WAGES NOT UNIFORM — NON-COMPETING GROUPS 47 
of labor, Germany has a comparative disadvantage in producing 
wheat. But this is offset, so far as the supply price of wheat is 
concerned, by the specially lower wages. In the market it is all 
one whether there be higher effectiveness of labor or lower rate of 
wages. Wheat would sell at a lower price ($0.663) if the labor 
were as effective as German labor is in linen; it sells at that same 
lower price if the labor is obtainable at the lower rate of pay. 
International trade, to repeat, is governed proximately by prices; 
and the ruling prices, under this supposition of a non-competing 
group, are such that wheat is not sent from the United States to 
Germany even tho the United States has unmistakably a com- 
parative advantage for producing it. 
Now make a further supposition. Suppose that not only in 
Germany, but in the United States as well, the wheat laborers are 
in a low-lying group; that these Americans, like their German 
fellows, receive lower wages than obtain in other occupations, and 
therefore lower wages than the linen workers. Suppose that while 
wages In the United States are in general $1.50 a day, the wheat 
workers get no more than $1.00 a day. The German wheat 
workers, in their turn, receive only $0.66% a day, as against a ruling 
German rate of $1.00 a day. Then our figures must be modified 
as follows: 
In the U. S. 10 days’ labor 
» ” TU, S. 10 » » 
” Germany 10 ” P 
” Germany 10 ” 1H 
WAGES 
PER DAY 
NY 
1.50) 
20.66% 
21.00 
ToraL 
WAGES 
10) 
6.¢ 
Domestic 
PRODUCE  QuppLy Price 
20 wheat 
20 linen 
10 wheat 
15 linen 
$0.50 
$0.75 
$0.663 
30.66% 
Prices are now such that commodities move both ways. The 
American supply price of wheat ($0.50) is now lower than the 
German supply price (30.662). Similarly German linen at $0.662 
is lower in supply price than American linen (80.75). Trade 
between the two countries takes place as it would if the differences 
in wages within each of them did not exist — as if there were 
uniformity of wages in each and no non-competing groups at all. 
The general conclusion thus indicated is that the existence of 
non-competing groups within a country affects international trade