Topic: Bargaining power and unemployment, wage curve, and alternatives
There's been a pretty solid amount of research suggesting unemployment does, in fact, affect (effect?) wages. Like, in 40 different countries they've found pretty solid evidence for it. Somehow, this meta analysis is downplaying the role of it, however: http://onlinelibrary.wiley.com/doi/10.1 … 254.x/full
However, according to these guys, http://ftp.iza.org/dp1665.pdf
The meta analysis is basically overstating the importance of a -.07 vs -.01 wage curve elasticity and uses questionable arguments to this end. Basically, over 40 countries have found strong empirical evidence for a wage curve. The U.S. has been pretty contentious and macro-economists have not been interested in this area of study for whatever reason, according to this paper. It claims American macroeconomists have been working with the Phillips curve which is not the best fit for this kind of study, as using microecnomic data produces a better, more robust fit. The original Phillips curve publication only provides simple functional curves and as such simple functions are generally used. (And are lacking, apparently, because it's not dynamic).
The conclusion of this paper is essentially that based on studying states, the U.S. does indeed have a wage curve and it is consistent with other countries. We aren't special.
I'm partial to the wage curve, obviously.