r consumption habits as easily as can the
more fortunately placed groups, and secondly; in times of rising
prices, the movements of the wage earners from industry, or from
occupation to occupation are governed, within limits, by calculations of
the absolute change in the wages paid for different kinds of labor,
rather than by calculations of relative change. It nevertheless would
prevent the relative position of different grades of labor from changing
so radically as to lead to great discontent and possibly to derangements
in the distribution of the labor supply.

It can be claimed, in addition, for this compromise method that its
results would be in accord with the general trend of changes in the
differentials that have occurred in the past in periods of rapid price
movement. An inspection of the available material seems to show that in
times of rapidly rising prices the _relative_ differentials between the
lower grades of wage earners and the upper grades decrease, while the
_absolute_ differentials increase--and the reverse in times of rapidly
declining prices. They are in accord, for example, with the results
obtained by analyzing the course of differentials during the war
(1914-1919) in the industries for which wage data was gathered by the
National Industrial Conference Board--"Report Wartime Changes in Wages."
The data extends over the Metal, Cotton, Wool, Silk, Boot and Shoe,
Paper, Rubber and Chemical Manufacturing Industries. If the wage earners
are classified into five groups according to their pre-war wages, it is
found that the relative wages of the least paid groups (pre-war
standards) increased most, and so on in order to the best paid groups,
the relative wages of which increased least; the absolute increases,
however, are in exactly the opposite order.[145] They are borne out also
by Mitchell's studies of price movements in the United States.[146]

In conclusion, it may be said, that no matter which of the above methods
is adopted, it should be applied with as much consistency as can be
attained. The process of wage adjustment to movements of the price level
cannot be left in the field of guess work, where it now rests, without
giving rise to much quarreling and discontent.

FOOTNOTES:

[144] H. B. Higgins, "A New Province for Law and Order,"
_Harvard Law Review_, Jan., 1919. The Commission acting
under the Canadian Industrial Disputes Act, carried this
line of reasoning to its further logical con