The Economic Theory 
 
 OF A 
 
 Legal Minimum Wage 
 
 By 
 
 Sidney Webb 
 
 Reprinted from The Journal of Political Economy, 
 University of Chicago Press, December 1912, by the 
 
 NATIONAL CONSUMERS’ LEAGUE 
 
 106 East 19TH Street 
 
 New York 
 
Digitized by the Internet Archive 
 in 2017 with funding from 
 
 University of Illinois Urbana-Champaign Alternates 
 
 https://archive.org/details/economictheoryofOOwebb 
 
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 The Economic Theory of a Legal Minimum Wage 
 
 The fixing of a Minimum Wage by law—making it a penal 
 offense to hire labor at a lower rate than that fixed by the law— 
 is now an accomplished fact, of which the world has had half a 
 generation of experience. In this matter of the Legal Minimum 
 Wage the sixteen years’ actual trial by Victoria is full of instruc¬ 
 tion. Victoria, which is a highly developed industrial State, of 
 great and growing prosperity, had long had Factory Laws, much 
 after the English fashion. In 1896, largely out of humanitarian 
 feeling for five specially “sweated” trades, provision was made for 
 the enforcement in those trades of a Legal Minimum Wage. 
 Naturally this was opposed by all the arguments with which we are 
 familiar—that it was “against the laws of Political Economy,” 
 that it would cause the most hardly pressed businesses to shut down, 
 that it would restrict employment, that it would drive away Capital, 
 that it would be cruel to the aged worker and the poor widow, that 
 it could not be carried out in practice, and so on and so forth. 
 Naturally, too, all sorts of criticisms have since been leveled at the 
 administration and working of the law; and over and over again 
 eager opponents, both in England and on the spot, have hastened 
 to report that it had broken down. But what had been the result? 
 In the five sweated trades to which the law was first applied sixteen 
 years ago, wages have gone up from 12 to 35 per cent, the hours 
 of labor have invariably been reduced, and the actual number of 
 persons employed, far from falling, has in all cases, relatively to 
 the total population, greatly increased. Thus the Legal Minimum 
 Wage does not necessarily spell ruin, either for the employers or 
 for the operatives. But, of course, it is open to any theorist to urge 
 that we do not know how much better off these trades might have 
 been without the Act. The only test here is what the people say 
 who are directly concerned, who see with their own eyes the law 
 actually at work, and who are forced daily to compare the trades 
 to which it applies with those to which it does not apply. First, 
 let us notice that the Act of 1896 (like the British Trade Boards 
 Act of 1909) was only a temporary one. It has during the past 
 
 3 
 
sixteen years been incessantly discussed; it has been over and over 
 again made the subject of special inquiry; it has been repeatedly 
 considered by the Legislature; and, as a result, it has been five 
 successive times renewed by consent of both Houses. Can it be 
 that all this is a mistake? Still more convincing, however, are the 
 continuous demands from the other trades, as they witnessed the 
 actual results of the Legal Minimum Wage where it was in force, 
 to be brought under the same law. 
 
 Provision is made for this extension by resolutions which have 
 to be passed by both Houses of the Legislature. The first trades 
 to which the law was applied were those of bootmaking and baking 
 (employing mainly men), clothing, shirts, and underclothing 
 (employing mainly women), and the very troublesome furniture 
 trade, in which the Chinese had gained a secure footing. It 
 naturally took some time to get the law to work, to overcome the 
 inevitable difficulties and to demonstrate any results. Accordingly 
 for four years there was no extension. In 1900, however, we had 
 the brickmakers coming in, and the butchers, the cigar makers 
 and the confectioners, the coopers and the engravers, the fell- 
 mongers, the jewelers, and the jam trade, the makers of millet 
 brooms and the pastrycooks, the plateglass manufacturers and the 
 potters, the saddlers and the tanners, the tinsmiths and the wood¬ 
 workers, the woolen manufacturers and, perhaps most significant 
 of all, the strongly organized printers, including the compositors 
 in the great newspaper offices. In the following year (1901), so 
 far from there being any signs of repentance, there was an equal 
 rush of extensions of the law to industries of all kinds—the aerated 
 water makers and the manufacturers of artificial manure, the brass- 
 workers and the bedstead makers, the brewers and the brush- 
 workers, the ironmoulders and the makers of leather goods, the 
 malsters and the ovenmakers, the stonecutters and the workers 
 in wicker. For three years there was then a pause, the Legal 
 Minimum Wage being only demanded by and extended to the dress¬ 
 makers in 1903. In 1906 came another rush of trades, the agri¬ 
 cultural implement makers, the cardboard box makers, the candle 
 makers, the cycle trade, the farriers and the flour millers, the 
 milliners and the paper bag makers, the manufacturers of starch, 
 soap, and soda, and the makers of waterproof clothing. In the 
 following year (1907), only the glassworkers and the picture frame 
 makers came in. The year 1908 saw the application of the law 
 to the bread carters, the hairdressers, the manufacturers of ice 
 
 4 
 
and the wireworkers. In 1909 it was extended to the carpenters, 
 the carriage builders, the carters, the drapers, the electro-platers, 
 the grocers, the ham and bacon curers, the dealers in coal, wood, 
 hay, and chaff, the makers of men’s clothing, the organ builders, the 
 painters, the manufacturers of polish, the plumbers, the quarrymen, 
 the makers of rubber goods, and that mysterious craft the tuck- 
 pointers. During 1910 there came in the boiler makers, the boot¬ 
 makers, the brick-layers, the coal miners, the electrical engineers, 
 the factory and mining engine drivers, the gold miners, the hard¬ 
 ware makers and the hotel employees, the marine-store dealers, 
 the plasterers, the stationers, the teapackers, the tilers, the watch¬ 
 makers, the slaughterers for export, the undertakers and even the 
 lift attendants. What occupations were left to come in during 
 1911 and 1912 I do not yet know. 
 
 Now, in this remarkable popular demonstration of the success 
 of the Act, tested by the not inconsiderable period of sixteen years, 
 extending over years of relative trade depression as well as over 
 years of boom, some features deserve mention. First, the exten¬ 
 sions have frequently—indeed, it may be said usually—taken place 
 at the request, or with the willing acquiescence, of the employers 
 in a trade, as well as of the wage earners. What the employers 
 appreciate is, as they have themselves told me, the very fact, that 
 the Minimum Wage is fixed by law and therefore really forced 
 on all employers: the security that the Act accordingly gives them 
 against being undercut by the dishonest or disloyal competitors, 
 # who simply will not (in Victoria as in the Port of London) adhere 
 to the Common Rules agreed upon by Collective Bargaining. We 
 must notice, too, that the application of the law has been demanded 
 by skilled trades as well as by unskilled, by men as well as by women, 
 by highly paid craftsmen and by sweated workers, by the strongly 
 organized trades as well as by those having no Unions at all. One 
 is tempted, indeed, to believe that little remains now outside its 
 scope except the agricultural occupations and domestic service! 
 Nor can it be said to be confined to industries enjoying a protective 
 tariff, for there are no import duties to shield the gold miners, or 
 the quarrymen, or the slaughterers for export; and no fiscal pro¬ 
 tection helps the carters or the butchers, the drapers’ assistants or 
 the engine drivers, the newspaper printers or the potters, the grocers 
 or the hairdressers, the hotel employees or the lift attendants. 
 And it is difficult to believe that the enforcement of a Legal Mini¬ 
 mum Wage in all these hundred different industries, employing 
 
 5 
 
110,000 persons (being, with their families, more than a quarter of 
 the entire population of the State), has interfered with the profit¬ 
 ableness of industry, when the number of factories has increased, 
 in the sixteen years, by no less than 60 per cent, and the numbers of 
 workers in them have more than doubled. Certainly, no statesman, 
 no economist, no political party nor any responsible newspaper of 
 Victoria, however much a critic of details, ever dreams now of 
 undoing the Minimum Wage Law itself. 
 
