Question

Does it make sense that wages would be sticky downwards but not upwards? Why or why not?

Short answer

Yes. It does make sense that wages are sticky downwards but not upwards

Step-by-step solution

Concept introduction

Sticky down alludes to the propensity of the cost of a decent to climb effectively, even though it will not effectively dropdown

Explanation with Graphical Representation

Sticky wage theory clarifies that representative compensation is insusceptible to decline under falling apart financial circumstances Because wages will generally be "sticky-down", genuine wages are rather disintegrated through the impacts of expansion.

Final Answer

The lowest pay permitted by law regulations make the wages downwardly sticky. They might be made to be upwardly sticky assuming insufficient rivalry in low-talented work markets urges businesses to quit expecting about their rising wages that would thusly decrease their benefits. Therefore, It does make sense that wages are sticky downwards but not upwards