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Assume, for illustration, that we are dealing with the measurements of the stature of a large number of men. Let all the different degrees of stature be represented by successive points on the line AA2, (Fig. 1), so B1

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that the least height will be at A and the greatest at A2. Then let vertical distances measured upward from these points represent the relative number of men found to be of each of these different degrees of stature. Thus the relative number of men of height P is represented by the length of the line PG, while the line QH represents the relative number of men of stature Q. The curve AA1A2, which connects the tops of all these imaginary vertical lines, represents the distribution according to stature of all the men measured. Two important characteristics of this curve will be noted: first, the most commonly found stature is the medium or average stature, while extremely tall or extremely short men are the least frequent; second, the curve is symmetrical; that is, as many men are found to be 20 per cent shorter than the average as are found to be 20 per cent taller than the average. The curve BB1B2 is precisely the same sort of curve, and it represents the measurements of just as many men (for its area is the same as that of the curve AÂ1Â1⁄2), but it is constructed on the assumption that stature is only half as variable as is assumed in the curve AA142. This assumption would mean that men were, with respect to stature, concentrated more closely around the average than is indicated by the first curve. Not only with respect to physical measurements of various kinds (such as of cranial capacity, or of the ratio of length of the head to its breadth), but also with respect to measurements of many specific kinds of mental efficiency 1 men are found to be distributed with "normal frequency." It follows that the most probable kind of distribution of men with respect to the complex of physical, mental, and moral qualities, included under the general term "efficiency," is something closely approximating this normal type. If the curve AA1A2

1 Cf. E. L. Thorndike, Mental and Social Measurements, especially page 59.

represents the distribution of men according to their efficiency, we may assume that those represented by the part of the area to the left of a certain line (HQ, for example) are those who are below the level of social utilization, including the physically and mentally defective and the morally delinquent classes. Similarly, those represented by the area to the right of the line IR would include the most efficient members of the population, the individuals of exceptional ability. When one speaks of "commonplace mediocrity" he has in mind its relatively greater frequency.

Figure 2 is based upon a table which shows the weekly wages received in 1900 by 160,000 employees in 30 industries, including textile mills, wood

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2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50
WEEKLY WAGES IN DOLLARS
FIG. 2

working, metal working, and miscellaneous industries. In this diagram the horizontal line represents the various weekly wages received (greater than two dollars and less than fifty dollars a week) classified in two-dollar groups. The vertical distances represent in each case the proportion of the total number of employees who received the wage specified. Thus the diagram shows that over 23 per cent of the employees were paid between eight and ten dollars a week, and that over 5 per cent received between eighteen and twenty dollars per week. If wages varied exactly according to efficiency, we would expect that this diagram would follow the general pattern of the normal frequency curve shown in Figure 1. There are, however, some noticeable differences. The median wage (the wage which divides the whole number of employees into two halves, one half receiving more and one half receiving less than the median wage), which is in this case about $10.50, was not located at the point of greatest frequency,

1 The statistics were gathered by the United States Census Office and printed in the special report of the Twelfth Census on Employees and Wages. The tabulation on which the diagram is based is taken from an article on "The Variability of Wages," by Professor H. L. Moore, in the Political Science Quarterly, Vol. XXII, p. 67. See also an article by Professor Moore on "The Efficiency Theory of Wages," Economic Journal, Vol. XVII, p. 571.

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as is true of the normal frequency curve, but somewhat above it. average wages (the quotient obtained by dividing the total amount paid in wages by the number of employees) was still higher, amounting to about $11.50. The diagram is not symmetrical, but shows a concentration of employees in the lower wage groups, and a relatively greater variation or dispersion" in the case of those receiving higher wages. This suggests that either differences in wages are not so great in the lower wage groups as differences in efficiency, or that differences in wages in the higher wage groups are greater than differences in efficiency. In general, differences in wages seem to increase more rapidly than differences in efficiency as the scale of efficiency ascends. If wages are paid for the productivity of the individual workman, and if productivity varies with efficiency, what is the explanation of this difference between the distribution of efficiency and the distribution of wages?

First, it should be noted that the normal frequency curve only applies to so-called "natural" efficiency, made up of inherited qualities. Actual productive efficiency is a product not only of natural efficiency, but also of training, and this acquired element of specialized skill is more important in the case of the better workmen than in the case of the less efficient. In the second place, higher-paid workmen are in better-organized trades, and gain more than do the others from the advantages of collective bargaining. In the third place, when we speak of the productivity of a laborer as a fundamental thing determining his wages, we have in mind the amount of product imputed to the laborer the amount by which the total product would be decreased if his labor were not utilized. This amount depends not only upon the efficiency, natural and acquired, of the laborer, but also (on account of the law of diminishing productivity) upon the extent to which the employer finds it profitable to utilize labor rather than capital or land. This, on account of the fact that the sale of labor is analogous to a "forced sale," is apt to be determined largely by the supply of labor in each employment. So far as the supply of labor in the better-paid trades is restricted through the limitation of apprenticeship, or through other means, the marginal productivity of labor in other employments is (since the restriction of the supply of labor in any one employment necessitates a corresponding increase of the supply in some other employments) relatively decreased. These three considerations account, at least partially, for the difference between the distribution of wages and the probable distribution of natural efficiency.

QUESTIONS AND EXERCISES

1. How far are wages determined by the productivity of labor? In what different ways do wages affect the productivity of labor? What meaning, or meanings, do you attach to the word "productivity" in the foregoing questions?

2. Why are the wages of men higher than the wages of women in the same employments?

3. Make a short outline, or table, of the factors determining the supply and demand of labor.

4. Are wages paid as a reward for the irksomeness of labor? Are they paid on account of the scarcity of labor?

5. Some economists have held that "a demand for commodities is not a demand for labor." Discuss this statement.

REFERENCES

CARVER, T. N. The Distribution of Wealth, Chap. IV.

CLARK, J. B. The Distribution of Wealth, Chaps. VII and VIII.

DAVIDSON, JOHN. The Bargain Theory of Wages.

FETTER, F. A. Principles of Economics, Chaps. XX-XXVI.

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MARSHALL, ALFRED, Principles of Economics, 4th. ed., Book VI, Chaps. I-V. TAUSSIG, F. W. Wages and Capital.

THOMPSON, H. M. The Theory of Wages.

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WHATEVER may be the economic law in accordance with which wages are fixed, it must be vitalized or expressed by the conscious efforts of human agents. For instance, it is frequently said that the price of labor is determined by the law of demand and supply. This may be true, but the law of demand and supply is animated by no mystical or occult force; it must be enforced by active, intelligent men, keen enough to know their own interest, and bent upon pursuing it. Men must take advantage of the economic forces working to their advantage, or they will lose their advantage. Types of Labor Organizations. One of the most important agents now occupied in giving effect to the economic laws which control wages is the labor organization. There are at least three distinct types of labor organizations: the Trade Union, representing a combination of wage earners in a single trade or two or three closely related trades; the Industrial Union, composed of all kinds of wage earners working in a given industry; and the mixed Labor Union, made up of wage earners from many trades and many industries. Thus, the Brotherhood of Locomotive Engineers, a strict trades union, makes no attempt to include other workers in the railway service; the United Mine Workers, however, an industrial union, attempts to combine all persons working in and around the mines; while the Knights of Labor, in the period of its strength and prosperity, fused all sorts and conditions of workers in some of its district assemblies, and combined these assemblies in a closely knit, highly centralized national organization.

The difference in the structure of labor organizations colors their policies and gives rise to important problems. The trade and in

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