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Wages in the Steel Industry: Take the Money and Run?
Author(s) -
Deily Mary E.
Publication year - 1998
Publication title -
industrial relations: a journal of economy and society
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.61
H-Index - 57
eISSN - 1468-232X
pISSN - 0019-8676
DOI - 10.1111/0019-8676.00080
Subject(s) - economics , inflation (cosmology) , wage growth , wage , investment (military) , labour economics , outcome (game theory) , monetary economics , microeconomics , physics , politics , theoretical physics , political science , law
Sharp increases occurred in the wages paid by integrated steel firms in the 1970s despite reductions in employment caused by the industry's decline. This article reviews several explanations suggested for this puzzling outcome and evaluates them using information on the size and timing of wage increases, on investment decisions, and on expectations about future inflation and demand growth. Overly optimistic expectations for demand growth and unexpected inflation appear to explain much of the data.