The Importance of Wage Growth at the Bottom — Not a New Concern

Winston Churchill MP, putting the argument for the The Trade Boards Act 1909, a piece of social legislation passed in the United Kingdom in 1909. It provided for the creation of boards which could set minimum wage criteria that were legally enforceable.

“It is a serious national evil that any class of His Majesty’s subjects should receive less than a living wage in return for their utmost exertions. It was formerly supposed that the working of the laws of supply and demand would naturally regulate or eliminate that evil. The first clear division which we make on the question to-day is between healthy and unhealthy conditions of bargaining. That is the first broad division which we make in the general statement that the laws of supply and demand will ultimately produce a fair price. Where in the great staple trades in the country you have a powerful organisation on both sides, where you have responsible leaders able to bind their constituents to their decision, where that organisation is conjoint with an automatic scale of wages or arrangements for avoiding a deadlock by means of arbitration, there you have a healthy bargaining which increases the competitive power of the industry, enforces a progressive standard of life and the productive scale, and continually weaves capital and labour more closely together. But where you have what we call sweated trades, you have no organisation, no parity of bargaining, the good employer is undercut by the bad, and the bad employer is undercut by the worst; the worker, whose whole livelihood depends upon the industry, is undersold by the worker who only takes the trade up as a second string, his feebleness and ignorance generally renders the worker an easy prey to the tyranny; of the masters and middle-men, only a step higher up the ladder than the worker, and held in the same relentless grip of forces — where those conditions prevail you have not a condition of progress, but a condition of progressive degeneration.

Seems rather pertinent over a hundred years later too…

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