 But turning, now, from actual experience of the working of a 
 Legal Minimum Wage, to abstract economic theory, we must first 
 get clearly before us the distinction between the fixing and enforcing 
 of a Minimum, and the fixing and enforcing of a wage. What is 
 here in question (as in all factory legislation) is a Minimum, not 
 a Maximum—still less any actual decision that the wage shall be 
 such or such sum. It ought not to be necessary to point this out. 
 But the ignorance and stupidity of people calling themselves edu¬ 
 cated is, in this matter, beyond all belief. Nearly every day I am 
 told, or I read, that this Minimum Wage legislation is merely a 
 revival of the mediaeval fixing of wages by the Justices of the Peace, 
 or the eighteenth-century fixing of wages by the Tailors’ Acts or 
 the Spitalfields Weavers Acts, which had, it is asserted, such dis¬ 
 astrous consequences. I wonder how long it will take before such 
 people (economists, I am afraid, not wholly excluded) will realize 
 that they are, in making such statements, simply making fools of 
 themselves, revealing an ignorance of the subject so abysmal as 
 to put themselves beyond the pale. The ancient legislation to 
 which they refer, by definitely prescribing the actual rates to be 
 paid, fixed maximum wages, not merely a minimum. There is no 
 sort of resemblance or analogy between prescribing that the work¬ 
 people shall under no circumstances get more than a specified rate, 
 and merely enacting that they shall under no circumstances get 
 less. The whole economic and social consequences and results 
 of the two types of legislation, and their effects on employers and 
 on industry, are as different as chalk is from cheese. 
 
 The principal question for the economist to consider is how the 
 adoption and enforcement of a definite minimum of wages in par¬ 
 ticular trades is likely to affect, both immediately and in the long 
 run, the productivity of those trades, and of the nation’s industry 
 as a whole. 
 
 Now upon this point the verdict of economic theory, whatever 
 it may be worth, is, I submit, emphatic and clear. To the modern 
 
 6 
 
economist there seems nothing in the device of a legal minimum of 
 wages, especially where (as would in the great majority of trades 
 be the case) it takes the form of a Standard Piecework List, that is 
 in any way calculated to diminish productivity. On the contrary, 
 all experience, as well as all theory, seems to show that, as com¬ 
 pared with no regulation of wages, or with leaving the employer 
 free to deal individually with each operative, it must tend actually 
 to increase the productivity of the industry. Here we have, in 
 fact, the lesson of actual experience from a whole century of indus¬ 
 trial history. It is only necessary to watch the operation, in trade 
 after trade, of analogous Common Rules, many of them enforced 
 by law. These Common Rules, like the Legal Minimum Wage, 
 are always minima, not maxima. Every employer naturally pre¬ 
 fers to be free to do whatever he chooses; to compete in anyway 
 he pleases, on the downward way as well as on the upward way. 
 But the enforcement in any industry, whether by law or by public 
 opinion, or by strong Trade Unionism, of a Standard Rate, a Normal 
 Day and prescribed conditions of sanitation and safety, does not 
 prevent the employer’s choice of one man rather than another, or 
 forbid him to pick, out of the crowd of applicants, the strongest, 
 the most skillful, or the best conducted workman. The universal 
 enforcement of a Legal Minimum Wage in no way abolishes compe¬ 
 tition for employment. It does not even limit the intensity of such 
 competition, or the freedom of the employer to take advantage 
 of it. All that it does is to transfer the pressure from one element 
 in the bargain to the other: from the wage to the work, from price 
 to quality. In fact, this exclusion from influence on the contract 
 of all degradation of price, whether it takes the form of lower rates 
 of wages, longer hours of labor, or worse conditions of sanitation 
 and safety, necessarily heightens the relative influence on the con¬ 
 tract of all the elements that are left. If the conditions of employ¬ 
 ment are unregulated, it will frequently “pay” an employer (though 
 it does not pay the community for him to do so) not to select the 
 best workman, but to give the preference to an incompetent or infirm 
 man, a “boozer” or a person of bad character, provided that he 
 can hire him at a sufficiently low wage, make him work excessive 
 and irregular hours, or subject him to insanitary or dangerous con¬ 
 ditions. In short, the employer may (in the absence of definitely 
 fixed minimum conditions) make more profit, though less product, 
 out of inefficient workmen than out of good workmen. With a 
 Legal Minimum Wage, and with similarly fixed hours and sanitary 
 
conditions, this frequent lowering of productivity is prevented. If 
 the employer cannot go below a common minimum rate, and is 
 unable to grade the other conditions of employment down to the 
 level of the lowest and most necessitous wage earner in his estab¬ 
 lishment, he is economically impelled to do his utmost to raise the 
 level of efficiency of his workers, so as to get the best possible return 
 for the fixed conditions. 
 
 This is the basis of the oft-repeated accusation brought by the 
 sentimental lady or charity worker against the Trade Union Stand¬ 
 ard Rate, and now, in England, by foolish persons against the 
 Workmen’s Compensation Act, that it prevents an employer from 
 preferentially selecting an old man, or a physical or moral invalid, 
 when there is a vacancy to be filled. But it is clear that the aggre¬ 
 gate efficiency of the nation’s industry is promoted by every situation 
 being filled by the best available candidate. If the old man is 
 engaged instead of the man in the prime of life, because he can 
 be hired at a lower rate, the man of irregular habits rather than 
 the steady worker, because the former is prepared to take smaller 
 wages, there is a clear loss all round. From the point of view of 
 the economist, concerned to secure the highest efficiency of the 
 national industry, it must be counted to the credit of the Legal 
 Minimum Wage that it compels the employer, in his choice of men to 
 fill vacancies, seeing that he cannot get a “cheap hand,” for the price 
 that he has to pay, to be always striving to exact greater strength 
 and skill, a higher standard of sobriety and regular attendance, and 
 a superior capacity for responsibility and initiative. This is exactly 
 what has happened in Victoria under the Minimum Wage Law, 
 as it has happened in Great Britain where a definitely fixed mini¬ 
 mum has been substituted for the irregular competitive rates, which, 
 in the absence of a Common Rule, the sharp or “cutting” employer 
 can enforce on the weakest or most necessitous workers. Thus, 
 a Legal Minimum Wage positively increases the productivity of 
 the nation’s industry, by ensuring that the surplus of unemployed 
 workmen shall be exclusively the least efficient workmen; or to 
 put it in another way, by ensuring that all the situations shall be 
 filled by the most efficient operatives who are available. This 
 is plainly not the case under “free competition” where there is 
 no fixed minimum. 
 
