he first maximum-wage law was enacted by Massachusetts as early as 1630. Due to the high wages commanded by the scarcity of construction craftsmen, the law concentrated on maximum-wage rates in the building trades. Carpenters, bricklayers, etc., were limited to two shillings a day and any payment above this rate would subject both the employer and the worker to punishment (for instance, a buying-cartel of employers established by the law punished the recalcitrant employer who decided to break ranks). Almost immediately, the magistrates decided to imbibe more of the magic medicine, and legal wage rates were pushed down to 16 pence a day for master carpenters and bricklayers, and correspondingly lower for other laborers.
But the economic laws of the market made enforcement hopeless, and after only six months, the General Court repealed the laws, and ordered all wages to be “left free and at liberty as men shall reasonably agree.” But Massachusetts Bay was not to remain wise for long. By 1633 the General Court became horrified again at higher wage rates in construction and other trades and at the propensity of the working classes to rise above their supposedly appointed station in life by relaxing more and by spending their wages on luxuries. Denouncing “the great extortion … by divers persons of little conscience” and the “vain and idle waste of precious time,” the court enacted a comprehensive and detailed wage-control program.
The law of 1633 decreed a maximum of two shillings a day without board and 14 pence with board, for the wages of sawyers, carpenters, masons, bricklayers, etc. Top-rate laborers were limited to 18 pence without. These rates were approximately double those of England for skilled craftsmen and treble for unskilled laborers. Constables were to set the wages of lesser laborers. Penalties were levied on the employers and the wage earners who violated the law. Sensing that maximum controls below the market wage led to a shortage of labor, the General Court decreed that no idleness was to be permitted. In effect, minimum hours were decreed in order to bolster the maximum-wage law — another form of compulsory labor. Workmen were ordered to work “the whole day, allowing convenient time for food and rest.”
Interestingly, the General Court soon decided to make an exception for the government itself, which was naturally having difficulty finding men willing to work on its public-works projects. A combination of the carrot and the stick was used: government officials were allowed to award “such extraordinary wages as they shall judge the work to deserve.” On the other hand, they were empowered to send town constables to conscript laborers as the need arose.
Although merchants were happy to join the landed oligarchy and the Puritan zealots in forcing down the wage rates of laborers, they were scarcely as happy about maximum controls on selling prices. The gentry were eager, however, to force downward the prices of products they needed to buy. A blend of mercantilist fallacies and Puritan suspicion of commerce, the result was persistent attempts to force commodities below their market prices. Having little conception of the function of the price system on the free market, the Massachusetts authorities also felt that maximum-price control would bolster the maximum-wage-rate program. There was no understanding that general movements in prices and wages are governed by the supply of and demand for money, and that this too can best work itself out on the free market.
Corn was the major monetary medium of the North, and in 1630 Massachusetts set the sterling price of corn at six shillings per bushel. Failing to work, this control was repealed along with the wage laws of 1631, and corn was “left at liberty to be sold as men can agree.” In 1633, however, maximum-price controls were reimposed as an auxiliary to the wage controls.
The massive wage laws of 1633 were quickly discovered to be a failure; once again the quiet but powerful economic laws of the market had triumphed over the dramatic decrees of the coercive state. After one year the actual wage rates were 50 percent higher than the statutory levels. At that point, the General Court repealed the penalties against paying, but retained those against receiving, wages above the fixed legal rate. While, in fact, no employer had ever been tried or penalized under the old act, the wage law was now an open and flagrant piece of class legislation. This was nothing new, however, as there were ample precedents in English maximum-wage laws since the early 15th century.
Another change made in 1634 allowed a little flexibility in decreed prices and wages by permitting each town to alter the legal rate in case of disputes. Only a year later the General Court, despairing of the continued failure of the law to take hold, repealed the comprehensive wage controls and the auxiliary price controls. Just before this comprehensive repeal, the courts had apparently been driven by the failure to inflict ever harsher penalties; fines had been so heavy that two workers were imprisoned for failure to pay. The authorities were at the crossroads: should they begin to impose on workers violating clearly unworkable economic decrees the sort of punishment meted out to heretics or to critics of the government? Happily, common sense, in this case, finally prevailed.
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