Nominal Wage Rigidity in England in the Long Run

Source: Jan de Vries 2/13/08 lecture, originally from Phelps-Brown and Sheila Hopkins (1956), "Seven Centuries of the Prices of Consumables, Compared with Builders' Wage- Rates," Economica 23:92 (November), pp. 296-314 http://links.jstor.org/sici?sici=0013-0427%28195611%292%3A23%3A92%3C296%3ASCOTPO%3E2.0.CO%3B2-C

• Extraordinarily impressive nominal wage rigidity across long spans of history.
  • Beware, however: the "ancillary" terms of the wage contract could and did vary at a much higher frequency ("we can still only pay you three pence a day, but we'll add a piece of sausage and a mug of beer at lunchtime"--that sort of thing).
• Neverthless, aside from 1932, 1921, and 1333, nominal wages simply do not fall. It doesn't happen.

Comments

[micah]

What happened in 1333? Wikipedia isn't helping here...

[dug]

But it has been happening in Japan for some time -- not all of it due to shifts towards lower-paid part-time and contract workers.

[RKimble]

In modern African rural labor markets, non-cash compensation (kola nuts, tobacco, meals) is a significant share (certainly more than 25%) of total compensation of day laborers. It is an even higher share of total compensation of long-term laborers (eg, plantation workers who live on the farm for months or even years at a time) because it includes housing. How this affects the long-term wage trends depends on the stability of the prices of the components of non-cash compensation. Before the advent of modern market access (eg, roads) and modern technologies (eg, cocoa seedlings), those non-cash compensation prices would mostly have depended on land-labor ratios and hence I would expect that their share of total compensation to have been fairly stable (cant promise this would co-integrate perfectly, mind you, but it seems logical). This logic would apply, I suppose, to the European past. With cheaper market access and better technologies in rural Africa, relative prices of the non-cash compensation (especially any tradables) might have changed a lot compared to food prices and hence the non-cash compensation share would be less stable, say after WW2 when market access and technology began to change more rapidly. Very hard to say which effect market access and technology would have had on this aspect of non-cash compensation in historical European labor markets.