Imagine a recession on Planet Vulcan. Thanks to weak demand, an able and hard-working Vulcan subordinate is simply not doing enough business to justify his salary.

The Vulcan boss calls his subordinate into the corner office for a frank and logical discussion of the options. They agree that it would be illogical to continue under the present arrangements, and that the Vulcan employee will accept a pay cut of 20 per cent for the time being. Both congratulate themselves on avoiding the bizarre human practice of sacking marginally profitable workers rather than adjusting their salaries.

Back on Earth, people do get sacked in recessions, and the received wisdom is that this is because wages don't adjust. Some economists talk about “voluntary unemployment”. This odd term calls to mind the scenario of the Vulcan deciding he would prefer to spend some time on the beach rather than take the pay cut. Other economists speak of “wage rigidity”. Whatever we call it, inflexible wages are a puzzle, as the Vulcan approach does seem to have logic on its side.