How to raise wages

The government implements minimum wage laws, subsidizes farmers, and allows unions to bulldoze employers. Herbert Hoover encouraged businesses to maintain high wages in the early '30s, and FDR forced them to. But does paying laborers more than the market would give them really make us all better off? Hazlitt says no:

The question is not whether we wish to see everybody as well off as possible. Among men of good will such an aim can be taken for granted. The real question concerns the proper means of achieving it. And in trying to answer this we must never lose sight of a few elementary truisms. We cannot distribute more wealth than is created. We cannot in the long run pay labor as a whole more than it produces.

The best way to raise wages, therefore, is to raise marginal labor productivity. This can be done by many methods: by an increase in capital accumulation—i.e., by an increase in the machines with which the workers are aided; by new inventions and improvements; by more efficient management on the part of employers; by more industriousness and efficiency on the part of workers; by better education and training. The more the individual worker produces, the more he increases the wealth of the whole community. The more he is worth to employers, the more he will be paid. Real wages come out of production, not out of government decrees.