WAGE CHANGES AND INTRAFIRM JOB MOBILITY OVER THE BUSINESS-CYCLE - 2 CASE-STUDIES

Despite the many reasons to expect sluggish wage adjustment, recent ev idence suggests that real wages are quite procyclical (growing more ra pidly during economic expansions than during recessions) and that this wage procyclicality pertains even to workers who stay with the same e mployer. One possible explanation for these findings is the old hypoth esis that a portion of firms' cyclical adjustment of labor costs is ac hieved not by changing the wages paid in particular jobs, but by chang ing the quality of labor assigned to those jobs. The authors' analysis of interwar personnel data from the Ford Motor Company and the A.M. B yers Company supports that hypothesis. The authors recognize that case studies of only two firms cannot be definitive, but they conclude tha t cyclicality in workers' job assignments deserves further attention.