Henry George

“ Wages, which include all returns received from labour, vary not only with the differing powers of individuals but, as the organization of society becomes elaborate, they vary also largely as between occupations. Nevertheless, there is a certain general relation between all wages, so that we express a clear and well-understood idea when we say that wages are higher or lower in one time or place than in another. In their degrees, wages rise and fall in obedience to a common law. ”

“ When I say that wages fall as rent rises, I do not mean that the quantity of wealth obtained by labourers as wages is normally less, but that the proportion which it bears to the whole produce is necessarily less. ”

“ In fact, the accepted law of rent depends for its recognition upon a previous, though in many cases it seems to be an unconscious, acceptance of this law of wages. What makes it evident that land of a particular quality will yield as rent the surplus of its produce over that of the least productive land in use, is the apprehension of the fact that the owner of the higher quality of land can procure the labour to work his land by the payment of what that labour could produce if exerted upon land of the poorer quality. ”

“ On the verge of each occupation stand those to whom the inducements between one occupation and another are so nicely balanced that the slightest change is sufficient to determine their labour in one direction or another. Thus, any increase or decrease in the demand for labour of a certain kind cannot, except temporarily, raise wages in that occupation above, nor depress them below, the relative level of wages in other occupations, which is determined by the circumstances previously adverted to, such as relative agreeableness or continuity of employment, etc. ”

“ It is impossible to read the works of the economists who since the time of Smith have endeavoured to build up and elucidate the science of Political Economy without seeing how, over and over again, they stumble over the law of wages and never once recognize it. ”

“ But if, in the meantime, the advance of the arts or the economies that become possible with greater population have so increased the productive power of labour that at 20 the same exertion will produce as much wealth as before at 25, labourers will get as wages as great a quantity as before. The relative fall of wages will not be noticeable in any diminution of the necessaries or comforts of the labourer, but only in the increased value of land and the greater incomes and more lavish expenditure of the rent-receiving class. ”

“ Every colonist gets more land than he can possibly cultivate. He has no rent, and scarce any taxes to pay.... He is eager, therefore, to collect labourers from all quarters, and to reward them with most liberal wages. But those liberal wages, joined to the plenty and cheapness of land, soon make those labourers leave him in order to become landlords themselves, and to reward, with equal liberality, other labourers, who soon leave them for the same reason that they left their first master. ”

“ Demand for and supply of labour It is perfectly correct to say that the wages in different occupations will vary relatively according to differences in the supply and demand of labour - meaning by demand the call that the community as a whole makes for services of the particular kind, and by supply the relative amount of labour that can, under the existing conditions, be determined to the performance of those particular services. ”

“ What conceals the absurdity of speaking generally of supply and demand in reference to labour is the habit of considering the demand for labour as springing from capital and as something distinct from labour ”

“ Labour will no longer yield equal returns to equal exertions, but those who expend their labour on the superior land will obtain a greater produce for the same exertion than those who cultivate the inferior land. Wages, however, will still be equal, for this excess which the cultivators of the superior land receive is in reality rent ”

“ As at one time a philosopher of repute may earn by his lectures many-fold the wages of the best mechanic, and at another time can hardly hope for the pay of a footman; so there are occupations which in a great city may yield relatively high wages but which in a new settlement would yield relatively low wages. ”

“ Wages in various occupations If we turn from simple social states to the complex phenomena of highly civilized societies, we shall find upon examination that they also fall under this law.
In such societies wages differ widely but they still bear a more or less definite and obvious relation to each other. ”

“ If the margin of cultivation descends from the productive point which we will call 25 to the productive point we will call 20, the rent of all lands that before paid rent will increase by this difference, and the proportion of the whole produce that goes to labourers as wages will to the same extent diminish. ”

“ Even where artificial barriers, such as limiting laws, guild regulations, the establishment of caste, etc., are imposed on this interaction, experience shows that they may interfere with, but cannot prevent, the maintenance of this equilibrium. They operate like dams that pile up the water of a stream above its natural level but cannot prevent its overflow. ”

“ Thus although the employer wishes to pay as little as possible, and the employee to receive as much as possible, wages will be fixed by the value of such labor to the laborers themselves. If wages are temporarily carried either above or below this line, a tendency to carry them back at once arises. ”

“ Under this principle, what, in conditions of freedom, will be the terms on which one man can hire others to work for him? Evidently, they will be fixed by what those others could make if labouring for themselves. ”

“ For although barriers of greater or less difficulty may exist, the amount of labour that can be determined to any particular pursuit is nowhere absolutely fixed. All mechanics could act as labourers, and many labourers could readily become mechanics ”

“ The principle which will prevent him from having to give anything above that, except what is necessary to induce the change, will also prevent them from taking less. Did they demand more, the competition of others would prevent them from getting employment. ”