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If, however, some rigidity prevented wages from falling to the point where supply and demand for labor were at equilibrium, then unemployment could persist. Such an obstacle could be, for example, trade union action to maintain minimum wages or minimum-wage legislation. Keynes's major innovation was to argue that persistent unemployment might be caused by a deficiency in demand for production or services, rather than by a disequilibrium in the labor market...
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Such an obstacle could be, for example, trade union action to maintain minimum wages or minimum-wage legislation. Keynes's major innovation was to argue that persistent unemployment might be caused by a deficiency in demand for production or services, rather than by a disequilibrium in the labor market...
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