The Economic Case for Generous Wages : Adam Smith asks employers to pay the most generous wages their finances will allow.
The Economic Case for Generous Wages

From ‘Wealth of Nations’, by Adam Smith (1723-1790).

Adam Smith would not have liked the so-called Living Wage. ‘Law can never regulate wages properly,’ he wrote, ‘though it has often pretended to do so.’ But he did like generous wages, out of hard-headed business sense - an argument much more likely actually to raise wages than merely cost jobs.

THE liberal reward of labour increases the industry of the common people. The wages of labour are the encouragement of industry, which, like every other human quality, improves in proportion to the encouragement it receives.

A plentiful subsistence increases the bodily strength of the labourer, and the comfortable hope of bettering his condition, and of ending his days, perhaps, in ease and plenty, animates him to exert that strength to the utmost.

Where wages are high, accordingly, we shall always find the workmen more active, diligent, and expeditious, than where they are low. That men in general should work better when they are ill fed, than when they are well fed, when they are disheartened than when they are in good spirits, when they are frequently sick than when they are generally in good health, seems not very probable.

From ‘Wealth of Nations’, by Adam Smith (1723-1790).

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Picture: © David Dixon, Geograph. Licence: CC-BY-SA 2.0. View original
Salt’s Mill in Saltaire near Bradford, West Yorkshire. Sir Titus Salt’s mills were revolutionary, with their fresh air, safe practice and clean environment, and he was careful to pay good wages, which he kept constant regardless of fluctuations in business. He also built cottages with proper sanitation, schools, laundries, libraries and concert halls (but no pubs) for them. No wonder that thousands of workers lined the streets at his funeral. See our post Sir Titus Salt.
By Adam Smith
By Adam Smith

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