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.