The general rate of wages, in any given class, group or industry, is determined by the standard of living of the most expensive families furnishing the necessary part of the supply of labor in that country, class, group or industry.
Other things being the same, the cost of his living will be determined by the number of his habitual wants. Thus, the cost of producing labor is ultimately determined by the socially-accepted standard of living; that is to say, the state of material comfort and social refinement which is customary in, and therefore demanded by, the social status of the class to which one belongs, and below which he cannot permanently go without being put to social disadvantage. Again, the standard of living as here stated does not mean that of the individual merely, but of his family. Nor does this mean that the wages of the workers in each family are determined by the cost of living of that particular family, but it means that the general rate of wages, in any given class, group or industry, is determined by the standard of living of the most expensive families furnishing the necessary part of the supply of labor in that country, class, group or industry. The reason for this is very clear. The laborer will not work for less than what will furnish him a living. He will, as experience shows, often work for less than will supply him with exceptional comforts and luxuries, but he will not continuously work for less than will furnish him that which, by constant repetition and force of habit, have become necessities. Rather than forego these he will refuse to work, will inaugurate strikes, tots, and other means to endanger the peace and prosperity of the community. If $2 per day is the minimum amount upon which a certain portion of a given class of laborers can or will consent peaceably to live, then that amount must be paid them in order to obtain their labor; what the. most expensive portion must receive the remainder therefore may and will receive. In other words, the minimum amount that the most expensive laborers will consent to accept, determines the maximum amount any portion of the class can obtain, and therefore fixes the general rate of wages in their class. The reason for this is equally clear. In modern industry; with the concentration of capital and the use of factory methods and the division and aggregation of labor, it becomes economically impossible to pay different rates of wages to different individuals for the same kind and quantity of work, especially where piece-work prevails, which is increasing as the factory methods extend. Consequently, we find that the general rate of wages in the same industry and locality is nearly uniform. We know, for instance, that weavers, spinners, shoemakers, carpenters, bricklayers, painters, etc., in the same shop or factory, or on the same job, get the same rate of pay for work at their respective trades, whether they are single or married, have large or small families, or live more or less expensively than their fellow-laborers. We also know that the most expensive among them must obtain for his service sufficient to supply his family with what to them (as a class) are necessities. What will be sufficient to supply the urgent necessities of the most expensive portion of any class of laborers, and barely induce them to continue to work, will furnish all those whose cost of living is less with a margin proportionate to the difference, which may be spent in what to them are luxuries, dress, amusement, travel, literature, etc.
This explains why we always find those whose families are the largest, or those who have more cultivated tastes and wants, and therefore a higher cost of living than the bulk of their class, are constantly chafing under the pressure of their unsatisfied demands. This pressure increases in severity in proportion as the standard of living rises above that of the lowest. Consequently, we find in every class of laborers a portion who are in almost perpetual rebellion against the smallness of their wages, while the single men, and those whose families are smaller, or who maintain a lower standard of living, can either save money or use it in dissipation. Indeed, it is a law throughout society which all history demonstrates that every step in progress, social, political, moral, or religious, has always been obtained through the energies of a small portion, seldom 20 per cent, of the class or country who received the advantages. This affords the explanation of what has hitherto been an economic enigma, namely, why the members of the trades unions, and the leaders in strikes, and other forms of agitation for the advance of wages and industrial reforms, are always the most intelligent and best-paid laborers. Why the six-cent-a-day laborers in Asia do not strike half as frequently as do the two or three-dollar-a-day laborers in America, and why in all strikes there is a large proportion of the laborers who are reluctant to leave their work and always anxious to return. The reason is that this portion of the class do not feel the pressure or necessity for an increase because their wages are determined by the twenty per cent. of their class whose standard of living is more expensive than their own. This law also explains the reason why European and Asiatic laborers can come to this country and accumulate wealth (or dissipate) upon wages which will barely supply the laborer's family in America with the necessaries of life. Tue fact that the foreigner can save money while the American laborer can hardly make two ends meet, is frequently cited as the evidence of the superior character of the foreign laborer. But if this be true why did they not give evidence of this superiority by saving money iii their own country? We may be told that it is because the general rate of wages there was so low that no margin was left above what would give them a bare living; but this only raises the next question: Why is there no margin in their own country?
Why is there no margin for the best class of Chinamen in China, of Germans in Germany, Englishmen in England, and Americans in America, while there is a margin in almost every country in Continental Europe for the Asiatic, a margin in England for both the Asiatic and Continental laborer, and a margin in the United States for the laborers of every other country, but no margin for the American laborer in any country in the world. The answer is very clear. There is no margin upon which the best class of laborers can save in their own country, simply because there the general rate of wages is determined by their own standard of living. They can get wages which will leave them a margin over the cost of living, only by going where the price of labor is determined by the social character and standard of living higher than their own, or, if in their own country, by adopting a standard of living lower than that of the highest of the class to which they belong. Why the foreign laborer who can hardly procure a living at home, can accumulate here, while the American laborer can only obtain sufficient to satisfy his normal social needs, is for the first time explained by the operation of this economic law. And should the standard of the American laborer ever be reduced to the level of that of the European or Asiatic, then it would be as impossible for the foreign laborer to save money here as in his native country, and for the same reason.
It will thus be seen that the rate of wages is not kept up and promoted by the influence of those whose standard of living is below the average, but by the constant pressure of the unsatisfied desires of those whose standard of living is the highest in their classes. Thus it is, that in accordance with the same principle that production is finally determined by consumption, the laborer's income, under wage-conditions, is governed by his expenditures. In other words, the standard of living is the economic law of wages.