In any country the wages commanded by laborers who have comparable skills but who work in

various industries are determined by the productivity of the least productive unit of labor, i.e., that unit of labor which works in the industry which has the greatest economic disadvantage. We will represent the various opportunities of employment in a country like the United States by symbols: A, standing for a group of industries in which we have exceptional, economic advantages over foreign countries; B, for a group in which our advantages are less; C, one in which they are still less; D, the group of industries in which they are least of all.

When our population is so small that all our labor can be engaged in the group represented by A, productivity of labor (and therefore wages) will be at their maximum. When our population increases so that some of the labor will have to be set to work in group B, the wages of all labor must decline to the level of the productivity in that group. But no employer, without government aid, will yet be able to afford to hire labor to exploit the opportunities represented by C and D, unless there is a further increase in population.

But suppose that the political party in power holds the belief that we should produce every thing that we consume, that the opportunities represented by C and D should be exploited. The commodities that the industries composing C and D will produce have been hitherto obtained from abroad in exchange for commodities produced by A and B. The government now renders this difficulty by placing high duties upon the former class of commodities. This meads that workers in A and B must pay higher prices for what they buy, but do not receive higher prices for what they sell.

After the duty has gone into effect and the prices of commodities that can be produced by C and D have risen sufficiently, enterprisers will be able to hire labor at the wages prevailing in A and B, and establish industries in C and D. So far as the remaining laborers in A and B buy the products of C and D, the difference between the price which they pay for those products and the price that they would pay if they were permitted to import those products duty-free is a tax paid not to the government, but to the producers in C and D, to enable the latter to remain in business. It is an uncompensated deduction from the natural earnings of the laborers in A and B. Nor are the workers in C and D paid as much, estimated in purchasing power, as they would have received if they had been allowed to remain in A and B under the earlier conditions.

When C and D are established, workers in these industries______.

A．receive higher wages than do the workers in A and B

B．receive lower wages than do the workers in A and B

C．are not affected so adversely by the levying of duties as are workers in A and B

D．receive wages equal to those workers in A and B