“Involuntary Unemployment” — or in a more honest, truthful term: (THE INDIVIDUAL DECISION NOT TO BE EXPLOITED BY LOW WAGES):

(POVERTY) occurs when a person is willing to work at a (RESPECTABLE) wage yet (CANNOT FIND A JOB THAT PAYS RESPECTABLY).

(THE DECISION NOT TO BE EXPLOITED) is distinguished from (THE SUBMISSION TO EXPLOITATION), where workers choose not to work because their (RESPECTABLE & DESIRED) wage is higher than the (EXPLOITATIVE) wage (OFFERED).

In an economy where workers make (DECISIONS NOT TO BE EXPLOITED) there is a surplus of (LOTS OF PEOPLE ACTUALLY WANTING A RESPECTABLY PAID JOB) (BUT INSTEAD ARE MET WITH) the current wage level. (hmm, ya think?)

(THE DECISION TO NOT BE EXPLOITED) cannot be represented with a basic supply and demand model at a competitive equilibrium: All workers on the labor supply curve above the (DISRESPECTABLE) wage would voluntarily choose not to work, and all those below the market wage would be (SUBMITTED TO BE EXPLOITED.)

Given the basic supply and demand model, (THE DECISION TO NOT BE EXPLOITED) workers lie somewhere off of the labor supply curve.

(WELL WHAT DO YOU KNOW)

[1] Economists have several theories explaining the reasoning behind

(THE WORKERS THAT DECIDE NOT TO BE EXPLOITED) including implicit contract theory, disequilibrium theory, staggered wage setting, and efficiency wages. (HOW ABOUT THE THEORY OF: PAYING THEM WHAT THEY F*CKIN’ DESERVE OR STAY A SOLE PROPRIETOR!)

In the Shapiro-Stiglitz model workers are paid at a level where they do not shirk. This prevents wages from dropping to market clearing levels. Full employment cannot be achieved because workers would slack off if they were not threatened with the possibility of unemployment. (THERE IS ZERO EVIDENCE TO THIS STATEMENT THAT WHEN PEOPLE ARE PAID RESPECTABLE AMOUNTS THAT THEY WOULD SLACK OFF)

The curve for the no-shirking condition labeled NSC goes to infinity at full employment.

Models based on implicit contract theory, like that of Azariadis (1975), are based on the hypothesis that labor contracts make it difficult for employers to cut wages. Employers often resort to layoffs rather than implement wage reductions. (RATHER THAN PAY RESPECTABLE WAGES: WELL ‘AINT THAT SOMETHING).

Azariadis showed that given risk-averse workers and risk-neutral employers, contracts with the possibility of layoff would be the optimal outcome.[2]

Efficiency wage models suggest that employers pay their workers (RESPECTABLE WAGES) in order to enhance their productivity.[1] (WOW you NEED TO MODEL THAT? WAIT DIDN’T THAT JUST CONTRADICT WHAT WAS SAID EARLIER? HUH..)

In efficiency wage models based on shirking, employers are worried that workers may shirk knowing that they can simply move to another job if they are caught. (CAUGHT, CAUGHT GETTING PAID RESPECTABLE WAGES?)

Employers make shirking costly by paying workers (RESPECTABLE WAGES).

This gives workers an incentive not to shirk.[1] (!) When all firms behave this way, an equilibrium is reached where there are (NON-EXPLOITED) workers (ARE NOW) willing to work at (JOBS THAT PAY RESPECTABLE F-ING WAGES).

For many economists, (THE DECISION TO DEMAND A RESPECTABLE WAGE) is a real-world phenomenon of central importance to economics.

Many economic theories have been motivated by the desire to understand and control (THE DECISION TO DEMAND A RESPECTABLE WAGE).

However, acceptance of the concept of (THE DECISION TO DEMAND A RESPECTABLE WAGE) isn’t universal among economists. Some do not accept it as a real or coherent aspect of economic theory.

Shapiro and Stiglitz, developers of an influential shirking model, stated “To us, (THE DECISION TO DEMAND A RESPECTABLE WAGE) is a real and important phenomenon with grave social consequences that needs to be explained and understood.”[8] (HAHA! WOW!)

Mancur Olson argued that real world events like the Great Depression could not be understood without the concept of (THE CHOICE TO DEMAND A RESPECTABLE WAGE).

He argued against economists who denied (THE DECISION TO DEMAND A RESPECTABLE WAGE) and put their theories ahead of “common sense and the observations and experiences of literally hundreds of millions of people… that there is also (THE DECISION TO DEMAND A RESPECTABLE WAGE) and that it is by no means an isolated or rare phenomenon”.[9] (WTF? This is a bogus wikipedia sentence).

Other economists do not believe that true (THE DECISION TO DEMAND A RESPECTABLE WAGE) exists[10] or question its relevance to economic theory.

Robert Lucas claims “…there is an (DECISION OF THE INDIVIDUAL) element in all (PEOPLE WHO REFUSE WORK AT LOW PAY) in the sense that no one chooses bad luck over good; there is also a voluntary element in all (LOW PAYING WORK), in the sense that, however miserable one’s current work options, one can always choose to accept them” (SUBMITTING TO EXPLOITATION) [11] and “the unemployed worker at any time can always find (AN EXPLOITATIVE JOB) at once”.[11] Lucas dismissed the need for theorists to explain (THE DECISION TO DEMAND A RESPECTABLE WAGE) since it is “not a fact or a phenomenon which it is the task of theorists to explain. It is, on the contrary, a theoretical construct which Keynes introduced in the hope it would be helpful in discovering a correct explanation for a genuine phenomenon: large-scale ﬂuctuations in measured, total unemployment.”[12] Along those lines real business cycle and other models from Lucas’s new classical school explain fluctuations in employment by shifts in labor supply driven by changes in workers’ productivity and preferences for leisure.[1]

(THE DECISION TO DEMAND A RESPECTABLE WAGE) is also conceptually problematic with search and matching theories of unemployment.

In these models, (REFUSING TO BE EXPLOITED) is (A DECISION MADE) in the sense that a worker might choose to endure (POVERTY) during a long search for a higher paying (MORE RESPECTABLY PAID) job than those immediately (EXPLOITATIVE ONES) available; however, there is a (DECISION MADE BY THE INDIVIDUAL) element in the sense that a worker does not have control of the economic circumstances that force them to look for new work in the first place.[13]