American Cities

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Of course under certain con- ditions, as the horizontal wage increase, this is so, but a study of the detailed wage situation through the cost system will almost invariably show, under the right manufacturing conditions, that the earners of the highest wages are the producers of the lowest unit cost. " The assumption of classical economists has been that the labor unit, or human being, was a fixed and definite thing, somewhat like a ton of coal, or a yard of cloth, and that consequently those e...nterprisers were most fortunate who secured these units at the lowest unit price. There was little recognition until the efficiency movement was well started that a labor unit is not such a commodity but a going machine, and that this machine is capable of wider variation in value of pro- duct than the inanimate machines, such as the steam engine or the automobile. TWO THEORIES OF LABOR COST Lower labor costs furnish a strong differential in productive business because of the relative importance of this cost.

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