Chapter 8e: Seasonal and Sticky wages
Seasonal and Sticky wages
It is pretended that, workers are more idle in cheap years, while more industrious in dear years.
- A plentiful subsistence relaxes their industry
- A scanty one quickens their industry.
- Above-ordinary wages may render some workers idle, but not all workers.
- In reality, people work better:
- when they are well fed than ill fed
- when they are in good spirits than when they are disheartened
- when they are in good health, than when they are sick
- Years of scarcity are years of sickness among the common people.
- These reduce their productivity.
In years of plenty, workers frequently leave their employers and work for themselves.
- But the cheapness of goods in years of plenty increases the fund for wages and encourages masters, especially farmers, to employ more.
- Farmers then expect more profit from their corn by adding more workers than by selling it at a low price.
- The demand for workers increases, while the number of workers in the market decreases.
- "The price of labour, therefore, frequently rises in cheap years."
In years of scarcity, the difficulty and uncertainty of subsistence make all such people eager to return to employment.
- But the high price of goods reduces wages
- It disposes employers to lessen their workers.
- Poor independent workmen also frequently consume their little stocks.
- They are obliged to become journeymen for subsistence.
- The labour market is oversupplied and many are willing to take lower wages, thus lowering wages in dear years.
All employers frequently make better bargains with their servants in dear than in cheap years.
- They become more more humble and dependent in dear that in cheap years.
- They naturally commend the dear years as more favourable to industry.
- Landlords and farmers are the two of the largest classes of masters.
- The rents of the landlord and the profits of the farmer depend very much upon the price of provisions and thus are happy in dear year.
Nothing can be more absurd than to imagine that men should work less when they work for themselves, than when they work for other people.
- A poor independent worker will generally be more industrious than even a journeyman who works by the piece.
- The independent worker enjoys the whole produce of his own industry.
- The journeyman shares the produce of his labour with his employer.
- He is more liable to the temptations of bad company which in large manufactories frequently ruin his own morals.
- The independent worker is superior to workers hired monthly or yearly and whose wages are the same whether they do much or do little.
- Cheap years increase the proportion of independent workers to journeymen and workers while dear years diminish it.
Louis Messance is a knowledgable and ingenuous French author.
- He is the receiver of the tailles in the election of St. Etienne.
- He showed that the poor do more work in cheap than in dear years by comparing the quantity and value of the goods:
- in the coarse woollens at Elbeuf
- in the linen of Rouen
- in the silk of Rouen
- He showed that the quantity and value of those goods:
- were greater in cheap than in dear years
- greatest during the cheapest years
- least during the dearest years
- All three were stationary manufactures, or which their production was neither going backwards nor forwards.
Linen manufacture in Scotland and the coarse woollens in the west riding of Yorkshire are growing manufactures.
- Their production is increasing in quantity and value.
- However, its variations are not connected with the dearness or cheapness of the seasons.
- 1740 was a year of great scarcity.
- Both manufactures declined very much then.
- 1756 was another year of great scarcity.
- The Scotch manufacture made above average advances.
- But the Yorkshire manufacture declined.
- Its produce did not rise to what it had been in 1755 to 1766, after the repeal of the American stamp act.
- In 1766 and 1767, it greatly exceeded its past produce.
- It has continued to advance ever since.
50 The produce of all great manufactures for distant sale must necessarily depend, not so much upon the dearness or cheapness of the seasons but instead on:
- the demand of the consuming countries
- peace or war
- the prosperity or declension of other rival manufactures
- the good or bad humour of their principal customers
Most of the work, which is probably done in cheap years, never enters the public registers of manufactures.
- The male servants who leave their masters become independent labourers.
- The female servants return to their parents and make clothes for themselves and their families.
- The independent worker are employed by their neighbours to manufacture for family use.
- Their production is frequently not recorded.
- It does not make its way into publications which our merchants and manufacturers use to announce the prosperity of empires.
51 Although variations in wages are frequently opposite the variations in the price of provisions, the price of provisions has an influence on wages.
- The money price of labour is regulated by two circumstances:
- The demand for labour
- The price of the necessaries and conveniencies of life
- The demand for labour determines the real wages of the labourer according to the society's advancing, stationary, or declining state, which requires an increasing, stationary, or declining population.
- The money price of labour is determined by what is needed for buying this amount.
- The money price of labour is sometimes high where the price of goods is low.
- But it would be still higher if the price of goods was high.
The money price of labour rises because the demand for labour:
- increases in years of sudden and extraordinary plenty and
- sinks in years of sudden and extraordinary scarcity.
In a year of sudden and extraordinary plenty, many employers have funds to employ more industrious people than the year before.
- The employers who want more workers bid against each other.
- They sometimes raise both the real and the money price of labour.
In a year of sudden and extraordinary scarcity, the funds for employing industry are less than the year before.
- Many people are unemployed and bid against each other to get employment
- They sometimes lower both the real and money price of labour.
- 1740 was a year of extraordinary scarcity.
- Many people were willing to work for bare subsistence.
- In the succeeding years of plenty, it was more difficult to get workers.
The scarcity of a dear year reduces the demand for labour and tends to lower its price, just as the high price of provisions raises it.
- The plenty of a cheap year increases the demand and tends to raise the price of labour, just as the cheapness of provisions tends to lower it.
- Those two opposite causes counterbalance each other.
- It is probably why wages are everywhere more steady and permanent than the price of provisions.
The increase in wages:
- increases the price of many commodities by increasing its wage component, and
- reduces their consumption at home and abroad.
The increase of stock which raises wages tends to increase its productivity.
- It makes fewer labour produce more work.
- An employer who has many labourers, necessarily endeavours for his own advantage, to make a proper division and distribution of employment to maximize the amount of work.
- He supplies them with the best machinery.
- What happens in a workhouse happens for the rest of society for the same reason.
- The more the workers, the more they naturally divide themselves into different subdivisions of employment.
- More workers invent the necessary machinery for work.
- More commodities come to be produced by less labour.
- The increase in wages is more than compensated by the less labour needed.
Next: Chapter 9a: Profits