It really boggles the mind if you stop and think about it. The worst economic contraction in modern history, the United States, in particular, seeing millions upon millions thrown out of work in a relentless destruction of income potential. The ranks of the employed crashed by an unimaginable degree, various measures of unemployment citing an ultimate peak of perhaps 25% to 30% or even more of all available workers.
And yet, while the number of payrolls were being decimated, the estimated real wage skyrocketed. Yes, you read that correctly; the more millions left for the charity of soup-lines before starvation, the higher the real wage rate had climbed. This head-scratching result even has a fancy name: SRIRL, or short-run increasing returns to labor.
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