 But the enforcement of a Legal Minimum Wage does more than 
 act as a perpetual stimulus to the selection of the fittest men for 
 employment. The fact that the employer’s mind—no longer able 
 
 8 
 
to seek profit by “nibbling” at wages—is constantly intent on 
 getting the best possible workmen, silently and imperceptibly 
 reacts on the wage earners. The young workman, knowing that X 
 he cannot secure a preference for employment by offering to put 
 up with worse conditions than the standard, seeks to commend him¬ 
 self by a good character, technical skill, and general intelligence. 
 Under a Legal Minimum Wage there is secured what under per¬ 
 fectly free competition is not secured, not only a constant selec¬ 
 tion of the most efficient but also a positive stimulus to the whole 
 class to become more and more efficient. It is unnecessary here 
 to dwell on the enormous moral advantage of such a permanently 
 acting, all-pervasive influence on character. But this, too, has an 
 economic value, in increasing productivity. 
 
 So far we have considered merely the effect upon productivity 
 of enforcing a Minimum Wage, quite irrespective of this involving a 
 positive increase of wages. But to enforce a minimum is actually 
 to raise the wages of, at any rate, some of the worst paid operatives. 
 
 We have, therefore, to consider also the effect on the living human 
 being of the more adequate wages that the enforcement of a legal 
 minimum would involve in the lowest grades. If unrestricted 
 individual competition among the wage earners resulted in the 
 universal prevalence of a high standard of physical and mental 
 activity, it would be difficult to argue that a mere improvement of 
 sanitation, a mere shortening of the hours of labor, or a mere in¬ 
 crease in the amount of food and clothing obtained by the workers 
 or their families, would of itself increase their industrial efficiency. 
 
 But such ideal conditions are far from prevailing in any country. 
 
 In the United Kingdom at least eight millions of the population— 
 over one million of them, as Mr. Charles Booth tells us, in London 
 alone—are at the present time existing under conditions represented 
 by family earnings of less than five dollars a week. It is notorious 
 that even in the United States there are millions of families unable 
 to earn regularly throughout the whole year as much as ten dollars 
 a week: a sum which does not afford, at present prices, in the slums 
 of New York or Chicago, Pittsburgh or Cincinnati, enough for a 
 physiologically healthy existence. The unskilled, and especially 
 the casually hired laborer, who is inadequately fed, whose clothing 
 is scanty and inappropriate to the season, who lives with his wife 
 and children in a single room in a slum tenement, and whose spirit 
 is broken by the ever-recurring irregularity of employment, cannot 
 by any incentive be stimulated to much greater intensity of effort, 
 
 9 
 
for the simple reason that his method of life makes him incapable 
 of either the physical or mental energy that would be involved. 
 Even the average mechanic or factory operative, who earns in the 
 United Kingdom from five to ten dollars a week, seldom obtains 
 enough nourishing food, an adequate amount of sleep, or sufficiently 
 comfortable surroundings to allow him to put forth the full physical 
 and mental energy of which his frame is capable. The cool observer 
 of the conditions of life of that half of the American people who 
 have to live on family earnings that do not exceed five hundred 
 dollars in a year, cannot refrain from placing them in the same 
 case. No “intellectual” who has lived for any length of time in 
 households of typical factory operatives or artisans in England 
 or in the United States, can have failed to become painfully aware 
 of their far lower standard of nutrition, clothing, and rest than his 
 own, and also of their lower standard of vitality and physical and 
 mental exertion. It has accordingly been pointed out by many 
 economists, from J. R. M’Culloch to Alfred Marshall, that, at any 
 rate so far as the weakest and most necessitous workers are con¬ 
 cerned, improved conditions of employment bring with them a 
 positive increase of production. “A rise in the Standard of Life 
 for the whole population,” we are expressly told, “will much increase 
 the National Dividend, and the share of it which accrues to each 
 trade.” We see, therefore, that a Legal Minimum Wage, so far 
 as the wage earner is concerned, is calculated—at any rate if it takes 
 the form of a Standard Piecework List—to promote the action 
 of both forces of evolutionary progress; it tends constantly to the 
 selection of the fittest, and at the same time provides both the mental 
 stimulus and the material conditions necessary for functional adapta¬ 
 tion to a higher level of skill and energy. 
 
 But we have got into the habit of thinking that the productivity 
 of industry depends more upon the efficiency of the brains and 
 machinery employed, than upon the quality of the manual laborers. 
 Let us, therefore, consider the probable effects of a Legal Minimum 
 Wage upon the brain-workers, including under this term all who 
 are concerned in the direction of industry. Here the actual expe¬ 
 rience of the Factory Acts and of strong Trade Unionism is very 
 instructive. When all the employers in a trade find themselves 
 precluded, by the existence of a Common Rule, from worsening 
 the conditions of employment—when, for instance, they are legally 
 prohibited from crowding more operatives into their mills or keeping 
 them at work for longer hours, or, when they find it impossible, 
 
 10 
 
owing to a strictly enforced piecework list, to nibble at wages— 
 they are driven in their competitive struggle with each other, to 
 seek advantage in other ways. We arrive, therefore, at the unex¬ 
 pected result that the enforcement of definite minimum conditions 
 of employment as compared with a state of absolute freedom to 
 the employer to do as he likes, positively stimulates the invention 
 and adoption of new processes of manufacture. This is no new 
 paradox, but has been repeatedly remarked by the opponents of 
 Trade Unionism. Thus Babbage, in 1832, described in detail 
 how the invention and adoption of new methods of forging and 
 welding gun-barrels was directly caused by the combined insistence 
 on better conditions of employment by all the workmen engaged 
 in the old process. 
 
 In this difficulty [he says] the contractors resorted to a mode of welding 
 the gun-barrel according to a plan for which a patent had been taken out by 
 them some years before the event. It had not then succeeded so well as to come 
 into general use, in consequence of the cheapness of the usual mode of welding by 
 hand labour , combined with some other difficulties with which the patentee had 
 to contend. But the stimulus produced by the combination of the workmen for 
 this advance of wages induced him to make a few trials, and he was enabled 
 to introduce such a facility in welding gun-barrels by roller, and such perfec¬ 
 tion in the work itself, that in all probability very few will in future be welded 
 by hand labour. Similar examples [continues Babbage] must have presented 
 themselves to those who are familiar with the details of our manufactories, 
 but these are sufficient to illustrate one of the results of combinations. . . . 
 
