskilled labour, it will not result in a noticeably larger income than unemployment subsidies.

Skilled labour is another story.

Still, it's nothing that higher unemployment subsidies cannot solve.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Mar 3rd, 2009 at 05:05:41 AM EST
[ Parent ]


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