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9 July, 00:28

David ricardos 'iron law of wages ' stated that ...

A) workers will usually earn only subsistence wages

B) increases in productivity will raise the wages of workers

C) the government should ensure a decent wage for every worker

D) Women and children should earn the same wages as adult male workers

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  1. 9 July, 03:43
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    David Ricardo's "iron law of wages" basically states that parents would have more children if wages were raised. These children would then expand the number of workers and lower wages as they entered the labor market. Then, wages would fall and the workers would have fewer children. The process would then start over as wages would once again rise. He used this logic to advocate that wages would always tend toward a minimum level in the long run, hence the "iron law of wages" with static, unchanging wages. Many employers used this argument to support their natural reluctance to raise wages. This "iron law of wages" was also used to provide theoretical support for opposing labor unions.
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