Steve is doing some jobs, but it could not be said that he has a job in the traditional sense:
During the previous month, he had taken to picking up cans and scrap metal along the road. It made him feel like a bum, he said, but he had managed to fill seven bags with aluminum cans and other recyclables. Now he loaded them into a friend’s pickup truck and drove a few miles south, toward Myrtle Beach. They pulled up to a warehouse where the owner purchased scrap metal. Murdock grabbed his bags and set them onto an industrial scale, stale beer spilling onto his hands and his jeans.
“Twenty-seven pounds at 35 cents per pound,” an employee said. He punched the numbers into a calculator, rounded up and handed Murdock $9.50.
It is difficult for me to see how Murdock’s predicament — is it a typical one? — is well-described by the theory of nominal wage rigidity. I don’t mean to bait Scott Sumner, but I will again mention the difference between “nominal aggregate demand” and “real aggregate demand.” If society were much more prosperous and people had higher real wealth-backed demands to buy a lot more products, Murdock probably could get a traditional job of the kind he is seeking. In this sense you can attribute Murdock’s joblessness to a shortfall in aggregate demand. That said, it is not clear why juicing up nominal variables should do very much for him. His wage and workplace condition demands are already quite flexible, as he is willing to settle for what he can get. Is money illusion his problem? It seems there is no need to trick him, using monetary policy, into a lower real wage.
The article is here.
Addendum: Scott Sumner responds. In my view if it is a job worth creating, the private sector will expand V, or credit, endogenously, so while I believe we are on an excessively low NGDP path I do not blame that for the fate of Steve Murdock.