ABSTRACT
The long-time trend in the purchasing power of wages is upward at about the same rate as the increase in efficiency, but the short-time trend is strikingly influenced by inflation and deflation. When prices rise suddenly, wages rise less rapidly and the buying power is reduced. During the Civil War period, wages in the United States rose much less rapidly than prices. Although prices started to decline in 1864, wages continued to rise until 1873. The labourer who insists on holding up wages when there is a rapid decline in prices is also asking the impossible and is likely to find that he has a good wage rate but no job. Wages in fertile districts are permanently higher than wages in districts that have poor soils. Wages index numbers for the United States and England were almost identical in 1933.
