124 SECTIONAL ADDRESSES. 



workpeople, if it is not covered by a corresponding increase in the 

 efficiency of the industry in which they are engaged, must be at the 

 expense of someone else. The increased efficiency may be due to the 

 workpeople or to the employers ; but, if neither of them create a fund 

 from which increased wages can be paid, the increase will be paid either 

 by consumers or by the co-operating industries that help them to supply 

 the consumers. If the increase is merely sufficient to keep pace with 

 an advance in the average level of wages, it may represent no more than 

 the industry's proportionate share in the general increase of wealth ; if, 

 however, it is greater than the average, or in times of wage-reductions, 

 the reduction is less than the average, it must involve the diversion to 

 the favoured industry of a larger share of society's income. 



Such a diversion may be effected without overt restriction of numbers. 

 If a union — or a Trade Board or Arbitration Authority — fix wage-rates 

 in an industry at a level which makes it impossible for the industry to 

 employ all the workpeople seeking work, and maintain rates at that level, 

 it will immediately restrict employment, and ultimately may so dis- 

 courage entry to the industry, that the number of workpeople dependent 

 on the industry is no greater than can be employed at the rates set. 

 The demand for the products of industry, and therefore for labour, ebbs 

 and flows with general fluctuations in trade ; a strong union can main- 

 tain rates when demand ebbs and advance them when demand rises, 

 thus preventing both a fall in rates proportionate to the general decline 

 in money incomes in the depression, and an expansion in numbers pro- 

 portionate to the general increase in production when trade improves. 

 On the other hand, an unorganised industry may suffer a reduction of 

 rates when trade declines and an expansion of numbers, on the low level 

 of wages so established, when trade improves. 



The mere regulation of wage-rates may, therefore, be restrictive in 

 its effects. Such restriction may be legitimate and socially desirable ; 

 but it destroys any sharp distinction and opposition between a policy of 

 restriction of numbers and a policy of imposing common rules of payment 

 and conditions. It makes no difference, for example, to a coloured worker 

 in countries of mixed nationality, whether he is excluded from certain 

 occupations by a legal colour-bar, or by a legal minimum rate so high that 

 no employer would think of paying it to a coloured worker ; it makes no 

 difierence to an unemployed building labourer, whether the expansion 

 of the building industry, to a point at which he would be absorbed, is 

 prevented by apprenticeship regulations, making it impossible for building 

 employers to get enough skilled men, or by the establishment of skilled 

 rates, that raise the cost of building and restrict the demand for houses. 

 It is not even clear that the reactions upon efficiency of the two policies 

 are necessarily difierent. If the supply of a certain class of labour is 

 restricted, employers will be stimulated to devise labour-saving apphances 

 to substitute for it, or some reorganisation to dispense with it, just as 

 certainly as if the supply is unrestricted but expensive. One generation 

 of architects devised ways of using brickwork in pilasters, cornices, string 

 courses, and around openings, because stone-masons made themselves 

 scarce and expensive, a later generation used concrete to replace brick- 

 work, because bricklayers had become scarce and expensive ; the develop- 



