after the determinations came into force and has also shown the variations in selected non-board trades. He shows that for male employees in thirteen board trades the advances in wages previous to the determinations amounted in the aggregate to 7.6 per cent on the combined average rates of the trades, while in nineteen board trades after the determinations came into force the aggregate advance was 16.5 per cent on the combined average rates, and in twelve non-board trades the aggregate advance was 11.6 per cent on the combined average rates.

For female workers the advance of wages in the afterdetermination period in six trades was equal to 10 per cent on the combined averages and in twelve nonboard trades the advance was equal to 8.8 per cent on the combined averages. Taken in connection with other wage statistics these figures seem to show in a fairly conclusive manner that the determinations of the wages boards have been a contributing influence in the wage increases which have taken place.

The task of the wages board is of course not to establish a rate for all workers in a given trade or to concern itself with average rates in that trade, but to establish the minimum wage which may be paid to the workers generally in the trade for which the board is appointed, or various minima for the different branches of the trade or for different groups of workers classified according to sex, age and experience. It has seldom happened that a wages board has reduced wages either for the trade generally or for any particular branch of the trade, altho it has occasionally happened that the effect of a board's determination has been to reduce the average wages paid, since employers after the determinations were made replaced adult male workers by women workers or

1 See especially the Aves Report, p. 43.

by apprentices or by so-called " improvers," that is employees who have not yet had the necessary experience to enable them to earn the wages of a fully experienced worker.

There is no guidance in the statutes as to the principle on which the mimimum wage should be fixed. The only thing of this sort which has been attempted was the amendment to the Victorian law in 1902, which instructed the boards to ascertain the average rate or wage "paid by reputable employers to employees of average capacity" and to fix the minimum wage or rate no higher than such average rate. The same requirement was copied into the factories acts of the other states having the wages board plan. Inasmuch as the statutes did not attempt to define the word "reputable," it cannot be said that Parliament had done much in the way of furnishing a guiding principle to the boards. The clause, however, proved very embarrassing to the boards in their work. It meant in practice that a board could not raise the rates above the current rates in the trade without putting itself in the embarrassing position of claiming that most employers were not reputable. Accordingly in all states this provision of the law was repealed.

In the absence of any guiding principle the boards have been free to act according to whatever principle they saw fit to adopt. Generally speaking they have not consciously followed any principle, but wages have been established in accordance with the bargaining powers of the respective sides. The decisions of the arbitration courts, especially those of the Commonwealth Arbitration Court, in which Mr. Justice Higgins has set forth so clearly the principles which he has followed in establishing a minimum wage, have undoubtedly exercised considerable influence on wages

board determinations, but only by force of example and not because of any legal compulsion to follow these precedents. In turn it may be said that the judges in the arbitration courts have frequently been influenced and guided by the determinations of the wages boards.1 Altho originally established to provide a minimum rate of wages in the trades in which wages were below the sum necessary to provide a decent subsistence for the worker, wages boards in Australia have long ceased to be guided by the notion of a subsistence wage. The workers in the strongly organized trades would not consider it worth their while to struggle to secure a minimum wage which was merely a subsistence wage. The wage for which they contend is the standard rate or wage, the one which will become the prevailing rate or wage in the trade in question. The result is that minimum rates of pay are established in the same way and on the same basis as they are established under voluntary collective bargaining where both employers and employees are well organized. Employers who at first strenuously objected to this have ceased to urge their objections and now recognize that so long as their competitors are obliged to pay the same wages there is little reason to fear the standard rates. At times when they have had reason to feel that the rates were fixed too high by the board, and that in consequence they would be unable to compete with outsiders, the employers have appealed to the Court of Industrial Appeals for a reduction of the rates fixed by the board. Reductions have been made by the Court in Victoria in the following trades or occupations: artificial manure, boilermaking, bread, builders' laborers, commercial clerks, fell-mongers, fuel and fodder, and ice. In one or two

1 For a statement of the principles followed by the arbitration courts in fixing wages, see my article on "Judicial Determination of the Minimum Wage in Australia" in American Economic Review, June, 1913.

other trades, certain employees have secured from the Court an advance in wages over those allowed by the boards, but this advance has been due to a readjustment of the board rates in the various branches of the trade rather than to any intentional design on the part of the Court to raise wages above those established by the board.

Statements are frequently made that any system of wage regulation through wages boards or compulsory arbitration is bound to exercise a leveling effect upon wages. The original intent of the law, it is said, was to establish a minimum wage which should afford a decent subsistence to the worker but which should by no means represent the maximum wage in the trade or even the average wage. The board, however, under the strong pressure of the workers' representatives is led to fix the minimum so high that, it is claimed, employers can pay it only by bringing down the wages of the most competent workers to the rates established by the board for the less competent. In other words, the minimum wage becomes the maximum, and it is held that there is no incentive for the ambitious worker to put forth his best efforts. That this is one of the results of wages board determinations is an opinion which has been held by more than one investigator1 and it is even now shared by many men in Victoria, not only by employers but by men prominent in public life like Messrs. Deakin, Peacock, and Watt, who have been and are still friendly to the wages board plan.

In spite of this strong support given to the theory, it appears to be one which is supported by a priori arguments rather than one based on the proof of actual experience. No doubt boards have at times made the

1 Clark, op. cit., pp. 65-66. Schachner, op. cit., pp. 246-247. Report of the Royal Commission of 1902 in Victoria, pp. xxxviii, xlv, xlix.

mistake of setting the minimum rate too high, a rate at which it was profitable to employ only the best employees. Perhaps at other times, altho the minimum fixed was low, some employers have taken advantage of it to reduce the wages of their workers. But in a country in which labor is as scarce as it is in most trades in Australia this has not been the usual result of a wages board determination. Several times in talking with employers who held such opinions as the above, I have asked them whether in their own factories the majority of the employees were working at the minimum rates. Invariably it has turned out to be the case that few if any of their own employees were working at rates as low as the minimum established by the boards. Of course in those trades where payment by the piece prevails, there is no danger of equality of earnings. But even where time wages are the rule, there is no good and sufficient reason why the regulation of wages by wages boards should cause wages to seek a level.

Employers are not obliged under minimum-wage laws to retain in their employ any one who is unable to earn the minimum fixed by the board, nor do they as a matter of fact do so. On the other hand, there is no reason why men whose superior ability has enabled them prior to a determination to earn a wage in excess of the minimum fixed by the board should allow their wages to be brought down to the legal minimum merely because their employers may have been compelled to raise the wages of those employees who had been paid less than the minimum established by the board. In the highly sweated trades, where advantage had been taken of the individual's poverty and weakness, the first effect of the determinations was undoubtedly to raise the wages of most of the employees. In this way the wages may be said to have been "leveled up," i. e.,