21 November 2022
The Black Death provides a particularly vivid picture of the effect on wage rates of a sudden and significant drop in the labour supply. By 1348 the Black Death had reached England. The effect on the labour supply was so swift and severe that Edward III issued the Statute of Labourers Acts of 1349 and 1351 which set maximum wage rates based on the average for the period 1325-1331. The statutes were a complete failure. From 1348 to 1377 successive waves of the Black Death slashed the population from 4.8 million to about 2.9 million1. The result was an increase in the ratio of land and capital to labour resulting in real wages rising by about 50 per cent2. Writing in 1375 John Gower, a country gentleman, lamented:
Labor is now at so high a price that he who will order his business aright, must pay five or six shillings now for what cost two in former times…the poor and small folk…demand to be better fed than their masters3
Henry Knighton, a canon of Leicester, wrote in 1388 that
the elation of the inferior people in dress and accoutrements in these days, so that one person cannot be discerned from another in splendour of dress or belongings, neither poor from rich nor servant from master4.
In the same year canons in Normandy complained the demand for labour had increased to the point that they
who did not demand more than six servants would have been paid at the beginning of the century5.
In 1356 the managers of the Florentine mint reported that the workers
at the mint do not want to work except when it suits them. And if one remonstrates with them, they reply with vulgar and arrogant curse words say they only want to work when it is convenient to them and provided there are increases in salary6.
This brief foray into medieval economic history was necessary to bring home the indisputable fact that the ratio of labour to capital is of vital importance, an importance that is generally ignored. Therefore, we find that large changes in the labour supply relative to the capital structure have significant effects on wage rates. It is also true, as stated previously, that productivity7 can for a time conceal the negative effects of a heavy immigration inflow.
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