Parasitic-Industries Analysis and Arguments for a Living Wage for Women in the Early Twentieth-Century United States

Abstract

This paper examines arguments by activists and economists surrounding attempts to establish minimum wages for women in the United States in the Progressive Era. In particular, the paper focuses on analyses based on Beatrice and SidneyWebbs' argument that industries paying less than a living wage were "parasitic" on the society, a net drain on macro-efficiency. This analysis, widely accepted among economists of the time, viewed women as particularly vulnerable workers facing labor markets that were institutionally constructed and predatory. Unequal gender roles, employer power, and the absence of collective bargaining could all result in wages that were socially unacceptable as well as economically nonoptimal. These debates offer insights for modern feminist wage theories, and for current living wage campaigns.Minimum Wage, Living Wage, Parasitic-industries, Wage Determination, Feminist, Economics, History Of Economic Thought,

Promoting Labour Market Efficiency and Fairness through a Legal Minimum Wage: The Webbs and the Social Cost of Labour

“…Here again the average low-skilled worker is under more pressure to reach a deal, since he/she typically lives from weekly wage to weekly wage and has small savings or other income/assets, while the company has much deeper financial reserves and less immediate need to get the job filled. The greater the worker's needs and the thinner the fall-back resources, the more desperate the person becomes for work and the lower the reservation wage -explaining in part the low pay and poor conditions of vulnerable groups such as unskilled single women with dependant children (Power 1999). The result of workers' fewer choices and resources is to shift the market labour supply curve to the right.…”

Gender and the Minimum Wage

“…Third, the analysis focused on the effects of low wages on the community as a whole, putting priority on the macro-efficiency of labor market outcomes. (Power 1999:63) This argument in relation to parasitic workers and industries was deployed in the original debates on establishing a minimum wage in the US and has resurfaced recently in the form of the living wage campaigns in the US (Power 1999). It could be argued that the lack of an effective social welfare systems in the US coupled with a higher predominance of racial in addition to gender inequalities has heightened the importance of low pay in poverty prevention (Schmitt 2009) and also extended the concerns over low pay to men as well as women.…”

Institutional Economics and the Minimum Wage: Broadening the Theoretical and Policy Debate

“…One can legitimately disagree with most or all of the institutional side of the argument but, surely, it (like other heterodox perspectives) at least deserves an open hearing and careful examination. Thus, I endeavor to fill in this lacuna by sketching the institutional case for a legal minimum wage, drawing on several articles and books written by other institutionally oriented economists that have so far remained outside the mainstream literature (for example , Linder 1989;Craypo 1997;Prasch 1998;Power 1999;Levin-Waldman 2001, 2009. I start with the stated purpose of the minimum wage, with attention on the American case.…”