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Informed by labor economics and labor history, the economic history of labor markets is an alternative and unified approach to study the wage and employment relation. This broad field encompasses the nature, organization, and conditions of work, as well as the non-wage compensation labor earned. It is an alternative approach because, unlike the economics’ textbook model, the economic historian does not perceive the labor market as static. Rather, economic history provides a framework to examine the feedback mechanisms – the dynamic relation – between labor markets and technological change, business organization, government regulation, product markets, and the preferences of participants themselves. Put differently, history provides rich examples of the many margins of adjustment in labor markets across space and time, in addition to wage and employment dimensions.

Globalisation is often accused of unleashing a race to the bottom in labour regulation and social protection. The evidence suggests otherwise. This column explains how, historically, trade itself was a path to better labour regulation and social entitlements.

Standard trade theory, as invoked by political scientists and economists, would anticipate that workers in Belgium, a small Old World country, rich in labour relative to land, were in a good position to benefit from the wave of globalization before 1914. However, wage increases remained modest and ‘labour’ moved slowly towards adopting a free-trade position. Beginning in 1885, the Belgian labour party backed free trade, but its support was conditional on more and better social legislation. Belgian workers' wellbeing improved in the wave of globalization, but the vehicle was labour and social legislation and not rising wages.

This framework seems to mesh with the economic history of Canada's two central provinces, Ontario and Quebec, around the mid-twentieth century. Quebec was clearly the labour-abundant province, Ontario the capital-abundant region. Many labour reforms were first introduced in Ontario because it was the wealthier region. Since the two regions remained relatively large trading partners - as they were as long as tariffs protected Canadian industry - Quebec had an incentive to match Ontario's labour standards. ( 16) Thus, as long as Canada had effective tariff protection, producers and workers in the export industries in both regions benefited from rising labour standards, while consumers all across the country suffered, a result that was clearly not in the general interest. Since there was an incentive to overprotect, Ottawa's intervention in this area did not come up against provincial antagonism. In fact, sub-national authorities would have welcomed a central authority to coordinate standards. Richard Block and Karen Roberts (2000) provide the most exhaustive study of labour standards as they were in the late 1990s. Their results show a more consistent pattern. They divide provincial, territorial and federal labour standards for 1998 into nine categories reproduced in Table 3. ( 19) Each category is itself a composite of several indicators. Thus the category "paid time off" comprises, but is not restricted to, the variables found in Table 2. The calculation of the index value for each category followed a two-step procedure. First, individual provisions or labour standards in each category were given an index value that was greater the higher the level of employee protection; secondly, each provision was given a weight to represent its importance in its category. ( 20) There is some degree of arbitrariness in all this but, given the large number of standards included in the exercise, it would be expected that errors of commission would cancel out. The first two columns of Table 4 report the sum of the index values (nine labour standards and employment insurance) and the sum of the index values after each provision was deflated by an estimate of coverage. The higher the value, the greater the degree of labour protection. The last column of Table 4 gives the ranking of labour protection of each province and territory in North America in descending order. ( 21 ) Jurisdiction Minimum wage Over-time Paid time off Worker's compensation Federal 4.28 10.00 6.27 6.77 Alberta 1.52 (12) 7.28 (7) 7.61 (2) 6.69 (10) British Columbia 7.04 (1) 10.00 (1) 6.27 (4) 8.58 (3) Manitoba 2.44 (6) 10.00 (1) 5.89 (8) 6.54 (11) New Brunswick 2.44 (6) 3.21 (12) 5.38 (11) 5.99 (12) Newfoundland 2.44 (6) 4.57 (11) 5.53 (10) 7.25 (9) North West Territories 6.12 (3) 10.00 (1) 6.27 (4) 8.82 (1) Nova Scotia 2.44 (6) 1.85 (1) 5.71 (9) 7.32 (8) Ontario 6.12 (3) 7.28 (7) 6.07 (7) 7.64 (7) Prince Edward Island 2.44 (6) 5.92 (10) 5.20 (12) 7.72 (6) Quebec 6.12 (3) 7.28 (7) 7.23 (3) 8.35 (5) Saskatchewan 2.44 (6) 10.00 (1) 9.11 (1) 8.66 (2) Yukon 7.04 (1) 10.00 (1) 6.27 (4) 8.43 (4) Jurisdiction Collective Employment Unjust Occupational Advance notice bargaining equity discharge safety of plant closing and health largescale layoffs Federal 6.00 9.00 7.00 4.33 5.53 Alberta 6.00 (9) 8.10 (11) 7.00 3.07 (5) 0.00 (11) British Columbia 10.00 (1) 8.60 (5) 7.00 3.20 (2) 7.89 (1) Manitoba 9.00 (3) 9.10 (1) 7.00 3.13 (4) 6.03 (5) New Brunswick 8.00 (8) 8.10 (11) 7.00 2.11 (10) 5.71 (6) Newfoundland 9.00 (3) 8.60 (5) 7.00 2.08 (11) 5.03 (8) North West Territories 6.00 (9) 9.00 (3) 7.00 2.18 (8) 3.21 (10) Nova Scotia 6.00 (9) 9.10 (1) 7.00 2.18 (8) 6.37 (4) Ontario 9.00 (3) 8.50 (9) 7.00 3.24 (1) 7.03 (2) Prince Edward Island 9.00 (3) 8.60 (5) 7.00 1.87 (12) 0.00 (11) Quebec 10.00 (1) 9.00 (3) 7.00 2.63 (7) 4.50 (9) Saskatchewan 9.00 (3) 8.60 (5) 7.00 3.00 (6) 6.87 (3) Yukon 6.00 (9) 8.50 (9) 7.00 3.17 (3) 5.21 (7)

