Full text: Economic essays

32 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK 
wages directly by such an artificial decree or rule brings such a 
number of evils in its train as to require greater and greater 
effort on the part of laborers and of governments for their 
elimination. 
These evils are very noticeable in those old countries that are 
relying upon such artificial measures as union rules and govern- 
ment decrees for raising wages. They are obscured in countries, 
such as the United States, where other and more constructive 
measures are taken first to change the equilibrium, and then to 
wait for economic forces to bring about higher wage levels semi- 
automatically. These constructive measures are of such perma- 
nent importance to the student of economics, and they are so 
difficult for the non-theoretical mind to understand, as to require 
some rather elaborate theoretical analysis and elucidation. 
If, instead of trying to raise wages directly and artificially, the 
equilibrium wage is frankly regarded as a result rather than 
a cause of the equilibrium of demand and supply, and attention 
is turned to the general causal factors in the equilibrium, a 
different policy will be dictated by the logic of the situation. If 
some of these factors can be changed so as to disturb the 
equilibrium in the right direction, then, without further effort, 
wages automatically rise, and such a rise in wages does not 
bring in its train such a list of evils as invariably follow from 
any attempt to raise wages directly. 
It is, however, possible that some of the difficulties which follow 
the attempt to raise wages directly may either cure themselves or 
set in motion new forces that will effect a cure. For example, if 
wages in a given occupation or group of occupations are forced 
appreciably above the equilibrium level, it will undoubtedly create 
unemployment. This unemployment, however, may cure itself 
in one of several ways. First, the surplus laborers may emigrate 
either voluntarily or involuntarily through deportation. If they 
emigrate in sufficient numbers, the new wage rate, which was at 
first definitely above the equilibrium level, will soon become the 
true equilibrium wage. That is, the thinning out of laborers 
through emigration or wholesale deportation may proceed until 
the new wage level is only sufficient to induce as many to offer 
themselves for hire as employers are willing to hire. It is impor- 
tant to note, however, that it is a real cure only on condition that 
the new wage level shall actually become an equilibrium level.
	        
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