178 INDUSTRIAL REVOLUTION AND WAGES 
Very obvious changes in prices induced organized labor to 
realize the necessity for calculating in real wages. Very ob- 
vious changes in productivity of labor to-day induce organ- 
ized labor again to widen its wage policy. 
Higher money wages from an economic point of view do 
not improve the situation of the worker if prices increase 
more than money wages. 
Higher real wages from a social point of view do not im- 
prove the situation of the worker if productivity increases 
more than real wages. 
For, higher productivity without corresponding increase of 
real wages means that the additional product has to be 
bought by others than the wage earner. This means that the 
social position of the wage earner in relation to other con- 
sumers becomes worse, because his standard of living will not 
advance proportionately with those of other groups. 
Deteriorating social position—that is, declining purchasing 
power of the mass of the wage-earners in relation to the na- 
tional product—brings about industrial instability which will 
develop into industrial crisis. 
The American Federation of Labor is the first organization 
of Labor in the world to realize the importance of the factor 
productivity in economic society. It no longer strives merely 
for higher real wages; it strives for higher social wages, for 
wages which increase as measured by prices and productivity. 
This modern wage policy lifts the movement to an abso- 
lutely new level. For higher real wages meant only: better- 
ment of the economic position—while higher social wages 
mean: betterment of the economic and social position of the 
worker. The modern wage policy guarantees an active but 
stable development of industrial society. 
President Green’s declaration as to “social wages” was 
later more elaborately explained by a series of articles in 
The American Federationist by members of the staff of the 
Research Department of the American Federation of 
1 “Organized Labor's Modern Wage Policy,” Research Series No. 1. 
American Federation of Labor, Washington, 1927.