Also prominent in the depression of 1920–21 was a concern about being paid
a “fair wage.” Anger against so-called profiteers was sometimes fueled by some
companies cutting their employees’ wages. These companies defended their
actions by noting that they could not continue to pay higher wages when the
market prices for their final goods were falling. Any rational person should have
seen that wage cuts were sometimes necessary, but an explanation of employers’
need to cut wages was not a contagious narrative. Labor union representatives
did not have any incentive to explain the employers’ predicament to their
members. Rather, they found it in their interests to keep alive a story about evil
management.
A plot of uses of the term fair wage follows a pattern remarkably similar to
that of profiteer. However, the growth of fair wage was steeper and more
gradual, starting in the late nineteenth century. In books, the peak usage of fair
wage was around the time of the 1920–21 depression. In ProQuest News &
Newspapers, the peak mention occurred in the Great Depression of the 1930s.
The fair wage-effort hypothesis, as presented by George A. Akerlof and Janet
L. Yellen (1990), asserts that workers are inclined to slow down their work in
revenge if they feel that they are not being paid a fair wage. Akerlof and Yellen
presented their theory as if it applies equally at all times, but it appears that
attention to fair wages can be heightened by changing narratives.

Narratives That Suddenly Ended the Sharp 1920–21 Recession
The abrupt end of the 1920–21 depression and attenuation of public concerns
about profiteering do not seem to have any obvious explanation. Presumably
there were new popular narratives poorly observable today that induced less
expectations of falling prices and less anger about high prices.
There was a good harvest in the summer and fall of 1920, and while that may
not be a reliable leading indicator, it was taken by many as such:
We raised enormous crops this year and there is a definite relation between
big crops and good times. The war didn’t repeal natural laws.19
In late 1920 Sir Edmond Walker, a prominent Canadian banker, offered the
theory why prices would not fall to 1913 levels:
This condition [of consumer prices well above prewar levels] may last for
another generation, and must last so long as the weight of war indebtedness
causes unusually heavy taxes and high rents.20
By April 1921 there were claims that there was “less profiteering going on, as
prices settle slowly to peace levels.”21 Many farmers were reportedly already
back down to receiving 1913-level prices for much of their produce by 1921.22
So by that time there seemed to be less reason to postpone purchases until
prices were lower. Also, business—and wealth—were no longer so evil, so there
was no more impulse to boycott. People were becoming more comfortable with
spending. Women were said to be wearing more conspicuous jewelry by 1921.23
Children were bringing money to school rather than lunch bags, and they bought
expensive lunches for themselves. A “pass it along spirit” was developing by late
1921:
Everyone is taking more comfort—finding more enjoyment in life—than ever
before. For proof of this see the roads filled with automobiles. All that means
the expenditure of money.24
The sharp recovery in 1921 might be attributed to these new narratives, rather to
any active government stimulus to revive the economy.

Contrasting the Depression of 1920–1921 with the Great
Depression of the 1930s
Labor historians have found that labor was more acquiescent to wage cuts
justified by falling prices in the 1920–21 depression than in the later Great
Depression of the 1930s.25 Labor unions were fewer and weaker in the former
episode, and thus union propaganda was less viral. Therefore employers had
better success in 1920–21 with arguing that they must cut wages because of
deflation; they noted that the lower prices they could charge for their products
left them with less revenue to pay wages. In The Forgotten Depression (2014),
James Grant attributes the relatively rapid end of the 1920–21 depression to such
wage flexibility.
In contrast, narratives in the 1930s described employers’ justification for
cutting wages as purely the result of greed and lies. Clergymen were criticized
for becoming politicized against business:
Some of the clergymen who think they were ordained with a special power to
preach economics instead of religion go into wages and work wholly on
emotion. They passionately urge minimum rates and hours on such broad and
fine humanitarian grounds that those who oppose regulation on equally fine
and broad humanitarian grounds find themselves classed with the sweat-shop
employers as enemies of human progress.26
Such talk surely made it hard for employers to cut wages to avoid layoffs and
to maintain goodwill with the public. In addition, as noted in chapter 13, the
National Industrial Recovery Act of June 1933 regulated against wage cuts, and
President Franklin Roosevelt’s policy, even after the Supreme Court declared the
act unconstitutional in May 1935, only made it more difficult for firms to cut
wages.27 These regulations reflected narratives of the Great Depression years that
wage cuts were truly evil. Even without such regulations, firms would have
found it difficult to cut wages in response to lower prices.
The “return to normalcy” narrative was not so prominent in the Great
Depression of the 1930s, and not so easily disposed of with the passage of time.
The perception in the depression of 1920–21 that the depression was a
transitional phase back to normalcy after a war and an influenza epidemic was a
fundamental framing difference when compared to the Great Depression. The