 It is quite evident that they have all this tendency; it is also certain that con¬ 
 siderable stimulus must be applied to induce a man to contrive a new and expen¬ 
 sive process; and that in both these cases unless the fear of pecuniary loss had 
 acted powerfully the improvement would not have been made. 
 
 The Lancashire cotton trade supplied the same generation with 
 a classic instance of “Trade Union folly” of this kind. Almost 
 every contemporary observer declares that the adoption of the 
 “self-acting” mule was a direct result of the repeated strikes of the 
 cotton spinners, between 1829 and 1836, to enforce their Standard 
 Piecework Lists, and that many other improvements in this industry 
 sprang from the same stimulus. The Edinburgh Review went so 
 far as to say, in 1835, that “if from the discovery of the spinning 
 frame up to the present, wages had remained at a level, and workers’ 
 coalitions and strikes had remained unknown, we can without 
 exaggeration assert that the industry would not have made half the 
 progress.” And, coming down to our own day, I have myself 
 had the experience of being conducted over a huge steel works in 
 
 ll 
 
Scotland by the late Sir Charles Tennant, one of the ablest and 
 most successful of our captains of industry, and being shown one 
 improvement after another, which had been devised and adopted 
 expressly because the workmen engaged at the old processes had, 
 through their powerful Trade Unions, enforced a definite minimum 
 standard wage. To the old economist, accustomed to the handi¬ 
 craftsman’s blind hostility to machinery, this insistence on a uniform 
 minimum Standard Rate seemed a proof of the shortsightedness 
 of Trade Union action. The modern student perceives that the 
 Trade Unions, in fighting for better conditions of employment than 
 would have been yielded by individual bargaining, and, in parti¬ 
 cular, for a compulsory minimum, were building “better than they 
 knew.” To the wage earners as a class it is of the utmost importance 
 that the other factors in production—capital and brain power— 
 should always be working at their highest possible efficiency, in 
 order that the common product, on which wages no less than profits 
 depend, may be as large as possible. The enforcement of the 
 Common Rule on all establishments concentrates the pressure 
 of competition on the brains of the employers, and keeps them 
 always on the stretch. “Mankind,” says Emerson, “is as lazy 
 as it dares to be,” and so long as an employer can meet the pressure 
 of the wholesale trader, or of foreign competition, by nibbling at 
 wages or “cribbing time,” he is not likely to undertake the “intol¬ 
 erable toil of thought” that would be required to discover a genuine 
 improvement in the productive process, or even, as Babbage can¬ 
 didly admits, to introduce improvements that have already been 
 invented. Hence the mere existence of a Legal Minimum Wage, 
 by debarring the hardpressed employer from the most obvious 
 form of relief—one which is of no advantage to the community— 
 positively drives him to other means of lowering the costs of pro¬ 
 duction, which almost inevitably take the form of increasing 
 productivity. 
 
 But this is not all. Besides its direct effect in stimulating all 
 the employers, the mere existence of a Legal Minimum Wage has 
 another and an even more important result on the efficiency of 
 industry, in that it tends steadily to drive business into those estab¬ 
 lishments which are most favorably situated, best equipped, and 
 managed with the greatest ability, and to eliminate the incom¬ 
 petent or old-fashioned employer. This fact, patent to the prac¬ 
 tical man, was not observed by the older economists. Misled 
 by their figment of the equality of profits, they seemed habitually 
 
 12 
 
to have assumed that an all-round increase in the cost of produc¬ 
 tion would be equally injurious to all the employers in the trade. 
 The modern student at once recognizes that a Legal Minimum 
 Wage, enforced • throughout any trade, must from its very nature, 
 always fail to get at the equivalent of all differential advantages 
 of productive agents above the level of the worst actually employed 
 by the community at any given time. When, for instance, the 
 Amalgamated Association of Operative Cotton Spinners in England 
 secures uniform piecework lists, identical hours of labor, and similar 
 precautions against accident and disease in all English cotton mills, 
 it in no way encroaches upon the extra profits, over and above 
 those of the worst mill, which are earned by firms of long standing 
 reputation for quality, exceptional commercial skill, or technical 
 capacity. Similarly, it does nothing to deprive mills enjoying 
 a special convenience of site, the newest and best machinery, val¬ 
 uable patent rights or trade connections, of the exceptional profits 
 due to these advantages. The result is a steady elimination of 
 the inferior establishments, and a constant tendency for the whole 
 industry to be carried on under the most advantageous conditions. 
 This, of course, from the standpoint of the economist concerned 
 for the utmost possible productivity, is all to the good. 
 
 Thus, the probable effect of a Legal Minimum Wage on the 
 organization of industry, like its effect on the manual laborer and 
 the brain-working manager or entrepreneur, is all in the direction 
 of increasing efficiency. Its effect on the personal character of the 
 operative is in the right direction. It in no way abolishes compe¬ 
 tition, or lessens its intensity. What it does is perpetually to 
 stimulate the selection, for the nation’s business, of the most efficient 
 workmen, the best-equipped employers, and the most advantage¬ 
 ous forms of industry. It in no way deteriorates any of the factors 
 of production; on the contrary, its influence acts as a constant 
 incentive to the further improvement of the manual laborers, the 
 machinery, and the organizing ability used in industry. In short, 
 whether with regard to labor or capital, invention or organizing 
 ability, the mere existence of a Legal Minimum Wage in any industry 
 promotes alike the selection of the most efficient factors of produc¬ 
 tion, their progressive functional adaptation to a higher level, and 
 their combination in the most advanced type of industrial organ¬ 
 ization. And these results are permanent and cumulative. How¬ 
 ever slight may be the effect upon the character or physical efficiency 
 of the wage earner or the employer; however gradual may be the 
 
 13 
 
improvement in processes or in the organization of the industry, 
 these results endure and go on intensifying themselves, so that 
 the smallest step forward becomes, in time, an advance of the utmost 
 importance. I do not see how any instructed economist can doubt, 
 in the face of economic theory on the one hand, and of the ascer¬ 
 tained experience of Victoria and Great Britain on the other, that 
 the enactment and enforcement of a Legal Minimum Wage, like 
 that of an ordinary Factory Law, positively increases the 
 productivity of industry. 
 
 Now, at this point, I ought perhaps to deal with the bogey of 
 foreign competition, and the possible loss of our trade to rivals 
 who are free to make their industry less efficient than our own. 
 But as I cannot deal with everything in this short paper, I must 
 perforce omit the economics of international trade. But if the 
 result of a Legal Minimum Wage would be, as I have shown, to 
 make our industry steadily more efficient and more productive, 
 I need not waste time in demonstrating that this cannot put us at 
 any disadvantage in our competition with the foreigner. Nations 
 do not lose their trade because they become more efficient and more 
 productive; or because they are constantly reducing the amount of 
 labor and time—that is the social cost—of production. We are not 
 beaten by the incompetence and waste of our rivals, but by the 
 incompetence and waste that we ourselves display in our present 
 industrial organization. What, at any rate, is clear to the economist 
 is that a Legal Minimum Wage would have no more effect, and no 
 different an effect, on our international trade than the limitation 
 of the hours of labor and the enforcement of sanitary conditions 
 which our Factory Acts have imposed; and no educated person in 
 Great Britain to-day—certainly no one having the least pretensions 
 to economic knowledge—believes that our Factory Acts have been 
 otherwise than beneficial to our international trade, which we see 
 increasing by leaps and bounds. 
 
