6. Sumner and Caplan on wage stickiness. On the same topic, here is another perspective. Clearly wages are to some extent sticky in nominal terms. But if people who work on commission and tips are out of work in large numbers, or if truly flex-wage workers are being laid off, why see wage stickiness as the #1 culprit? (Scott isn't following through the logical implications of his cyclicality point.) In economies with truly flexible wages, people are forced to retreat into household production in down times and that is perhaps a better parable for America today. No one will hire them, flexibility or not. Plus if workers are irrational by focusing on the nominal rather than the real values, it's easy enough to trick them by cutting real benefits and working conditions, thereby saving the employer money. Real wage flexibility should be enough to keep them at work, yet it isn't.