Wages, Real and Money

Abstract

Our knowledge of the movements of real wages from the 12th century onwards in southern England, and later in western Europe, shows them as dominated by the varying pressure of population. A great rise of the English population in the 12th and 13th centuries brought output per head down to a level so low that a bad harvest brought famine. But the Black Death may well have reduced the population by a third, and its periodic recurrence kept numbers down. It was followed by a remarkable rise in the real wage: as indicated by the purchasing power of the wage-rate of the building craftsman or labourer, the real wage rose early in the 15th century to a high level that it sustained for a hundred years. This plateau was as high as any level to be reached, according to the same limited measure, until the second half of the 19th century. But in the 16th century the renewed pressure of population brought food output per head and real wages down again, so that after 1600 the index was running at about half its level of a century before, and in the wage-earner’s world famine was recurrent again. A slow but persistent trend of recovery set in after the Civil War. At the mid-18th century a rise of standards of living conspicuous to contemporaries coincided with the onset of a new growth of population, but also an agrarian revolution, which mitigated the fall in real wages that was caused by the Napoleonic Wars.