Skimming through a book on the Gilded Age and Progressive Era, I got to thinking how powerful the notion of “low wages” during the late eighteenth century is among academics, and, in fact, laymen. Of course, we all know that real wages were rising rapidly during this period, but the problem in explaining this to the unitiated is that it doesn’t correspond with their conception of history. The fact of the matter is that people were complaining about low wages despite whatever increases in living standards were taking place, so explanations by libertarians that their concerns were unwarranted are easily dismissed by people on the left (and right, for that matter).
However, I thought about this for a moment and then something hit me, and I wanted to run this by the board, in case I’m missing something. It occurs to me that in a free market we should always expect a degree of antagonism between capital and labor over wages, otherwise the market is not really working. Sellers of a good or service are always going to want more, and buyers will always try to get away with less. This is how the market works, and in this sense, we might find it peculiar if there were never any complaints about wage rates in a market economy. A (mild) degree of discontent should be a permanent fixture in labor markets. Therefore, it would be incorrect to view labor agitation for higher wages as evidence of some kind of “low wage” market failure, or however people like to characterize it.
Perhaps when discussing history we might do better to point out the mistake of historians by acknowledging that wage level disputes are simply a result of the market working as it should.
What do you think?