Although we work through financial markets, our goal is to help Main Street, not Wall Street.
Janet YellenRead
Firms don't just try to pay as little as possible to get the needed bodies on board; when there is unemployment, they ask themselves how wage cuts would affect the behavior of the employees. Would they quit or feel dissatisfied and work less hard on the firm's behalf if they feel that wage policies are unfair?
Interpretation
What this quote means
Companies consider the impact of wage cuts on employee morale and productivity, rather than solely focusing on cost reduction.
In this quote, Janet Yellen highlights the importance of understanding employee behavior in relation to wage policies. While firms may aim to minimize costs by implementing wage cuts, they must also consider the potential negative consequences such actions could have on employee satisfaction and productivity, as disgruntled workers may become less motivated or even leave the company altogether.
Themes
WagesEmployee BehaviorMoraleProductivityBusinessManagement
In practice
Example use cases
In a business seminar discussing the importance of fair wages.
More from Janet Yellen
All quotes →We need to keep in mind the well-established fact that the full effects of monetary policy are felt only after long lags. This means that policy makers cannot wait until they have achieved their objectives to begin adjusting policy.
Janet YellenRead
A clear lesson of history is that a 'sine qua non' for sustained economic recovery following a financial crisis is a thoroughgoing repair of the financial system.
Janet YellenRead
Transparency concerning the Federal Reserve's conduct of monetary policy is desirable because better public understanding enhances the effectiveness of policy. More important, however, is that transparent communications reflect the Federal Reserve's commitment to accountability within our democratic system of government.
Janet YellenRead
For decades, the pace of technological change in manufacturing has outstripped that in the economy as a whole. And, so, firms - manufacturing firms - have found it easier to continue producing by - with - reducing their workforces.
Janet YellenRead
Inequality has risen to the point that it seems to me worthwhile for the U.S. to seriously consider taking the risk of making our economy more rewarding for more of the people.
Janet YellenRead
Similar quotes
Without calculation, economic activity is impossible. Since under Socialism economic calculation is impossible, under Socialism there can be no economic activity in our sense of the word All economic change, therefore, would involve operations the value of which could neither be predicted beforehand nor ascertained after they had taken place. Everything would be a leap in the dark. Socialism is the renunciation of rational economy.
Ludwig Von MisesRead
It's important that we invest in America - literally. The terrorists wanted to destroy our economy, and we can't let our system fall apart. We also have to invest in one another.
Madeleine AlbrightRead
Economists specialize in pointing out unpleasant trade-offs - a skill that is on full display in the health care debate. We want patients to receive the best care available. We also want consumers to pay less. And we don't want to bankrupt the government or private insurers. Something must give.
Sendhil MullainathanRead
One of the most powerful insights in economics is this idea of a division of labor. You do the thing you're good at. Other people do something else that they're good at. The net effect is better for everybody.
Paul RomerRead
When you save the life of anyone, a farmer, a teacher, a mother, they are contributing productively into the economy.
Ngozi Okonjo-IwealaRead
Markets are designed to allow individuals to look after their private needs and to pursue profit. It's really a great invention, and I wouldn't underestimate the value of that. But they're not designed to take care of social needs.
George SorosRead