11: The Mobility of Labor
In a competitive environment, most goods are mobile. There are some that cannot be moved (real estate) and others whose transportation costs are excessive - but for the most part a seller who is not offered a price he feels is acceptable in one location can take his merchandise elsewhere. The same is true of labor: when a worker finds no employer in his market offers a wage he wishes to accept, he can take his body and its productive capacity elsewhere.
Naturally, there are objections to this - namely that assumes that all men are economically motivated and put getting the best wage for their labor as the highest priority. It ignores a man's desire to remain in a community, due to his sentimental attachment to the place and people (friends and family) in the area.
Economics describes human behavior, though it often subsumes its motives. A person's willingness to pay a certain amount for a given good may be influenced by his tastes, desires, and emotional sentiments - just as his willingness to accept a certain wage for his labor may be likewise influenced by such concerns. Economics does not ignore his motivation, but does not dwell upon it either - it is merely a factor in determining pricing. If the wage in a foreign land is significantly higher, people will bid tearful farewell to their native land, but will leave all the same.
From a perspective of free markets, men are free to pursue wages they desire - though they may choose not to do so, it does not mean that another party has made it impossible for them to earn a living wage. Rather, they have chosen to remain in a market that pays lower wages for other reasons, and they value these reasons enough to "pay" for them by accepting a lower wage.
(EN: as an example, a worker who chooses not to move to another place for a wage that pays more is "paying" the opportunity cost - if he accepts a wage that's $50/week lower to remain where he is, then it can be said that is what he is paying for the luxury of living there instead of in a place he could get better wages.)
It is only in instances in which emigration is forcibly prevented that it can be said that a laborer cannot relocate himself to seek better wages. Except in those rare instances, location is a matter of choice.
He also concedes it's a choice many people make. Consider the lack of Chinese laborers to the United States, which was greatly in need of labor. In his time (1888), the living conditions in China were horrific, and America was offering great wealth for unskilled labor - yet of nearly half a billion "starving wretches" less than a hundred thousand had made the crossing.
The migration of labor is much like the migration of herds: while man has adapted his environment, he must remove himself when the conditions in his location become incapable of sustaining him. Just as a family will outgrow its home, so will all the families in a valley outgrow it, and exceed the ability of the environment to sustain them. However, it is in many instances not the ability of the land to produce food, but the ability of a market to produce sufficient customers. If a blacksmith can provide for the needs of a village, it has no need for a second - he need only train one apprentice to replace himself, and if he trains a second there will not be enough demand to sustain all three.
He mentions that settled people, who are the majority of the world, often prefer to stay in one place, to which they develop strong sentimental attachments. In fact, only one nation shows much preparation for labor to be mobile: America. This is because it is a new country and people have not put down roots - and in fact emigrated from their homelands to seek their fortune. Having done so once, they are not reluctant to do so again.
(EN: There follows a lengthy and tedious account of international migration during the author's time, which seems a bit superfluous except as an indication of how widespread a practice it had become. It was quite something in his time, as migration had been very rare before the industrial revolution.)
Most men, it seems, would prefer to stay close to the spot of their birth, and if there is no sufficient market for their product, to send the product to remote locations. This has been common throughout history, as farmers bringing their product to sell in towns and cities rather than in their own community has been in practice since recorded history.
However, he reckons that the inability or unwillingness of labor to move, particularly in Europe, might be a reason America is outpacing them. Not only will Americans go to where there is work to be done, but Europeans will steadfastly refuse to do so - preferring to remain unemployed at home than to be productive in another place. There must be a weighty incentive to shift a man from his parrish.
He also observes that the poorest segments of society, which ought to be most interested in relocating as necessary to improve their lot, often tend to stay put out of ignorance, distrust, fear, superstition, and acceptance of their "lot in life." There is nothing impeding such people except their own apathy, but their apathy is significant.
