Hostname: page-component-78c5997874-ndw9j Total loading time: 0 Render date: 2024-11-03T08:31:06.379Z Has data issue: false hasContentIssue false
  • English
  • Français

Hoover's Truce: Wage Rigidity in the Onset of the Great Depression

Published online by Cambridge University Press:  01 December 2010

Jonathan D. Rose
Jonathan D. Rose*
Affiliation:
Economist, Federal Reserve Board of Governors, 20th and C Streets NW, Washington, DC 20551. E-mail: [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

This article analyzes President Herbert Hoover's role in causing wage rigidity during the onset of the Great Depression, through two conferences in which he encouraged business leaders to maintain high wages. New data on the set of firms and trade associations attending these conferences provides evidence that Hoover's conferences delayed the cuts in hourly wages at a small number of large firms, although this result may have been due to characteristics of the particular industries the firms represented. In a cross-section of industries, there is no evidence that industry representation at the December conference affected the timing of wage cuts.

Type
ARTICLES
Information
The Journal of Economic History , Volume 70 , Issue 4 , December 2010 , pp. 843 - 870
Copyright
Copyright © The Economic History Association 2010

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Beney, M. Ada. Wages, Hours, and Employment in the United States. National Industrial Conference Board Study 229. New York: National Industrial Conference Board, 1936.Google Scholar
Bernanke, Ben S.“Employment, Hours, and Earnings in the Depression: An Analysis of Eight Manufacturing Industries.” American Economic Review 76, no. 1 (1986): 82–107.Google Scholar
Bernanke, Ben S. and Carey, Kevin. “Nominal Wage Stickiness and Aggregate Supply in the Great Depression.” Quarterly Journal of Economics 111, no. 3 (1996): 853–83.CrossRefGoogle Scholar
Bernanke, Ben S. and Parkinson, Martin L.. “Procyclical Labor Productivity and Competing Theories of the Business Cycle: Some Evidence from Interwar U.S. Manufacturing Industries.” The Journal of Political Economy 99, no. 3 (1991): 439–59.CrossRefGoogle Scholar
Bernstein, Irving. The Lean Years. Boston: Houghton Mifflin Company, 1960.Google Scholar
Bordo, Michael D., Erceg, Christopher J., and Evans, Charles L.. “Money, Sticky Wages, and the Great Depression.” American Economic Review 90, no. 5 (2000): 1447–63.CrossRefGoogle Scholar
Bureau of Labor Statistics. Monthly Labor Review, April 1929—March 1934.Google Scholar
Calomiris, Charles W. and Hanes, Christopher. “Historical Macroeconomics and American Macroeconomic History.” NBER Working Paper No. 4935, Cambridge, MA, November 1994.CrossRefGoogle Scholar
Chandler, Alfred Dupont. Scale and Scope. Cambridge, MA: Belknap Press, 1990.CrossRefGoogle Scholar
Chicago Daily Tribune, 19 November 1929.Google Scholar
Cole, Harold L. and Ohanian, Lee O., “Reexamining the Contribution of Money and Banking Shocks to the U.S. Great Depression.” NBER Macroeconomics Annual 15 (2000): 183–227.CrossRefGoogle Scholar
Commercial and Financial Chronicle, various dates.Google Scholar
Dighe, R.“Wage Rigidity in the Great Depression: Truth? Consequences?” Research in Economic History 17 (1997): 85–134.Google Scholar
Dunlop, John T.Wage Determination Under Trade Unions. New York: The Macmillan Company, 1944.Google Scholar
Eichengreen, Barry, and Sachs, Jeffrey. “Exchange Rates and Economic Recovery in the 1930s.” The Journal of Economic History 45, no. 4 (1985): 925–46.CrossRefGoogle Scholar
Fausold, Martin L.The Presidency of Herbert C. Hoover. Lawrence: University Press of Kansas, 1985.Google Scholar
Foster, William, and Catchings, Waddil. Business Without a Buyer. Boston: Houghton Mifflin, 1928.Google Scholar
