day, which means a higher wage per hour.  If wages per hour increase less than enough to make up for the fewer hours,[3] the purchasing power of the workers must be reduced.  If the output per hour is increased proportionally to the pay per hour, the existing wages equilibrium would not be disturbed.  But if the output increases not at all or in less than the proportion of the increase in pay, there is an inevitable disturbance of the wage equilibrium.  In a competitive industry this would compel a speedy readjustment of wages downward.  If a certain group, or large number, of workers were to begin turning out only 80 per cent as large a product as they did before while getting the same money wage, the costs per unit would be thereby increased.  Prices must rise or many of the establishments must close, and then prices would rise as a result.  This must throw some of the workmen out of employment and create a new bargaining situation for wages.  If the general eight-hour day were applied to every industry and to all wage workers at once, then all workers and all employers in the industry would be in a like situation.  But at once there must occur changes of consumers’ choices in a great number of ways.  If there are one fifth fewer goods evidently at least one fifth of the consumers must go without.  This would largely be the wage workers.  The things of which wage labor makes up a large part of the costs will rise in price relative to the things of which self-employed labor and of which materials and machinery make up a relatively larger part.  This must compel a reduction of the demand for the products of wage labor relative to other things, and be reflected to labor in a lower wage.  This reduction would not necessarily be just in proportion to the reduced output (that is, say, 20 per cent if from 10 to 8 hours, or 11 per cent, if from 9 to 8 hours).  It might even be more, but probably would be somewhat less.  In any case, both the money wages and the real wages of laborers, either in the particular trade or generally, must be reduced by a general reduction of hours that results in a decreased output.  In such cases, even when the workmen by a strike or general movement secured the same wage scale for a day of fewer hours (a higher wage per hour), they would be unable to hold it excepting where they had monopolistic control of the trade.

In a period of rising prices due to an increasing supply of gold, the readjustment of wages (per hour) away from an artificially high level down to a competitive rate goes steadily on.  Even when money wages remain the same their purchasing power declines at such times, and this serves soon to bring the high money wages into accord with the lower value of the services.[4]