The same behavior may be seen of the unsophisticated vendor, who accepts a far lower price for his goods for the convenience of selling them in town when buyers in town fifty miles away would pay double or more the price. Whether he is ignorant of the opportunity, satisfied with his profit, unwilling to take on the journey, doubtful of the opportunity, or is simply too lazy to make the additional effort, it is his choice and the profit he foregoes is the cost of his irrational behavior.
(EN: It occurs to me that "apathy" is a sharp term, which often connotes a lack of moral character, but there may be a valid motivation. If a supplier or laborer gets as much as he needs from the local market to satisfy his desires, then he feels no motive to undertake additional effort to get more than he needs. It is entirely rational to work only as hard as necessary to earn what one needs and wants, and no harder. And no man can say for another what constitutes satisfaction - or make a case that he should want more than he has.)
Aside of the mobility of labor from one physical location to another, there is mobility of labor from one profession to another, even in the same market. That is, if an individual who is a farm hand learns to become a carpenter and prefers that trade, the net effect to the labor market is the same as if one farmer left and a carpenter moved into the area.
The economic effect of this, to the worker and his household, is generally a change in income (which may be positive or negative). The effect to the labor market, however, is that farm labor has become more dear by one man and carpentry more plentiful by one man. If many men make the same decision, the labor market suffers a shortage of farm hands (and an increase in their wages) and a surplus of carpenters (and a decrease in their wages).
Sizable changes to the labor force in an area do occur, when a manufacturing operation is founded or disbanded, or when the invention of machinery renders certain skills moot, and so on. Wherever there is a need for labor of a certain skill, such that employers offer an increase in pay, then workers will "trample each other down" in eagerness to obtain work and wages.
(EN: It's not mentioned here, but a common problem of the modern age, that having too many skilled workers gluts the market and people are unable to earn their worth. There are many college towns where people with college degrees, and even graduate degrees, wait tables and do other menial tasks because the market is glutted with educated people and, in rare instances, less sophisticated work pays better.)
It's mentioned that people are just as likely to irrationally cling to an unprofitable profession as they are to irrationally cling to an unprofitable location. Particularly in times of change, people are prone to fall into despair when their skills are no longer needed and they must start over in a new profession, often at a lower income, and this may happen repeatedly in times of significant progress.
This is a problem of the industrial era, in which new methods of manufacturing are replacing traditional approaches, and even newer methods replace what is today considered "new." It was not an issue in more static times, when professions were fixed and population growth and migration was unusual.
That is, if the children of blacksmiths trained to be blacksmiths and the children of farmer trained to be farmers, and if everyone had the very same number of children, then there would be equilibrium in the balancing of kinds of labor against the need for labor. But children do not always follow in their parents' footsteps, and there are disparities in the birth rates (people in town have fewer children than those in the rural areas) - so even if it were not for technological process creating new professions and making others obsolete, the proportion of labor would not remain stable.
Walker returns to the notion of the willingness of laborers to relocate or change professions, and notes that it has confounded a number of economists why it should be so. But this is simply because they consider only the physical obstacles and economic consequences or relocation - and money alone is not the only motive a man may have for choosing to do something.
There follows rather a bit of nit-picking about barriers to changing location and profession: the cost of the journey to find work elsewhere, having to learn a different language and adopt the habits of a different culture, the necessity of learning the skills necessary to be successful in another profession. All of these are obstacles, but surmountable for the man who is motivated to change his station in life.
There follows a long account of child labor in England at the author's time, particularly among the poorer classes who press their children into low-end professions, such as mining, farming, and factory work, to help support a family, and how this creates a situation in which children cannot learn skills of more advanced professions. Meanwhile, those of middle-class families are better able to attend schools and obtain training with ease. This is presented as an example of the barriers to mobility, particularly between the working classes and the middle class, that perpetuates over generations.
The enlightened laborer will be inclined to be proactive - to train himself or save the cost to travel to a better market - but such men are rare. For the vast majority, they remain still and do not prepare themselves, until an economic upheaval takes their means of sustenance, at which point they seek a change in their work or their location out of desperation.