Hanes, Christopher. “Nominal Wage Rigidity and Industry Characteristics in the Downturns of 1893, 1929, 1981.” American Economic Review 90, no. 5 (2000): 1432–46.CrossRefGoogle Scholar
Hoover, Herbert. The Memoirs of Herbert Hoover. New York: The Macmillan Company, 1952.Google Scholar
Jacoby, Sanford M., Employing Bureaucracy: Managers, Unions, and the Transformation of Work in American Industry, 1900—1945. New York: Columbia University Press, 1985.Google Scholar
Lebergott, Stanley. “‘Wage Rigidity’ in the Depression: Concept or Phrase?” Unpublished Manuscript, Wesleyan University, 1989.Google Scholar
Literary Digest, 30 May 1931.Google Scholar
Los Angeles Times, 7 December 1929.Google Scholar
Lucas, Robert E. Jr., and Rapping, Leonard A.. “Real Wages, Employment, and Inflation.” The Journal of Political Economy 77, no. 5 (1969): 721–54.CrossRefGoogle Scholar
Lyons, Eugene. The Herbert Hoover Story. Washington: Human Events, 1959.Google Scholar
Margo, Robert A.“The Microeconomics of Depression Unemployment.” The Journal of Economic History 51, no. 2 (1991): 333–41.CrossRefGoogle Scholar
Margo, Robert A.“Employment and Unemployment in the 1930s.” The Journal of Economic Perspectives 7, no. 2 (1993): 41–59.CrossRefGoogle Scholar
Metcalf, Evan B.“Secretary Hoover and the Emergence of Macroeconomic Management.” The Business History Review 49, no. 1 (1975): 60–80.CrossRefGoogle Scholar
Mitchell, Daniel J.B.“Wage Flexibility: Then and Now.” Industrial Relations 24, no. 2 (1985): 266–79.CrossRefGoogle Scholar
Myers, William Starr and Newton, Walter H.. The Hoover Administration: A Documented Narrative. New York: Charles Scribner's Sons, 1936.Google Scholar
National Business Survey Conference. Business Conditions and Outlook. Washington, DC: Chamber of Commerce of the United States, 1929.Google Scholar
National Industrial Conference Board. Salary and Wage Policy in the Depression. Washington, DC: National Industrial Conference Board, 1932.Google Scholar
National Resources Committee. The Structure of the American Economy. Washington, DC: GPO, June 1939.Google Scholar
New York Times, various dates.Google Scholar
O'Brien, Anthony P.“A Behavioral Explanation for Nominal Wage Rigidity During the Great Depression.” Quarterly Journal of Economics 104, no. 4 (1989): 719–35.CrossRefGoogle Scholar
Ohanian, Lee O.“What or Who Started the Great Depression?” Unpublished Manuscript, University of California, Los Angeles, 2008.Google Scholar
Olenin, Alice, and Talbert, Lewis E.. Bulletin of the United States Bureau of Labor Statistics #610: Revised Indexes of Factory Employment and Pay Rolls 1919 to 1933. Washington, DC: GPO, 1935.Google Scholar
Romasco, Albert U.The Poverty of Abundance. Oxford: Oxford University Press, 1965.Google Scholar
Rothbard, Murray N. America's Great Depression. Princeton: Sheed and Ward, 1963.Google Scholar
Schatz, Ronald W.The Electrical Workers. Urbana: University of Illinois Press, 1983.Google Scholar
Selgin, George, and Taylor, Jason. “By Our Bootstraps: Origins and Effects of the High-Wage Doctrine and the Minimum Wage.” Journal of Labor Research 20, no. 4 (1999): 447–62.Google Scholar
Shister, Joseph. “A Note on Cyclical Wage Rigidity.” American Economic Review 34, no. 1 (1944): 111–16.Google Scholar
Stone, R. W.“Wage Policies in Depression.” The Journal of Business of the University of Chicago 5, no. 1 (1932): 19–27.CrossRefGoogle Scholar
The Nation, 5 November 1930.Google Scholar
Time, 13 April 1931.Google Scholar
United States Department of Commerce. Commercial and Industrial Organizations of the United States. Washington, DC: GPO, 1929 and 1931.Google Scholar
United States Department of Commerce. Trade and Professional Associations of the United States. Washington: GPO, 1942.Google Scholar