little to the value of the product. In such a case, the employer will
actually offer low wages because he need not fear that his competitors
will hire all of the laborers applying for jobs.

Thus when laborers are plentiful, relatively to the demand, the
automatic functioning of the law of supply and demand will result in
low wages. We need not waste time debating whether or not there ought
to be such a thing as the law of supply and demand; a far more
profitable exercise is to recognize that such a law exists, and to
consider how our program of industrial reform may be adapted to it.

173. AN ECONOMICAL REMEDY FOR LOW WAGES.--Low wages are generally the
result of low productivity, and low productivity is in turn the result
of an oversupply of laborers relatively to the demand. Granting the
truth of these premises, an economical remedy for low wages involves
two steps: first, the demand for labor [Footnote: By "labor" is here
meant those types of labor which are poorly paid, because
oversupplied. Unskilled day labor is an example.] must be increased;
and second, the supply of labor must be decreased. Any measure which
will increase the demand for labor, relatively to the demand for the
other factors of production, will increase the productivity of labor,
and will justify the payment of higher wages. Competition between
prospective employers will then actually force the payment of higher
wages. Similarly, any measure which will decrease the supply of labor
will strengthen the bargaining position of the laborer, and, other
things remaining equal, will automatically increase wages.

174. INCREASING THE DEMAND FOR LABOR.--If we bear in mind that modern
industry requires a combination of the various factors of production,
it will be seen that the utilization of laborers depends upon the