Wage increase

“ The case of the living wage policy rests upon the opinion that the introduction of living wage standards will give rise to a series of adjustments in production and distribution. And that the net sum of the results of these adjustments, perhaps only after a temporary period of dislocation in some instances, will be to increase the wages of the lowest grades of wage earners—without doing 192 equivalent harm in any other direction. ”

“ On the other hand, the introduction of factories or mining industries has sometimes affected directly the wages of farm hands through a large region by lessening competition.
Upward tendency of wages.—It is certain that the general tendency of wages in all employments is upward rather than downward, in spite of serious disturbances from financial depression often repeated. The gradual increase of welfare among wage-earners is greater even than the increase in money wages. ”

“ Industries in which the wage earners are highly organized generally find it more difficult to economize by way of wage reduction than industries in which the wage earners are not organized.
The range of profits of industry during periods of falling prices will depend upon the nature of the causes which produce the decline. If it is simply the result of an increase in industrial efficiency, or progress in the industrial arts, profits will continue to be satisfactory and may even be on the increase. ”

“ In certain instances, especially when the combination has first been made, wages have been increased. The Trust and Wages. On the whole, however, it is probable that as yet the wage-earners have succeeded in getting an increase of wages in circumstances substantially similar to those under which their wages would be increased by single corporations. An increase of wages comes only through pressure on their part. Under a prosperous condition of industry it is possible, without materially lowering profits, to increase the wages. ”

“ If this basis were to be used in adjusting the wages of all other groups of workers it is evident that during periods of changing prices there would be a different set of wage differentials for every position of the price level. And, furthermore, during periods of rising prices, the lowest paid classes of workers—those who could do least to meet the rise in the cost of living by changing their consumption habits—would receive the smallest wage increases. ”

“ In general, however, we must continue to rely on our sound system of collective bargaining to set wage scales. Workers' incomes should increase at a rate consistent with the maintenance of sound price, profit, and wage relationships and with increase of productivity. ”

“ An important present source of danger to our economy is the possibility that prices might be raised to such an extent that the consuming public could not purchase the tremendous volume of goods and services which will be produced during 1947.
We all know that recent price increases have denied to many of our workers much of the value of recent wage increases. Farmers have found that a large part of their increased income has been absorbed by increased prices. While some of our people have received raises in income which exceed price increases, the great majority have not. ”

“ WAGES.—COST OF PRODUCTION OF LABOR.
As the cheapening of the means of subsistence, when the circle of wants of the laboring class has not correspondingly increased, leads to a decline of wages, so an enhancement of their price must, when wages are already so low as only to be able to satisfy indispensable wants, produce an increase in the rate of wages. ”

“ But, when it is further alleged that even this insufficient remuneration has a tendency to diminish; that there is, in the words of M. Louis Blanc, une baisse continue des salaires; the assertion is in opposition to all accurate information, and to many notorious facts. It has yet to be proved that there is any country in the civilized world where the ordinary wages of labor, estimated either in money or in articles of consumption, are declining; while in many they are, on the whole, on the increase; and an increase which is becoming, not slower, but more rapid. ”

“ With these limitations of the terms, wages not only depend upon the relative amount of capital and population, but cannot, under the rule of competition, be affected by anything else. Wages (meaning, of course, the general rate) cannot rise, but by an increase of the aggregate funds employed in hiring labourers, or a diminution in the number of the competitors for hire; nor fall, except either by a diminution of the funds devoted to paying labour, or by an increase in the number of labourers to be paid. ”

“ Reformers are crying for Low Prices, but revolutionists are demanding Higher Wages (the value of their labor-power) in all the gold standard countries today. They are also working for the abolition of wage-slavery tomorrow. Everywhere we see wages slowly rising to meet the increased cost of living. ”

“ Fluctuation of wages.—Wages in every employment are just as naturally subject to fluctuation under the law of supply and demand as are prices of commodities. Whatever operates to increase the number seeking employment, or to diminish the amount of employment open to competition, reduces the wages. Whatever increases the opportunity for employment, or diminishes the number of persons seeking employment, increases the wages. ”

“ Thus, then, with every improvement of society, with every increase in its capital, the market wages of labour will rise; but the permanence of their rise will depend on the question, whether the natural price of wages has also risen; and this again will depend on the rise in the natural price of those necessaries, on which the wages of labour are expended. ”

“ 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. ”

“ Wages depend mainly upon the demand and supply of [Pg 298] labour, or, roughly, on the proportion between population and capital. It is a common saying that wages are high when trade is good. Capital which was lying idle is brought into complete efficiency, and wages, in the particular occupation concerned, rise. But this is but a temporary fluctuation, and nothing can permanently alter general wages except an increase or diminution of capital itself compared with the quantity of labour offering itself to be hired. ”

“ In the natural advance of society, the wages of labour will have a tendency to fall, as far as they are regulated by supply and demand; for the supply of labourers will continue to increase at the same rate, whilst the demand for them will increase at a slower rate. ”

