Mostly. But there are some other factors, too. Wages tended to be sticky on the way down.
There's an interesting book full of interviews on the subject: ``Why Wages Don't Fall During a Recession'' by Truman F. Bewley. It used to be that managers rather fired a some employees instead of letting them work for less money.
There's an interesting book full of interviews on the subject: ``Why Wages Don't Fall During a Recession'' by Truman F. Bewley. It used to be that managers rather fired a some employees instead of letting them work for less money.
See http://cowles.econ.yale.edu/news/bewley/tfb_00-02_wages.htm for a copy of the book's review in the Economist.
Lately we have seen wages fall, so that this rigidity might be on the way out.