- 季刊経済理論 (ISSN:18825184)
- vol.50, no.1, pp.55-67, 2013-04-20 (Released:2017-04-25)
This paper proposes a set of two theories of wages induced from recent Japanese and American data. The first theory is that the demand and supply of labor will determine money wages, instead of real wages. To explain this money wage determination, this paper uses not only a labor demand curve of a representative firm, but also a labor supply curve of a representative household. The former is, not so differently from usual, reasoned from its profit maximization behavior: a firm will determine quantity of demand for labor so as to equalize the value of marginal product with the wage rate plus unit material cost. The latter is, as the worker's indifference preference between his real wage and leisure doesn't hold, deducted from the household's income earning behavior: a household will increase and determine the quantity of supply of employed labor so that its earned income would cover its cost of living. It replaces its useful and necessary unpaid domestic labor with external paid labor in order to earn money wages, which in turn causes additional living expenses as the domestic labor decreases. The supply curve of labor will be usually J-shaped while the demand curve is down-sloped. In the labor market, the equalization of demand for and supply of labor often involves 'the imperfect employment equilibrium', the equilibrium with involuntary unemployment. The second theory is that real wages are determined by three real-term factors: the labor productivity of consumers' goods industry, the household average propensity to consume, and the proportion of number of employees between producers' and consumers' goods industries. This proportion will vary mainly according to the rate of fixed capital investment. Therefore real wages will depend upon both of the two market equilibrium, those of labor market and consumers' goods. In order to demonstrate validity of these theories, besides briefly analyzing the recent Japanese labor market-its persistent trends of money wage decrease and high rate of unemployment, this paper applies the money wage theories to clarifying causes of wages differences among workers of different industries, among workers' various jobs and between male and female workers. Further it is shown that the real wage theory make it possible to explain endogenously the real wages level the existing doctrines of 'exploitation' presuppose as given. The positivist position adopted methodologically in this paper does not mean mere 'falsificationism' but 'verificationism', or rather 'confirmationism', of a theory.