• DOI:10.1086/252125
• Corpus ID: 154687152

The Economic Theory of a Legal Minimum Wage

@article{WebbTheET,
  title={The Economic Theory of a Legal Minimum Wage},
  author={Sidney Webb},
  journal={Journal of Political Economy},
  volume={20},
  pages={973 - 998}
}

• S. Webb
• Published 1 December 1912
• Economics
• Journal of Political Economy

The fixing of a Minimum Wage by law?making it a penal offense to hire labor at a lower rate than that fixed by the law? is now an accomplished fact, of which the world has had half a generation of experience. In this matter of the Legal Minimum Wage the sixteen years' actual trial by Victoria is full of instruc? tion. Victoria, which is a highly developed industrial State, of great and growing prosperity, had long had Factory Laws, much after the English fashion. In 1896, largely out of humanitarian feeling for five specially "sweated" trades, provision was made for the enforcement in those trades of a Legal Minimum Wage. Natu? rally this was opposed by all the arguments with which we are familiar?that it was " against the laws of Political Economy," that it would cause the most hardly pressed businesses to shut down, that it would restrict employment, that it would drive away Capital, that it would be cruel to the aged worker and the poor widow, that it could not be carried out in practice, and so on and so forth. Naturally, too, all sorts of criticisms have since been leveled at the administration and working of the law; and over and over again eager opponents, both in England and on the spot, have hastened to report that it had broken down. But what had been the result ? In the five sweated trades to which the law was first applied sixteen years ago, wages have gone up from 12 to 35 per cent, the hours of labor have invariably been reduced, and the actual number of persons employed, far from falling, has in all cases, relatively to