I am reading a book called "Austerity, the history of a dangerous idea" written by Mark Blyth. While talking about Keynes, the author writes:
"he [Keynes] showed that although any worker can accept a wage cut to price himself into employment, if all workers did this, it would in the aggregate lower consumption and prices, and thus increase real wage (the wage-minus-price effect), leaving the worker who "adjusted" poorer and just as unemployed"
I don't understand real wage/price effect. If prices drop with wages, how is the employee becoming poorer? If I make less but it costs less, shouldn't I be able to buy the same amount?
Thank you for your input!