Rather, workers just forced up nominal wages to match inflation. Since the '70's, the same sort of condition has become widespread throughout most of Europe. While U.S. unemployment rate has ups and downs, European unemployment rises, then plateaus, then rises again - with only one brief recovery. Earlier argument about the U-shaped corporativism curve weakened by drastic rise of Scandinavian unemployment from 1990.
Unemployment is permanently high, as in the Great Depression.
Supply shocks don't seem important, so the labor market seems to be the right place to look. Like France after 1936, expansionary policy seems impotent to solve the problem. The natural theoretical framework to turn to understand this is thus not nominal rigidities, but real rigidities . In one sense, all involuntary unemployment is the same, since it could be eliminated if real wages were lower. But there is an important difference between real wages that can be easily reduced by purely nominal means, and excessive real wages that are independent of nominal factors.