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Quotation of the Day…

Posted By Don Boudreaux On September 26, 2012 @ 8:48 am In Competition,Complexity & Emergence,History,Immigration,Prices,The Profit Motive,Work | Comments Disabled

… is from pages 379-381 of economic historian Stanley Lebergott’s 1984 volume, The Americans: An Economic Record [1] (footnotes omitted; emphasis added):

In market-type economies, workers’ incomes are typically fixed or bounded by their productivity on the job.  Such productivity rarely yields the sum fixed by their needs, desires, or by someone’s measure of “the just wage.”  (That outcome, of course, explains why so many persons reject the principles these economies use to fix wages and incomes.)….  [W]orker earnings from 1870 to 1940 advanced as much as net product per person employed did.  Since few economic models presume employer generosity or worker supplication, such parallelism must reflect a fair amount of both employer competition and worker job quitting.  All the evidence on U.S. mobility suggests that workers did a significant amount of job quitting.  They frequently moved to other firms, even to other states, in their search for better jobs.  About one in five workers actually moved to another state during their lifetime, according to the data for 1870 on.  In subsequent decades the mobility did not decline.  The rootlessness of American workers has long “amazed” European observers.  But it was essential in eroding whatever monopsony powers small town and rural employers might otherwise have achieved.

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[1] The Americans: An Economic Record: http://www.amazon.com/The-Americans-An-Economic-Record/dp/0393953114/ref=la_B001H6ODUY_1_2?ie=UTF8&qid=1347018245&sr=1-2

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