The basic assumption in the comparison of increases in wages with increases in costs of food and services, is that all the workers/families in the first years of the Industrial Revolution, had incomes just covering their expenses.
However, this is not true. All the “family budgets” for cotton workers that we have, starting in 1806, show the expenses (with a good level of food) to be about 70 % of the total family income.
The building artisans could always save money. In 1812, the carpenters’ association in London had funds of twenty thousand pounds (the cost of 200 houses). All the trades in London had standard wages of at least 30 shillings a week, according to a statement by the committee of carpenters.
(Thompson, 1964, p. 238)
There is no quantitative statement in the “family budgets” for industrial workers, as to what they spent the surplus money on, but we have a certain quantity of general information:
|Moving to better housing in new suburbs (Manchester, Leeds)|
Better level of food, and imported food
Building houses in “building clubs”, to rent to poorer workers (Manchester, Birmingham)
Buying houses for themselves (Bradford, Potteries)
Good furniture for their homes
Good clothing for weekends
Membership in Mechanics’ Institutes, and purchase of technical magazines
Savings banks, medical insurance, unemployment and funeral insurance through their “trades unions”, building societies (since 1780)
Train journeys (for example, to the Great Exhibition)
Buying tools for using in their occupations (building trades, Sheffield cutlery) (*)
Saving money, to start an own business, or an own workshop
(*) Here, exactly due to the efficiency of processes in the Industrial Revolution, the unit costs of the tools decreased significantly.
The problem is that we do not have much data for the consumption of these articles or activities, of for the unit prices. So we cannot estimate the real outgoings of these families in each decade for these concepts, and not even for 1860. If we had numbers 1860, we could calculate the increase in real disposable income from 1770 to 1860.
We do have one source of the detail of expenses for an unskillled manual worker, which comes from Mr. Mayhew, “London Labour and the London Poor” (1851). This is a “better paid and fully employed operative scavenger, with his wife and two children” (the boy works, the girl is part-time at school). A “scavenger” is a street-sweeper, and here we have him:
(Mayhew, 1851, vol. II, plate facing p. 262)
The man, together with his wife and son, earns £ 1 8s. 4d. per week:
£. s. d.
Nominal weekly wages of man 0 16 0
Perquisites 0 2 0
Nominal weekly wages of wife 0 6 0
Perquisites in coal and wood. 0 7 4
Nominal weekly wages of boy 0 3 0
Total 1 8 4
With this income, in a week averaged over the year, he purchases the following:
Rent, candle, bread (5 quartern loaves), butter (2 lb.), sugar, tea, coffee, butcher’s meat (10 lb.), bacon, potatoes, raw fish, herrings, beer (at home), beer (at work),spirits, cheese (1 lb.), flour, suet, fruit, rice, soap, starch, soda and blue, dubbing, clothes for the whole family and repairing ditto, boots and shoes for ditto, milk, salt pepper and mustard, tobacco, wear and tear of bedding, schooling for the girl, baking Sunday’s dinner, mangling, amusements and sundries.
(Mayhew, 1851, Vol II, p. 231)
We see that he has an acceptable standard of living, although his job is not very nice (10 hours a day, sweeping and collecting rubbish), he probably lives in just two small rooms, and he does not wash very often.
But we can compare him with persons of the same class of job (and therefore the same relative wage position in the economy) in 1770. For this date, we know that construction assistants, building labourers, estate workers, and road labourers earned from 6s. 3d. to 8s. 6d. The cost of a quartern loaf was about 6d.; the men and their families would probably have eaten about 10 loaves a week, and had about 2s. 6d. over, to pay for other food, clothing, rent, and fuel.
The contrast between 1770 and 1860, for the same class of work, is considerable.
The other point of importance which results from the probable surplus amounts at the beginning of the Industrial Revolution, and the higher increase of incomes than living costs from 1770 to 1860 (+ 95 %, + 50 %, for non-agriculturals), is that there is a disproportionate improvement in the real net disposable income.
We see from the weekly incomes from jobs, reported by Sir Frederick Eden, that a good number of workers had wages of 12 shillings a week in 1795 (they were only a litte less in 1770). The quartern loaf was at 10 pence,so that a family eating 6 quartern loaves a week would spend 5 shillings; the other basic requirements might cost them 4 shillings, so that the total was 9 shillings, and the net disposable income was 3 shillings.
Now we inflate these figures to 1860, with 95 % improvement in income, and 50 % increase in the cost of living. The earnings are 23.4 shillings, the basic requirements are 13.5 shillings, and the net disposable income is 9.9 shillings. Regressing this figure to 1770, the disposable income is 6.6 shillings. The amount for “other expenses increases by a factor of 2.2, not by a factor of 1.3.