 I pass to a more interesting point. What would be the result 
 of a Legal Minimum Wage on the employer’s persistent desire to - 
 use boy labor, girl labor, married women’s labor, the labor of old 
 men, of the feeble-minded, of the decrepit and broken-down invalids 
 and all the other alternatives to the engagement of competent male 
 adult workers at a full Standard Rate? What would be the effect, 
 in short, upon the present employment, at wages far below a decent 
 level, of workers who at present cannot (or at any rate do not) 
 obtain a full subsistence wage? 
 
 14 
 
To put it shortly, all such labor is parasitic on other classes of 
 the community, and is at present employed in this way only because 
 it is parasitic. 
 
 When an employer, without imparting any adequate instruc¬ 
 tion in a skilled craft, gets his work done by boys and girls who live 
 with their parents and work practically for pocket money, he is 
 clearly receiving a subsidy or bounty, which gives his process an 
 economic advantage over those worked by fully paid labor. But 
 this is not all. Even if he pays the boys or girls a wage sufficient 
 to cover the cost of their food, clothing, and lodging so long as 
 they are in their teens, and dismisses them as soon as they become 
 adults, he is in the same case. For the cost of boys and girls to 
 the community includes not only their daily bread between thirteen 
 and twenty-one, but also their nurture from birth to the age of 
 beginning work, and their maintenance as adult citizens and parents. 
 If a trade is carried on entirely by the labor of boys and girls, and 
 is supplied with successive relays who are dismissed as soon as 
 as they become adults, the mere fact that the employers pay what 
 seems a subsistence wage to the young people does not prevent 
 the trade from being economically parasitic. The employer of 
 adult women is in the same case, where, as is usual, he pays them 
 a wage insufficient to keep them in full efficiency, irrespective of 
 what they receive from their parents, husbands, or lovers. In 
 all these instances the efficiency of the services rendered by the 
 young persons or women is being kept up out of the earnings of 
 some other class. These trades are therefore as clearly receiving a 
 subsidy as if the workers in them were being given a “rate in aid of 
 wages.” The employer of partially subsidized woman or child 
 labor gains actually a double advantage over the self-supporting 
 trades; he gets, without cost to himself, the extra energy due to 
 the extra food for which his wages do not pay, and he abstracts— 
 possibly from the workers at a rival process, or in a competing 
 industry—some of the income which might have increased the 
 energy put into the other trade. 
 
 But there is a far more vicious form of parasitism than this 
 partial maintenance by another class. The continued efficiency 
 of a nation’s industry obviously depends on the continuance of its 
 citizens in health and strength. For an industry to be economi¬ 
 cally self-supporting, it must, therefore, maintain its full establish¬ 
 ment of workers, unimpaired in numbers and vigor, with a sufficient 
 number of children to fill all vacancies caused by death or super- 
 
 15 
 
animation. If the employers in a particular trade are able to take 
 such advantage of the necessities of their workpeople as to hire 
 them for wages actually insufficient to provide enough food, cloth¬ 
 ing and shelter to maintain them permanently in average health; 
 if they are able to work them for hours so long as to deprive them of 
 adequate rest and recreation; or if they can subject them to con¬ 
 ditions so dangerous or. insanitary as positively to shorten their 
 lives, that trade is clearly obtaining a supply of labor force which 
 it does not pay for. If the workers thus used up were horses—as, 
 for instance, on the horse-cars of an old street railroad, or like those 
 that the English stagecoaches formerly “used up” in three 
 years’ galloping—the employers would have to provide, in addition 
 to the daily modicum of food, shelter, and rest, the whole cost of 
 breeding and training the successive relays necessary to keep up 
 their establishments. In the case of free human beings, who are 
 not purchased by the employer, this capital value of the new genera¬ 
 tion of workers is placed gratuitously at his disposal, on payment 
 merely of subsistence from day to day. Such parasitic trades are 
 not drawing any money subsidy from the incomes of other classes. 
 But in thus deteriorating the physique, intelligence, and character 
 of their operatives, they are drawing on the capital stock of the 
 nation. And even if the using up is not actually so rapid as to 
 prevent the “sweated” workers from producing a new generation 
 to replace them, the trade is none the less parasitic. In persistently 
 deteriorating the stock it employs it is subtly draining away the 
 vital energy of the community. It is taking from these workers, 
 week by week, more than its wages can restore to them. A whole 
 community might conceivably thus become parasitic on itself, 
 or, rather upon its future. If we imagine all the employers in all 
 the industries of the nation to be, in this sense, “sweating” their 
 labor, the entire nation would, generation by generation, steadily 
 degrade in character and industrial efficiency. And in human 
 society, as in the animal world, the lower type developed by para¬ 
 sitism, characterized as it is by the possession of smaller faculties 
 and fewer desires, does not necessarily tend to be eliminated by 
 free competition. The degenerate forms may, on the contrarjq 
 flourish in their degradation, and depart farther and farther from 
 the higher type. Evolution, in a word, if unchecked by man’s 
 selective power, may result in degeneration as well as in what we 
 choose to call progress. It is to prevent this result that every 
 civilized nation has been driven, by a whole century of experiment, 
 
 16 
 
to the adoption of stringent factory legislation as regards sanitation 
 and hours of labor. But water-closets and leisure do not, of them¬ 
 selves, maintain the nation’s workers in health and efficiency, or 
 prevent industrial parasitism. Just as it is against public policy 
 to allow an employer to engage a woman to work excessive hours or 
 under insanitary conditions, so it is equally against public policy 
 to permit him to engage her for wages insufficient to provide the 
 food and shelter without which she cannot continue in health. 
 Once we begin to prescribe the minimum conditions under which an 
 employer should be permitted to open a factory, there is no logical 
 distinction to be drawn between the several clauses of the wage- 
 contract. From the point of view of the employer, one way of 
 increasing his expenses is the same as another, while to the econo¬ 
 mist and the statesman, concerned with the permanent efficiency 
 of industry and the maintenance of national health, adequate food 
 is at least as important as reasonable hours or good drainage. To 
 be completely effectual the same policy will, therefore, have to 
 be applied to wages. Thus, to the economist, the enforcement of a 
 Legal Minimum Wage appears but as the latest of the long series 
 of Common Rules, which experience has proved to be (a) neces¬ 
 sary to prevent national degradation; and (6) positively advan¬ 
 tageous to industrial efficiency. 
 
 Does this mean that the enforcement of a Legal Minimum 
 Wage in any sweated industry will involve the destruction of that 
 industry? By no means. 
 