“ What all sensible workingmen desire, what the advocates of the trade unions say is their chief object, is to get a “steady sufficient wage,” but it has been proved inductively that great fluctuations in price occur in those commodities which require for their production a large proportion of fixed capital. These fluctuations in price are accompanied by corresponding fluctuations in wages and irregularity of employment. But fluctuations in wages and discontinuities in employment are two of the greatest evils which can befall the laboring classes.” ”

“ This chapter deals with the confrontation of labour supply with labour demand, and the equilibrating dynamics. With high unemployment, wage growth may be reduced. With low unemployment there may be ample room for wage demands, and wage inflation can rise. ”

“ If there are a thousand workmen employed, getting $2 each per day, that would be a wage fund of $2,000 a day. If, when prices fall and business becomes dull, the employer should want to reduce the pay of each workman to $1.50 a day, and if the workmen, by striking, should prevent that decrease, and if, then, 25 per cent. of their number should be discharged, the loss to the working class, as a body, and to the community at large, would be the same as though the wages were reduced to $1.50 a day. ”

“ If the productive organization has at its command a plentiful supply of capital; if in the community there are many men possessed of a high order of business ability; if then, 55 labor for the commoner tasks of production is relatively scarce, the work of the ordinary wage earner will be a means of adding considerably to the total of market values produced. Or, as it is sometimes put, each use of labor will be an important use. Labor will be in great demand, and wages will be high. ”

“ That argument is that it will prove impossible to maintain uniform standard wage rates throughout an industry in which the various enterprises are distributed over a wide area; in the several parts of which area the cost of living, the general conditions of labor, and the demand and supply situation for labor differ considerably. ”

“ To know the circumstances most favourable to the [54] increase of what may be termed the wages-fund is a matter of great moment, but is one with which we are not immediately concerned. The question we have now before us, regards not the accumulation of wealth, but its distribution; and the object is, to ascertain what those physical conditions are, which, by encouraging a rapid growth of population, over-supply the labour market, and thus keep the average rate of wages at a very low point. ”

“ Any measure which will increase the demand for labor, relatively to the demand for the other factors of production, will increase the productivity of labor, and will justify the payment of higher wages. Competition between prospective employers will then actually force the payment of higher wages. Similarly, any measure which will decrease the supply of labor will strengthen the bargaining position of the laborer, and, other things remaining equal, will automatically increase wages. ”

“ The employers are not likely to seek such wage rates as will not procure the needed labor supply; and only in rare cases are the wage earners likely to press for increases of wages that would bring about an increased measure of unemployment. ”

“ The lag of wages behind prices varies in degree in different industries and occupations, for neither prices nor wages go up uniformly. The general direction of wage change is marked, but there is nevertheless considerable variation in the amount 93 of wage change. ”

“ Whenever wages rise, population quickly increases, and this increase carries the rate of pay down to its former level. The earnings of labor depend upon the number of laborers; a lessening of the number of workers raises their earnings and an increase depresses them; and therefore, if every rise in pay brings about a quick increase of population, labor can never hold its gains; every rise is the cause of a subsequent fall. ”

“ A higher rate of wages during shorter hours of work, when the work is done with vigour and efficiency, and the certainty that the wage will be increased if results are favourable, are necessary conditions for industrial welfare and industrial peace. The wage system should be so designed as to make it clear that the wage is a share in the industry's earnings which is to advance as these earnings advance. ”

“ It cannot be too strongly emphasized that high rates of wages do not necessarily mean high earnings—they frequently mean no earnings and no work. Increasing the productive efficiency of labour does increase the ability of industry to pay. ”

“ This is but to restate some of the important influences governing the wages of the lowest groups of industrial workers. But to restate them is to emphasize the fact that the living wage policy must be looked upon merely as one agency among many, directed to the same end. In economic affairs, as in political affairs, to bring about a change in one place it is necessary to bring about a change in many places. ”

“ Any increase in wages has to be divided over the average strength of a family, which will show how disproportionate the increase in wages is to the increase in prices. In a family of five with one or two earning hands the increase in wages is two-fold at the most. ”

“ In fact, if any large number of workers earn less than this amount, we will find it impossible to maintain the levels of purchasing power needed to sustain the stable prosperity which we desire. Raising the minimum to 75 cents an hour will provide the wage earner with an annual income of $1,500 if he is fully employed.
The proposed higher minimum wage levels are feasible without involving serious price adjustments or serious geographic dislocations.
Today about 20 percent of our manufacturing wage earners--or about 2 million-earn less than 65 cents an hour. ”

“ It is not merely the wage scale that must be kept up but the amount of wages that a worker receives over the course of a year. This is only another way of saying that what we need, fundamentally, is a broader distribution of the profits of industry. ”

“ A rise in wages, from an alteration in the value of money, produces a general effect on price, and for that reason it produces no real effect whatever on profits. On the contrary, a rise of wages, from the circumstance of the labourer being more liberally rewarded, or from a difficulty of procuring the necessaries on which wages are expended, does not produce the effect of raising price, but has a great effect in lowering profits. ”

“ But the effects of an increase in the supply of labor in the sense of a growth in the numbers of the population are far more dubious. Unaccompanied by an increase in the demand for labor, it must result in a diminished remuneration for the individual worker. ”