ABSTRACT
If the change of institutions is generalised for all employers in the economy, the picture is much changed and becomes much more favourable to the general body of wage earners.t Thus suppose that all employers
simultaneously shift from the absence of wage-fixing institutions (as in Situation I) to the introduction of the wage-fixing institutions of a type designed to promote employment by each employer (as in Situation IV). The particular employer depicted in Table I in his attempt to take on the two additional workers will be attracting them either from an existing pool of the unemployed or from other employers ; but at the same time each of the other employers will be attempting to attract additional workers either from an existing pool of the unemployed or else from other employers including the particular employer depicted in the table . As a result of the greater competition between employers the supply curve of labour to each individual employer will be raised. For example , the particular supply curve of labour depicted in column c would be raised since the employer in question would no longer be able to attract as many as 17 workers for a wage of £10 .7, because other employers had now made offers which attracted some of these 17 workers away on better terms elsewhere. Thus the effect of generalising the shift from Situation I to Situation IV would be partly to increase the general level of employment at somewhat improved wage rates (corresponding to the £10.7 of Situation IV) and partly , in so far as the unemployed could not satisfy the employers' combined demands for labour , to raise the general level of wages still further through the increased competition for labour between the various employers (i.e. to raise still further the wage corresponding to the £10.7 of Situation IV).