 When any particular way of carrying on an industry is favored 
 by a bounty or subsidy, this way will almost certainly be chosen, to 
 the exclusion of other methods of conducting the business. If the 
 subsidy is withdrawn, it often happens that the industry falls back 
 on another process, which, less immediately profitable to the 
 capitalists than the bounty-fed method, proves positively more 
 advantageous to the industry in the long run. This result, familiar 
 to the Free Trader, is even more probable when the bounty or sub¬ 
 sidy take the form, not of a protective tariff, an exemption from 
 taxation, or a direct money grant, but of the privilege of exacting 
 from the manual workers more labor-force than is replaced by the 
 wages and other conditions of employment. The existence of 
 Negro slavery in the Southern States of America made, while it 
 lasted, any other method of carrying on industry economically 
 impossible; but it was not really an economic advantage to cotton¬ 
 growing. The “white slavery” of the early factory system of 
 
 17 
 
Lancashire a century ago stood, so long as it was permitted, in the 
 way of any manufacturer adopting more humane conditions of 
 employment; but when these more humane conditions were forced 
 upon the Lancashire mill-owners, they were discovered to be more 
 profitable than those which unlimited freedom of competition had 
 dictated. The low wages to which, in the unregulated trades, the 
 stream of competitive pressure forces employers and operatives 
 alike, are not in themselves any more economically advantageous 
 to the industry than the long hours and the absence of sanitary 
 precautions were to the early cotton mills of Lancashire. To put 
 it plumply, if the employers paid more, the labor would be worth 
 more./fn so far as this proves to be the case, the legal minimum 
 wage would have raised the Standard of Life without loss of trade, 
 without cost to the employer, and without disadvantage to the 
 community! Moreover, the mere fact that employers are at present 
 paying lotm* wages than the proposed minimum is no proof that 
 the labor is not “worth” more to them and to the customers; for 
 the wages of the lowest grade of labor are fixed, not by the “worth,” 
 in any sense—not even the possible “value in exchange”—of the 
 individual laborer, but (as we must nowadays sadly concede) largely 
 by the urgent necessities of the “marginal” man, or, rather, the 
 “marginal” woman. It may well be that, rather than go without 
 the particular commodity produced, the community would will¬ 
 ingly pay much more for it, and yet consume as much or nearly 
 as much of it, as it now does. Nevertheless, so long as the wage 
 earner can be squeezed down to a subsistence wage, or, more cor¬ 
 rectly, a parasitic wage, the pressure of competition will compel 
 the employer so to squeeze him, whether the consumer desires it 
 or not. 
 
 The question then arises what effect the prohibition of para¬ 
 sitism would have on the individuals at present working in the 
 sweated trades. We need not dwell on the individual personal 
 hardships incidental to any shifting of industry or change of process. 
 Any deliberate improvement in the distribution of the nation’s 
 industry ought, out of regard for these hardships, to be brought 
 about gradually, and with equitable consideration of the persons 
 injuriously affected. But there is no need to assume that anything 
 like all those now receiving less than the Legal Minimum Wage 
 would be displaced by its enactment. 
 
 We see, in the first place, that the very leveling up of the stand¬ 
 ard conditions of sanitation, hours, and wages would, in some direc- 
 
 18 
 
tions, positively increase the demand for labor. The contraction 
 of the employment of boys and girls, brought about by the needful 
 raising of the age for full and half-time, respectively, would, in 
 itself, increase the number of situations to be filled by adults. The 
 enforcement of the normal day, by stopping the excessive hours 
 of labor now worked by the most necessitous operatives, and the 
 overtime resorted to whenever it suits the momentary convenience 
 of each particular employer—quite irrespective of whether the 
 community as a whole is in a hurry, or not—would automatically 
 absorb the best of the unemployed workers in their own and allied 
 occupations, and would create a new demand for learners. Finally, 
 the abandonment of that irregularity of employment which so 
 disastrously affects the New York outworkers and the London 
 dock-laborers, and indeed most other occupations, would result in the 
 enrolment of a new permanent staff. All these changes would 
 bring into regular work, at or above the Legal Minimum, whole 
 classes of operatives, selected from among those now only partially 
 or fitfully employed. Thus, all the most capable and best con¬ 
 ducted would certainly obtain regular situations. But this con¬ 
 centration of employment would, it must be admitted, imply the 
 total exclusion of others, who might, in the absence of regulation, 
 have “picked up” some sort of partial livelihood. In so far as the 
 persons thus rendered permanently unemployed consisted merely of 
 children removed from industrial work to the schoolroom, few 
 (and certainly no economist) would doubt that the change would 
 be wholly advantageous to national productivity and economic 
 efficiency. And there are many who would welcome a reorganiza¬ 
 tion of industry, which, by concentrating employment exclusively 
 among those in regular attendance, would tend automatically to 
 exclude from wage-labor, and to set free for domestic duties, an 
 ever-increasing proportion of the women having young children 
 to attend to. There would still remain to be considered the rem¬ 
 nant, who, notwithstanding the increased demand for adult male 
 labor and independent female labor, proved to be incapable of 
 earning the Legal Minimum in any capacity whatsoever. We 
 should, in fact, be brought face to face with the problem, not of 
 the unemployed but of the unemployable; those whom no employer 
 would employ at the Legal Minimum even if trade was booming 
 and he could get nobody else. 
 
 The unemployable, to put it bluntly, do not and cannot under 
 any circumstances earn their keep. What we have to do with 
 
 19 
 
them is to see that as few as possible of them are produced; that 
 such of them as can be cured are (almost at whatever cost) treated 
 so as promptly to remove their incapacity, and that the remnant 
 are provided for at the public expense, as wisely, humanely, and 
 inexpensively as possible. 
 
 I cannot here enter into the appropriate social regimen and 
 curative treatment best calculated to minimize the production of 
 the unemployable in each subdivision, and to expedite the recovery 
 of such as are produced. Such a regimen and such a treatment have 
 been elaborately expounded for the United Kingdom in the Minor¬ 
 ity Report of the Poor Law Commission, which is, in my judgment, 
 essentially applicable to the United States in much the same way as 
 to the United Kingdom. Once such unfortunate products of social 
 anarchy exist, these physical and moral weaklings and degenerates 
 must somehow be maintained, at the expense of other persons. 
 They may be provided for from their own property or savings, by 
 charity, or from public funds, with or without being set to work 
 in whatever ways are within their capacity. But, of all ways of 
 dealing with these unfortunate parasites, the most ruinous to the 
 community is to allow them unrestrainedly to compete as wage 
 earners for situations. For this at once prevents competition from 
 resulting in the selection of the most fit, and thus defeats its very 
 object. In the absence of any Common Rule, it will, as we have 
 seen, often “pay” an employer to select a physical or moral invalid, 
 who offers his services for a parasitic wage, rather than the most 
 efficient workman, who stands out for the conditions necessary 
 for the maintenance of his efficiency. In the same way a whole 
 industry may, if permitted, batten on parasitic labor, diverting 
 the nation’s capital and brains from more productive processes, and 
 undermining the position of its more capable artisans. And where 
 the industrial parasitism takes the form of irregular employment, 
 as, for instance, among the sweated outworkers or homeworkers 
 in all great cities, and the casual dock-laborers, its effect is actually 
 to extend the area of the disease. The consumers’ demand—which 
 governs the employers’ requirements—would suffice to keep* in 
 regular work, at something like adequate weekly earnings, a cer¬ 
 tain proportion of these casual workers. But because it is dis¬ 
 tributed, as partial employment and partial maintenance, among 
 the entire class, its insufficiency and irregularity demoralize all 
 alike, and render whole sections of the population of the great cities 
 of the twentieth century permanently incapable of regular con- 
 
