For this purpose, a separate question in the 2009 survey asked firms about the occurrence and coverage among employees of base wage cuts and freezes since the crisis began.
Firms elsewhere reduced wages through a combination of base wage freezes and cuts in flexible pay components: overall, slightly more than 30% of employees experienced wage freezes in summer 2009, whereas wage freezes had affected, on average, less than 5% of employees in the five years from 2003 through 2007.
It is interesting to compare the responses with those provided to the analogous question in the 2007 survey, which concerned the frequency of base wage cuts and freezes during the previous five years, hence a period of sustained growth (Table 10).
More importantly: Intelligent people must debate whether it's fair that millions in CEO stock options can be subject to a tax rate of 15percentt for long-term capital gains, while middle-class families can pay 25percentt on base wages of just $50,000 a year.
Mr. Summers accepted the recommendations of a commission that called for base wages of $10.83 to $11.30 an hour.
For instance, they believe that Israel could radically reduce its use of Palestinian laborers in agriculture and construction, with a side benefit of higher base wages and lower unemployment for unskilled Israeli workers.
To some extent, the lack of flexibility in base wages might be offset by adjusting nonbase wage components, although the same forces that impose rigidity in the former might also limit changes in bonuses and fringe benefits.
Among the channels of labour cost reduction, almost none of the firms chose base wages as the "most important" option (only 1.2% overall, ranging from 0% in the Czech Republic to 14% in Estonia).
Today, 34 states, Washington D.C., and Puerto Rico, as well as dozens of cities, have introduced or passed legislation on minimum wage issues, including increasing the state minimum wage, automatic cost-of-living increases and addressing base wages for tipped employees.
