A margin of unemployed labour means a bare subsistence wage for low-skilled labour, and it means this wage earned under industrial conditions, such as we find under the “sweating system.”  In order to keep the wage of low-skilled labour down to this minimum, which can only rise with an improvement in the alternatives, it is not required that there should at any time exist a large number of unemployed.  A very small number, in effective competition with those employed, will be quite as effectual in keeping down the rate of wages.  The same applies to all grades of skilled labour, with this important difference, that the minimum wage can never fall below what is required to induce less skilled workers to acquire and apply the extra skill which will enable them to furnish the requisite supply of highly-skilled workers.  Trade Unions have instinctively directed all their efforts to preventing the competition of unemployed workers in their respective trades from pulling down to its minimum the rate of wages.  The strongest of those have succeeded in establishing a standard wage less than which no one shall accept; unemployed men, who in free competition would accept less than this standard wage, are supported by the funds of the Union, that they may not underbid.  Unions of comparatively unskilled workers, who are never free from the competition of unemployed, and who cannot undertake permanently to buy off all competitors ready to underbid, endeavour to limit the numbers of their members, and to prevent outsiders from effectively competing with them in the labour market, in order that by restricting the supply of labour, they may prevent a fall of wages.  The importance of these movements for us consists in their firm but tacit recognition of the fact, that an excessive supply of unskilled labour lies at the root of the industrial disease of “sweating.”

Sec. 2.  The Contributing Causes of excessive Supply.—­The last two chapters have dealt with the principal large industrial movements which bear on this supply of excessive low-skilled labour; but to make the question clear, it will be well to enumerate the various contributing causes.

[Greek:  a].  The influx of rural population into the towns constantly swells the supply of raw unskilled labour.  The better quality of this agricultural labour, as we saw, does not continue to form part of this glut, but rises into more skilled and higher paid strata of labour.  The worse quality forms a permanent addition to the mass of inefficient labour competing for bare subsistence wages.

[Greek:  b].  The steady flow of cheap unskilled foreign labour into our large cities, especially into London, swollen by occasional floods of compulsory exiles, adds an element whose competition as a part of the mass of unskilled labour is injurious out of proportion to its numerical amount.