 20 
 
duct and continuous work. Thus, the disease perpetuates itself, 
 and becomes by its very vastness incapable of being isolated and 
 properly treated. A dim appreciation of the evil effects of any 
 mixing of degenerates in daily life, joined, of course, with motives 
 of humanity, has caused the sick and the infirm, the imbeciles and 
 the lunatics, even the cripples and the epileptics, to be, in all civil¬ 
 ized communities, increasingly removed from the competitive 
 labor market, and scientifically dealt with according to their capaci¬ 
 ties and their needs. The “labor colonies” of Holland and Germany 
 are, from this point of view, an extension of the same policy. To 
 maintain our industrial invalids, even in idleness, from public funds, 
 involves a definite and known burden on the community. To 
 allow them to remain at large, in parasitic competition with those 
 who are whole, is to contaminate the labor market; and means a 
 disastrous lowering of the standard of life and standard of conduct, 
 not for them alone, but for the entire wage-earning class. 
 
 The economist has, therefore, to point out to the statesman that 
 the adoption of a Legal Minimum Wage would in no way increase 
 the amount of maintenance which has to be provided by the com¬ 
 munity, in one form or another, for persons incapable of producing 
 their own keep. It would, on the contrary, tend steadily to reduce 
 it, both by diminishing the number of weaklings or degenerates 
 annually produced, and by definitely marking out such as exist, 
 so that they may be isolated and properly treated. 
 
 There remains the question for the economist of the manner in 
 which a Legal Minimum Wage can be best determined and enforced. 
 The object being to secure the community against the evils of indus¬ 
 trial parasitism, the minimum wage for a man or a woman, respec¬ 
 tively ought theoretically to be determined by practical inquiry 
 as to the cost of the food, clothing, and shelter physiologically 
 necessary, according to national habit and custom, to prevent 
 bodily and mental deteriorations. Such a minimum would, there¬ 
 fore, be low, and though its establishment would be welcomed as 
 a boon by the unskilled workers in the unregulated trades, it would 
 not at all correspond with the conception of a “living wage” formed 
 by the cotton operatives or the coal miners. Practically, in all 
 but the lowest paid trades, chiefly for women workers, it must in 
 practice be left to the wage earners to settle the Standard Rate 
 and other conditions of employment, by Collective Bargaining. 
 
 This does not exclude—and experience shows, indeed, that it 
 may lead up to—the ultimate fixing of a Minimum by a Joint Board 
 
 21 
 
representing the employers and operatives of the whole trade; 
 and (as now in a hundred different trades in Victoria) the giving 
 of statutory authority to the Minimum so determined, which is 
 then enforced as part of the Factory Law. What happens, in 
 effect, is that the rates or conditions current in the best establish¬ 
 ments are, at the outset, taken as the standard, and made appli¬ 
 cable, with any necessary adjustments, to all establishments. From 
 this basis, advances and reductions (though there are seldom reduc¬ 
 tions) are reckoned, claimed, and argued for in the usual way. 
 
 To those not practically acquainted with the organization of 
 industry and Government administration in countries of advanced 
 development (and I fear that many economists are in this position, 
 in the United States as in Europe) the idea of a compulsorily enforced 
 Minimum Wage may seem impracticable./ Of course, there will 
 still be people up and down the country who will go on saying that 
 that it is “impossible”—while it is in actual operation, not only 
 in Australia and New Zealand and the United Kingdom, but under 
 their own eyes! As a matter of fact, the authoritative settlement 
 of a minimum wage is already undertaken daily. Every munici¬ 
 pal authority throughout the country has to decide, under the 
 criticism of public opinion, what wage it will pay to its lowest grade 
 of laborers. It can hire them at any price, even at twenty-five 
 cents a day; but it must be rare that any such genuinely “com¬ 
 petitive” wage is paid. What happens in practice is that the officer 
 in charge fixes such a wage as he believes he can permanently get 
 good enough work for. In the same way, the National Govern¬ 
 ment of the United Kingdom, which is by far the largest employer 
 of labor in the country, does not take the cheapest laborers it can 
 get, at the lowest price at which they will offer themselves, but 
 deliberately settles its own minimum wage for each department. 
 During the last few years this systematic determination of the rate 
 to be paid for Government labor, which must have existed from the 
 days of Pepys, has been more and more consciously based upon 
 what we have called the doctrine of a living wage. Thus, the 
 Admiralty is now constantly taking evidence, either through the 
 Labor Department or through its own officials, as to the cost of 
 living in different localities, so as to adjust its laborers’ wages to 
 the expense of their subsistence. The General Post-Office has just 
 been doing the same thing on a very elaborate scale. And in our 
 English local governing bodies, which employ, in the aggregate, 
 more operatives than almost any single industry, we see the com- 
 
 22 
 
mittees, under the pressure of public opinion, every day substi¬ 
 tuting a deliberately settled minimum for the haphazard decisions 
 of the officials of the several departments. What is not so generally 
 recognized is that exactly the same change is taking place in private 
 enterprise. The great captains of industry, interested in the per- 
 mament efficiency of their establishments, have long adopted the 
 practice of deliberately fixing the minimum wage to be paid to the 
 lowest class of unskilled laborers, according to their own view of 
 what the laborers can live on, instead of letting out their work to 
 subcontractors, whose only object is to exact the utmost exertion 
 for the lowest price. A railroad never dreams of putting its situa¬ 
 tions up to tender, and engaging the man who offers to come at the 
 lowest wage; what happens is that the rate of pay of trainmen 
 and roadmen is deliberately fixed in advance. And, so far as the 
 United Kingdom is concerned, it is a marked feature of the last 
 ten years that the settlement of this minimum has been, in some of 
 the greatest industries, taken out of the hands of the individual 
 employer, and arrived at by a Joint Board, or even by an arbitrator. 
 The assumption that the wages of the lowest grade of labor must, 
 at any rate, be enough to maintain the laborer in industrial efficiency 
 is, in fact, accepted by all parties, so that the task of the arbitrator 
 in such a case is comparatively easy. Lord James of Hereford, 
 for instance, a few years ago, fixed, with universal acceptance, a 
 minimum wage for all the lowlier grades of labor employed by the 
 North Eastern Railway Company. Indeed, the fixing of a minimum 
 wage on physiological grounds is a less complicated matter., and one 
 demanding less technological knowledge, than the fixing of a mini¬ 
 mum of sanitation, which is done in every Factory Law; and it 
 interferes far less with the day-by-day management of industry 
 or its productivity, than any fixing of the maximum hours of labor, 
 whether of men or women, to which, wherever excessive hours 
 prevail, the European economist is now converted. To put it con¬ 
 cretely, if the president of any great textile corporation could for 
 a moment rid himself of a sort of metaphysical horror of any legal 
 regulation of wages, he would admit that the elaborate Factory 
 Law requirements in the way of sanitation and safety, and any 
 limitation in the hours of labor, constituted a far greater impedi¬ 
 ment to the management of his “own business,” in the way he 
 thinks best, than would any legal Minimum of Wages for the low¬ 
 est grades of labor. As a matter of fact, what would happen would 
 be the adoption, as the Legal Minimum, of the wage actually paid 
 
 23 
 
by the better establishments, who would be affected only to the 
 extent of finding their competitors put on the same level as 
 jEemselves. 
 
