How the Worker Creates His
Wages
THE laborer who receives his wages in money (coined or printed, it may be, before
his labor commenced) really receives in return for the addition his labor has
made to the general stock of wealth, a draft upon that general stock, which he
may utilize in any particular form of wealth that will best satisfy his desires;
and neither the money, which is but the draft, nor the particular form of wealth
which he uses it to call for, represents advances of capital for his maintenance,
but on the contrary represents the wealth, or a portion of the wealth, his labor
has already added to the general stock. — Progress & Poverty — Book
I, Chapter 1: Wages and Capital: The Current Doctrine of Wages — Its Insufficiency
THE miner who, two thousand feet underground in the heart of the Comstock, is
digging out silver ore, is in effect; by virtue of a thousand exchanges, harvesting
crops in valleys five thousand feet nearer the earth's center; chasing the whale
through Arctic icefields; plucking tobacco leaves in Virginia; picking coffee
berries in Honduras; cutting sugar cane on the Hawaiian Islands; gathering cotton
in Georgia or weaving it in Manchester or Lowell; making quaint wooden toys for
his children in the Hartz Mountains; or plucking amid the green and gold of Los
Angeles orchards the oranges which, when his shift is relieved, he will take
home to his sick wife. The wages which he receives on Saturday night at the mouth
of the shaft, what are they but the certificate to all the world that he has
done these things — the primary exchange in the long series which transmutes
his labor into the things he has really been laboring for? — Progress & Poverty — Book
I, Chapter 1: Wages and Capital: The Current Doctrine of Wages — Its Insufficiency
LABOR always precedes wages. This is as universally true of wages received by
the laborer from an employer as it is of wages taken directly by the laborer
who is his own employee. In the one class of cases as in the other, reward is
conditioned upon exertion. Paid sometimes by the day, oftener by the week or
month, occasionally by the year, and in many branches of production by the piece,
the payment of wages by an employer to an employee always implies the previous
rendering of labor by the employee for the benefit of the employer, for the few
cases in which advance payments are made for personal services are evidently
referable either to charity or to guarantee and purchase. — Progress & Poverty — Book
I, Chapter 3: Wages and Capital: Wages not drawn from capital, but produced by
the labor
THE payment of wages always implies the previous rendering of labor. Now, what
does the rendering of labor in production imply? Evidently the production of
wealth, which, if it is to be exchanged or used in production, is capital. Therefore,
the payment of capital in wages pre-supposes a production of capital by the labor
for which the wages are paid. And as the employer generally makes a profit, the
payment of wages is, so far as he is concerned, but the return to the laborer
of a portion of the capital he has received from the labor. So far as the employee
is concerned, it is but the receipt of a portion of the capital his labor has
previously produced. As the value paid in the wages is thus exchanged for a value
brought into being by the labor, how can it be said that wages are drawn from
capital or advanced by capital? As in the exchange of labor for wages the employer
always gets the capital created by the labor before he pays out capital in the
wages, at what point is his capital lessened even temporarily? — Progress & Poverty — Book
I, Chapter 3: Wages and Capital: Wages not drawn from capital, but produced by
the labor
To recapitulate: The man who works for himself gets his wages in the things he
produces, as he produces them, and exchanges this value into another form whenever
he sells the produce. The man who works for another for stipulated wages in money,
works under a contract of exchange. He also creates his wages as he renders his
labor, but he does not get them except at stated times, in stated amounts and
in a different form. In performing the labor he is advancing in exchange; when
he gets his wages the exchange is completed. During the time he is earning the
wages he is advancing capital to his employer, but at no time, unless wages are
paid before work is done, is the employer advancing capital to him. Whether the
employer who receives this produce in exchange for the wages, immediately re-exchanges
it, or keeps it for awhile, no more alters the character of the transaction than
does the final disposition of the product made by the ultimate receiver, who
may, perhaps, be in another quarter of the globe and at the end of a series of
exchanges numbering hundreds. — Progress & Poverty — Book
I, Chapter 3: Wages and Capital: Wages not drawn from capital, but produced by
the labor
THE
fundamental principle of human action — the law that is to political
economy what the law of gravitation is to physics — is that men
seek to gratify their desires with the least exertion. . . . Now, under
this principle, what, in conditions of freedom, will be the terms at
which one man can hire others to work for him? Evidently, they will
be fixed by what the men could make if laboring for themselves. The
principle which will prevent him from having to give anything above
this 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. Did he offer less, none
would accept the terms, as they could obtain greater results by working
for themselves. 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 or produce 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. — Progress & Poverty Book
III, Chapter 6 — The Laws of Distribution: Wages and the Law
of Wages
THE effect of all
the circumstances which give rise to the differences between
wages in different occupations
may be included as supply and demand, and it is perfectly correct to
say that the wages in different occupations will vary relatively according
to differences in the supply and demand of labor — meaning by
demand the call which the community as a whole makes for services of
the particular kind, and by supply the relative amount of labor which,
under the existing conditions, can be determined to the performance
of those particular services. But though this is true as to the relative
differences of wages, when it is said, as is commonly said, that the
general rate of wages is determined by supply and demand, the words
are meaningless. For supply and demand are but relative terms. The
supply of labor can only mean labor offered in exchange for labor,
or the produce of labor, and the demand for labor can only mean labor
or the produce of labor offered in exchange for labor. Supply is thus
demand, and demand supply, and in the whole community, one must be
coextensive with the other. — Progress & Poverty Book
III, Chapter 6 — The Laws of Distribution: Wages and the Law
of Wages
THUS, although they may from time to time alter in relation to each
other, as the circumstances which determine relative levels change,
yet it is evident that
wages in all strata must ultimately depend upon wages in the lowest and widest
stratum — the general rate of wages rising or falling as these rise or
fall.
