Wages are the share of the product of industry which is assigned as a remuneration of labor. Wages as here used includes salaries as well as what is more popularly known as wages. The term includes not only the payments under contract that the employer makes to his employee, but also the payments for labor where the laborer sells his products directly to the consumer. Thus the gardener in the price which he obtains for his vegetables receives wages for the labor which he has expended upon his garden.

202. The relation of demand and supply to wages. Since wages are a price which is paid for labor, the rate of wages depends, like other prices, upon the conditions of demand and supply. Other things being equal, the rate of wages will vary directly with the demand for labor and inversely with the supply of labor. There are, however, innumerable influences affecting demand and supply which tend to obscure the fact of their control over wages.

Many persons have the feeling that there is something degrading in the thought that the reward which is paid for human labor is determined on the same principles of supply and demand as govern the price of wheat or lumber. But such persons should find fault with the fact rather than with the statement of the fact, and if it is unworthy that persons should be paid for their labor on the same principles that govern the payment for wheat, other principles instead of other words should be used; new methods of fixing wages rather than new ways of talking about it are called for.