 On all counts, therefore, the modern economist must conclude 
 that the enforcement, throughout each particular trade, of a Legal 
 ^Minimum of Wages would, like the analogous enforcement of Com- 
 ►mon Rules as to hours and sanitation by the Factory Law, be 
 calculated to have good, and not bad, economic results on the 
 .community as a whole. 
 
 The urgently needed step to which the recent developments 
 in the industrial world point, is, to my mind, a wise and prudent 
 use of Legal Regulation of the Conditions of Employment. To the 
 public (and for the moment perhaps also to the employer) this is 
 summed up in the Legal Minimum Wage; and great are still the 
 apprehensions aroused thereby. Yet all that Factory Legislation 
 prescribes, and all that a Minimum Wage Law enacts, is that, while 
 employers and workmen are left quite free to work or not, as they 
 choose, and quite free to bargain for what terms they will, the law 
 prescribes that there shall be a minimum, to be fixed, under public 
 control, by representative bodies for the several trades, below which, 
 so long as he is employed at all and properly diligent in his work, 
 the workman’s subsistence shall not descend. This is, after all, 
 only one additional example of the century-old Factory Legis¬ 
 lation. We have, in fact, for a whole century been prescribing 
 by law the Minimum Conditions of the Wage-Contract, with regard 
 to one item after another; and thus regulating, in the public inter¬ 
 est, by a hundred successive statutes, the conditions under which 
 industry shall be carried on. And everybody admits this legis¬ 
 lation to have been eminently successful in its results. Not even 
 the most reactionary member of any Legislature throughout the 
 civilized world ever offers a Bill for its repeal. And the scope of 
 the legislation has steadily broadened. For a long time Factory 
 Laws confined themselves in the main to the enactment of a Legal 
 Minimum of Sanitation and Safety in the workshop and the mine; 
 insisting, for instance, that, whether or not profits were being 
 realized, employers should provide healthful workplaces, properly 
 warmed and ventilated, free from noxious effluvia, sufficiently 
 protected against accidents, and adequately equipped with sanitary 
 conveniences. From that, the code of every civilized nation has 
 gone on to prescribe for all boys and girls a Legal Minimum of 
 Education, requiring parents and employers to forego the help in 
 
 24 
 
industry of children below a certain age, insisting that such children 
 should be in attendance at school, and gradually enlarging the 
 sphere of the education authority so as to ensure that no child 
 remains below the prescribed National Minimum of Nurture in any 
 respect whatever. Meanwhile this Labor Code has been laying 
 down also a Legal Minimum of Leisure and Rest, by prescribing 
 a maximum working day; insisting on proper intervals for meal¬ 
 times and holidays, limiting overtime, etc. All these successive 
 interferences with the employer’s “right” to “manage his business 
 in his own way” were resisted in one country after another, by 
 economists as well as by “business men,” on the ground that they 
 involved additional expense, and thereby increased the cost of pro¬ 
 duction, just as much as if the rate of wages had been arbitrarily 
 raised; and that they thus in turn made it impossible for the most 
 hardly pressed business to be carried on. That they amounted 
 virtually to a confiscation of property was repeatedly asserted. It 
 was, as an eminent Conservative Minister declared in the British 
 House of Commons, “Jack Cade Legislation,” which robbed the 
 capitalist of some of his income for the assumed benefit of his work¬ 
 people. It was according nothing more in the way of Jack Cade 
 Legislation than that to which the world had long grown accus¬ 
 tomed, when the Legislature of Victoria, in 1896, added to the 
 various minima already required by its Factory Code, a Legal 
 Minimum Wage. This was adopted for the United Kingdom, so 
 far as regards four selected trades, in the Trade Boards Act of 1909; 
 and it is significant that the Legal Minimum Wage was then carried, 
 both in the House of Commons and in the House of Lords, with 
 scarcely a dissentient voice. Three years afterward the same thing 
 was done for the coal trade, though by a law so incompetently or 
 so disingenuously drafted as to be far inferior to the Trade Boards 
 Act. It is true that, for a long time, each successive Factory Act 
 and Mines Regulation Act was looked upon as an exceptional out¬ 
 come of our special pity for the sufferings of some particularly weak 
 and ill-treated class of wage earners—at first the parish apprentices; 
 then the children and young persons deprived of their playtime; 
 then the women bound all day to the steam-driven loom, amid 
 the noise and heat and dust of the mill; then the poor miners 
 imprisoned in the bowels of the earth; then the down-trodden 
 shop assistant, and so on. But though the sentimental public 
 and the merely empirical legislator still takes this view, every econo¬ 
 mist, and indeed every educated statesman, knows that we have 
 
 25 
 
long since passed beyond that point. It is now seen that, in carry¬ 
 ing his successive Factory Acts, for one class after another, laying 
 down a Legal Minimum for one condition after another of the wage- 
 contract, Lord Shaftesbury, like the Trade Unionists whom he 
 feared, was “building better than he knew.” What was at first 
 empirical has become scientific. “And so the Factory Acts,” to 
 use the words of the late Duke of Argyll, uttered as long ago as 
 1867, “instead of being excused as exceptional, and pleaded for as 
 justified only under extraordinary conditions, ought to be recog¬ 
 nized as in truth the first legislative recognition of a great Natural 
 Law .... destined to claim for itself wider and wider 
 application.” 
 
 What the Duke of Argyll predicted nearly half a century ago 
 can now be seen to be imminent. We may expect to find all the 
 conditions of employment—wages not excluded—one by one author¬ 
 itatively upheld by definite Legal Minima, not in this or that trade 
 only, but in every industry; not in this or that country alone, but 
 gradually throughout the civilized world. 
 
 University of London 
 
 Sidney Webb 
 

 
 
2 061962244 
 
 NATIONAL CONSUMERS' LEAGUE 
 
 106 East 19th Street, New York City 
 OiFIC^RS 
 
 President, Mr. John Graham Brooks, Cambridge, Mass. 
 Vice-Presidents, Mrs. Frederick Nathan, New York City 
 Miss Jane Addams, Chicago, Ill. 
 
 Mrs. M. R. Trumbull, Portland, Ore. 
 
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 Mrs. B. C. Gudden, Oshkosh, Wis. 
 
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