This article constructs new measures of worktime for Europe, North America, and Australia, 1870–1913. Great Britain began with the shortest work year and Belgium the longest. By 1913 certain continental countries approached British worktimes, and, consistent with recent findings on real wages, annual hours in Old and New Worlds had converged. Although globalization did not lead to a race to the bottom of worktimes, there is only partial evidence of a race to the top. National work routines, the outcome of different legal, labor, and political histories, mediated relations between hours and income.

At the outset of the industrial revolution the Lancashire labour market was a model of thoroughgoing competition. Wages adjusted quickly and smoothly to changes in the demand for and supply of labour. Within two generations, however, workers and firms had retreated from the market. Instead of busting wages, firms paid fixed rates; instead of breaking ties on short notice, workers sought longer-term associations. Social norms - doing the right thing - protected and preserved the fresh labour market arrangements. This book explains the causes and effects of changes in the labour market in the context of developments in labour economics and fresh research in social and economic history.

The first generation of enterprises during the industrial revolution had made sizeable investments in new machinery and plant, and to amortise these fixed costs it is widely believed that firms worked long hours, regardless of the state of trade. A detailed study of Lancashire textile firms in 1841 shows this picture to be inaccurate. Short-time working was a common response of firms, especially large ones, during cyclical downturns in the nineteenth century. Firms used collective output cuts as a means to protect the wage lists they had negotiated with workers. The lists also promoted and preserved the regional basis of the industry. As for workers, they saw short-time as a means to protect their jobs and the standard relation between effort and pay. Enforced by sanctions on firms that broke output agreements, short-time evolved into a rule of thumb in the Lancashire textile industry.

Using the record books of M'Connel and Kennedy, a leading cotton-spinning firm in Manchester, this article traces the development of managerial strategies to elicit effort from workers during the Industrial Revolution. Contrary to the conventional wisdom, the firm had difficulty in extracting effort from its workers, who were unwilling to increase output without capturing some of the gains through wage adjustments. Since spinners controlled the work organization, M'Connel and Kennedy had to accommodate workers' demands for stable piece rates, which were codified in the Manchester list of prices of 1829.

Using yarn prices and output as proxies for wages and employment, this paper asks how cotton spinning firms in the heyday of industrialization responded to demand shocks. The evidence is consistent with a two-sector efficiency wage model composed of large and small firms. Large firms incurred monitoring costs on their new technology. To eliminate shirking, they paid efficiency wages and laid off workers when faced by a reduction in demand. In small firms technical change was slower, and since monitoring was not a problem, they cut wages. Over the period, the number of small firms declined and layoffs increased.

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In Lancashire cotton spinning in the heyday of laissez-faire capitalism the labor market did not operate as an auction market. Evidence on piece-rate flexibility, length of tenure, and seniority is consistent with Okun's contract approach. Both workers and firms incurred initial set-up costs. Workers wanted to protect their initial investments in training, and firms, faced with a labor supply that varied in reliability and regularity, had a desire to cover initial hiring and tryout costs. The need to maintain long-term attachments had implications for wage and employment adjustment and the age structure of the labor force.

We pose a seemingly ageless question in economic history. To what extent did new entrants in the late nineteenth-century cotton-textile industry threaten the customary markets of the European core? Exploiting a newly constructed dataset on textile imports to Spain, we find that as trade costs fell, new rivals began to sell a greater variety of products. Along this dimension, competition can be said to have increased. In response, producers in Europe adjusted the type and number of goods exported. By 1914, specialization mapped onto endowments of skilled labour, capital, and access to raw materials. While firms in new industrializing countries exported low-end varieties, incumbents in the core shipped high-end goods, unit values increasing with levels of development.