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Stickiness of wages


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A banker friend of mine who does loans and opens accounts works part time at a hospital parking lot. It turns out that he gets paid more per hour working as a parking lot attendant than as a full time bank employee.

 

It never ceases to  amaze me that a job paid for by the government is paid twice as much as a similar private sector job would be paid.  Doubly amazing is that it is the private sector that pays the government employees wages at the end of the day.

 

http://www.bloomberg.com/news/2010-09-07/your-fat-paycheck-keeps-your-neighbor-unemployed-kevin-hassett.html

 

Deflation is necessary in some sectors. But unions are so strong in many cases that they won't let it happen.  Case in point Toronto's triannual garbage strikes.  High wages for unskilled jobs are a burden on all.  And we must watch as declining services are met with higher prices steering our dollars away from other areas of the economy.

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