Now, the primary and fundamental occupations, upon which, so to speak,
all others are built up, are evidently those which procure wealth directly
from nature;
hence the law of wages in them must be the general law of wages. And, as wages
in such occupations clearly depend upon what labor can produce at the lowest
point of natural productiveness to which it is habitually applied; therefore,
wages generally depend upon the margin of cultivation, or, to put it more exactly,
upon the highest point of natural productiveness to which labor is free to apply
itself without the payment of rent. — Progress & Poverty Book
III, Chapter 6 — The Laws of Distribution: Wages and the Law of Wages
NOW, why is it that men, have to work for such low wages? Because,
if they were to demand higher
wages, there are plenty of unemployed men ready to step into
their places. It is this mass of unemployed men who compel that
fierce competition that drives wages down to the point of bare
subsistence. Why is it that there are men who cannot get employment?
Did you ever think what a strange thing it is that men cannot
find employment? If men cannot find an employer, why can they
not employ themselves? Simply because they are shut out from the
element on which human labor can alone be exerted; men are compelled
to compete with each other for the wages of an employer, because
they have been robbed of the natural opportunities of employing themselves;
because they cannot find a piece of God's world on which to work
without paying some other human creature for the privilege. — The
Crime of Poverty
WE laud as public benefactors those who, as we say, "furnish employment." We
are constantly talking as though this "furnishing of employment," this "giving
of work" were the greatest boon that could be conferred upon society. To listen
to much that is talked and much that is written, one would think that the cause
of poverty is that there is not work enough for so many people, and that if the
Creator had made the rock harder, the soil less fertile, iron as scarce as gold,
and gold as diamonds; or if ships would sink and cities burn down oftener, there
would be less poverty, because there would be more work to do. — Social
Problems, Chapter
8 — That We All Might Be Rich
YOU assert the right of laborers to employment and their right to receive from
their employers a certain indefinite wage. No such rights exist. No one has a
right to demand employment of another, or to demand higher wages than the other
is willing to give, or in any way to put pressure on another to make him raise
such wages against his will. There can be no better moral justification for such
demands on employers by working-men than there would be for employers demanding
that working-men shall be compelled to work for them when they do not want to,
and to accept wages lower than they are willing to take. — The
Condition of Labor, an Open Letter to Pope Leo XIII
THE natural right which each man has, is not that of demanding employment or
wages from another man, but that of employing himself — that of applying
by his own labor to the inexhaustible storehouse which the Creator has in the
land provided for all men. Were that storehouse open, as by the single tax we
would open it, the natural demand for labor would keep pace with the supply,
the man who sold labor and the man who bought it would become free exchangers
for mutual advantage, and all cause for dispute between workman and employer
would be gone. For then, all being free to employ themselves, the mere opportunity
to labor would cease to seem a boon; and since no one would work for another
for less, all things considered, than he could earn by working for himself, wages
would necessarily rise to their full value, and the relations of workman and
employer be regulated by mutual interest and convenience. — The
Condition of Labor, an Open Letter to Pope Leo XIII
AND will not the community
gain by thus refusing to kill the goose that lays the golden eggs;
by thus refraining from muzzling the ox that treadeth out the corn;
by thus leaving to industry, and thrift, and skill, their natural reward,
full and unimpaired? For there is to the community also a natural reward.
The law of society is, each for all, as well as all for each. No one
can keep to himself the good he may do, any more than he can keep the
bad. Every productive enterprise, besides its return to those who undertake
it, yields collateral advantages to others. If a man plant a fruit
tree, his gain is that he gathers the fruit in its time and season.
But in addition to his gain, there is a gain to the whole community.
Others than the owner are benefited by the increased supply of fruit;
the birds which it shelters fly far and wide; the rain which it helps
to attract falls not alone on his field; and, even to the eye which
rests upon it from a distance, it brings a sense of beauty. And so
with everything else. The building of a house, a factory, a ship, or
a railroad, benefits others besides those who get the direct profits.
Nature laughs at a miser. He is like the squirrel who buries his nuts
and refrains from digging them up again. Lo! they sprout and grow into
trees. In fine linen, steeped in costly spices, the mummy is laid away.
Thousands and thousands of years thereafter, the Bedouin cooks his
food by a fire of its encasings, it generates the steam by which the
traveler is whirled on his way, or it passes into far-off lands to
gratify the curiosity of another race. The bee fills the hollow tree
with honey, and along comes the bear or the man. — Progress & Poverty — Book
IX, Chapter 1, Effects of the Remedy: Of the Effect upon the Production
of Wealth
CONSIDER the effect of such a change upon the labor market. Competition
would no longer be one-sided, as now. Instead of laborers competing with
each other for employment, and in their competition cutting down wages to
the point of bare subsistence, employers would everywhere be competing for
laborers, and wages would rise to the fair earnings of labor. For into the
labor market would have entered the greatest of all competitors for the employment
of labor, a competitor whose demand cannot be satisfied until want is satisfied — the
demand of labor itself. The employers of labor would not have merely to bid
against other employers, all feeling the stimulus of greater trade and increased
profits, but against the ability of laborers to become their own employers
upon the natural opportunities freely opened to them by the tax which prevented
monopolization. — Progress & Poverty — Book
IX, Chapter 1, Effects of the Remedy: Of the Effect upon the Production of
Wealth
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