5.20
that they are entitled to 'parity' with another group, raay be ready
to fight for it with sacrifices they would not otherwise dream of
making. That seems irrational, but in a society where people judge
themselves and others by how much they are paid, 'nfair' pay is a
standing insult." ((A. Tylecote, op.cit. p.84.))
His relative earnings also affect the typical worker's morale and
greatly influence his productivity whenever productivity is variable
and depends on the worker's application and state of mind. That is
generally the case in occupations that utilize not only the worker's
muscle power but his skill, judgement, carefulness and sense of
responsibility as well. Modern technology has greatly increased
the demand for those qualities in the x^orker and so has greatly
contributed to rendering the labor market more competitive.
For an increasing amount of evidence shows that productivity
depends very greatly on the worker's perception of how fairly he
is treated and remunerated. That makes his output an increasing
function of his wage, especially when that is below comparable
workers' wages. Once his employer recognizes that fact, he not
only finds himself facing a much more elastic supply curve of labor but
becomes a price taker in all but name. In the United States at any rate,
where the unionized sector is small, that seems to be the only way to explain
the general rise in wages that appears to be very little influenced by
differences in the availability of unemployed labor. I am now ready to
deal with the Japanese exception, which is attributed to the special way
in which they pay their ’workers.