A margin of unemployed labour means a bare subsistence wage for low-
skilled labour, and it means this wage earned under industrial
conditions, such as we find under the "sweating system." In order to
keep the wage of low-skilled labour down to this minimum, which can only
rise with an improvement in the alternatives, it is not required that
there should at any time exist a large number of unemployed. A very
small number, in effective competition with those employed, will be
quite as effectual in keeping down the rate of wages. The same applies
to all grades of skilled labour, with this important difference, that
the minimum wage can never fall below what is required to induce less
skilled workers to acquire and apply the extra skill which will enable
them to furnish the requisite supply of highly-skilled workers. Trade
Unions have instinctively directed all their efforts to preventing the
competition of unemployed workers in their respective trades from
pulling down to its minimum the rate of wages. The strongest of those
have succeeded in establishing a standard wage less than which no one
shall accept; unemployed men, who in free competition would accept less
than this standard wage, are supported by the funds of the Union, that
they may not underbid. Unions of comparatively unskilled workers, who
are never free from the competition of unemployed, and who cannot
undertake permanently to buy off all competitors ready to underbid,
endeavour to limit the numbers of their members, and to prevent
outsiders from effectively competing with them in the labour market, in
order that by restricting the supply of labour, they may prevent a fall
of wages.
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