16.5. Wages, Expenses, and Real Wages for Agricultural plus Non-Agricultural Occupations

	Wages index	Expenses index	Real Wages
	All occup	All occup	All occup
1770	100.0	100.0	100.0
1775	103.0	107.5	95.8
1780	109.3	95.2	114.4
1785	113.8	102.9	110.5
1790	124.0	113.3	109.4
1795	150.3	136.0	110.5
1800	154.3	183.3	84.2
1805	163.9	170.3	96.2
1810	172.5	190.8	90.4
1815	175.5	166.2	105.6
1820	166.2	160.5	103.6
1825	163.0	157.0	103.8
1830	160.9	135.9	118.4
1835	162.2	118.4	137.0
1840	165.4	154.5	107.0
1845	163.8	134.2	122.1
1850	168.5	121.1	139.1
1855	186.0	161.5	115.2
1860	197.3	147.6	133.6

The two columns are weighted by the number of persons employed in each sector.

COMPARISON 1770 TO 1860 AGRICULTURAL PLUS NON-AGRICULTURAL WORKERS 1770 = 100  WAGES                  197 EXPENSES            147 REAL WAGES       133

This average result does not actually tell us more than the two component series. The average value of 130 at 1860 is higher than the two component amounts, because about 30 % of the work force (over the long term) changed from the lower wages in the agricultural sector to the higher wages in the non-agricultural sector.  

Real Wages, This Study and Allen

	This study	Allen
	Real wage index	Real wage index
1770	100.0	100.0
1775	95.8	96.3
1780	114.4	101.9
1785	110.5	104.0
1790	109.4	103.8
1795	110.5	102.1
1800	84.2	91.7
1805	96.2	109.0
1810	90.4	104.6
1815	105.6	116.4
1820	103.6	107.3
1825	103.8	105.5
1830	118.4	109.9
1835	137.0	128.8
1840	107.0	120.4
1845	122.1	139.1
1850	139.1	144.0
1855	115.2	137.9
1860	133.6	145.3

a

(The figures of real wages in this study for 1840 and 1855, are artificially low; the cost of living in exactly these years was high, and not representative of the quinquennia)

The high figure of real wages in this study for 1780 is correct; there was an excellent harvest in 1779.

The difference in real wages to 1860 comes from the different starting points in 1770, this study = 19.3 pounds nominal per year (7.4 shillings per week), and Feinstein/Allen = 18.0 pounds per year (6.9 shillings per week). The increase from 1800 to 1860 is 59 % in this study, and 58 % per Feinstein/Allen. The pounds figures are net of an estimation for lost working days.

The presentation of the data in five-year periods hides the large variations in wages and in prices during the decade of the ‘fifties. In 1852-1854 there was a speculative wave in sales of manufactured articles, but linked to an impressive increase in salaries. From 1854 to 1857 there was a collapse of sales and manufacturing, a number of textile companies registered bankruptcy or suspension of activities, and some banks and financial companies failed. At the end of 1857, the situation of liquidity in the country was so fragile, that the Government had to authorize the Bank of England to issue documents without real backing. 

(Gendron, John Henry; An Investigation into Great Britain’s Commercial Crisis of 1857 and the Preceding Business Cycle; Short presentation of forthcoming master’s thesis, Providence College, 2012. http://www2.gcc.edu/dept/econ/ASSC/Papers2013/ASSC2013-GendronJohn%20Henry.pdf)

This description for the fifties is supported by data from the individual years, to be found in George Henry Wood’s article written in 1909: Real Wages and the Standard of Comfort since 1850.

	Wages	Retail Prices	Real Wages
1850	100	100	100
1851	100	97	103
1852	100	97	103
1853	110	106	104
1854	114	122	93
1855	116	126	92
1856	116	126	92
1857	112	119	94
1858	110	109	101
1859	112	107	105
1860	114	111	103

(Wood, 1909, Appendix, p. 102)

And informations as to the average earnings in England in terms of quartern loaves: