We have spoken of a tendency of competition to equalize wages but a very little observation will suffice to show us that wages are very unequal. It will aid us in arriving at an understanding of this fact if we think of the many thousands of different occupations as separate compartments each having its own demand for and supply of labor. Some of these compartments may be conceived as separated from neighboring compartments by solid walls through which the labor supply cannot flow. In other compartments the walls furnish some resistance to the flow of labor but the resistance is not insuperable. In still other compartments labor flows in and out without hindrance.

In the first of these compartments the influence of competition is worked out only over long periods of time. The rate of wages in occupations represented by compartments of this class is likely to vary widely from the general rate of wages in other occupations.

In occupations represented by the compartments of the second class the rate of wages is determined not only by supply and demand within the occupation, but also, to a smaller extent, by supply and demand from outside. Wages in these occupations will not vary so widely from occupation to occupation as in the former class of occupations.

In occupations of the third class, represented by the compartments with free ingress and egress, supply and demand outside the occupation are as potent in fixing the level of wages as the supply and demand within the occupation. There is likely therefore to be little difference in the rates of wages in different occupations of this class.

209. Labor Monopoly

Monopoly consists in the ability to regulate prices through control of the supply of, or the demand for, the thing monopolized. In those compartments discussed in the preceding paragraph where the labor supply does not flow in freely from the neighboring compartments a condition of monopoly may exist. The laborers already in the occupation may be in a position to keep others from entering it, with the result that wages are kept up above the level which would prevail if there were competition from outside. Here there is a monopoly element in the wages due to control of supply by the workers already in the occupation.