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The difference between recession and depression is simple. Recession, goes the saying, is when you lose your job; depression is when I lose mine.
These days recession is starting to feel like depression to a lot of people. Recession starts to feel like depression every night at General Motors Corp. when they turn off the escalators and turn down the lights in the faint hope that one more person will get to keep his wage and benefits one more day.
Ron Gettelfinger, head of the United Auto Workers union, knows that worker packages, which cost carmakers $74 an hour in wages and benefits, are way out of line with deflationary reality. But most of Gettelfinger's proposals aren't about slashing those packages. Instead, Gettelfinger is emphasizing plans for federal assistance to manufacturers, or federal cash to improve terms of auto loans.
These latter approaches aim to fortify the overall economy. In a recovered economy, the logic runs, worker pay won't seem so egregious. Behind Gettelfinger stand economists who argue that bringing down wages isn't right or possible, even in a troubled period. Wages, economists says, may move up, but they are "sticky downward."
These economists cite the U.K.'s John Maynard Keynes. They also often cite one of the parents of modern economics, Irving Fisher of Yale. Around World War I, Fisher wrote up a then-novel plan: index wages to the growth of the economy so that raises are automatic.
