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Basic principles Quote by Paul Samuelson

“By keeping labor supply down, immigration policy tends to keep wages high. Let us underline this basic principle: Limitation of the supply of any grade of labor relative to all other productive factors can be expected to raise its wage rate; and increase in supply will, other things being equal…” quote by Paul Samuelson
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“By keeping labor supply down, immigration policy tends to keep wages high. Let us underline this basic principle: Limitation of the supply of any grade of labor relative to all other productive factors can be expected to raise its wage rate; and increase in supply will, other things being equal, tend to depress wage rates.”

Paul Samuelson

About This Quote

Source Book: Economics, 4th Edition, Paul Samuelson, 1998

Limiting the number of workers in a sector raises wages; increasing workers lowers wages if other factors stay the same.

In simple terms: Fewer workers → higher pay; more workers → lower pay.

Key Takeaway

Consider labor supply when evaluating wage trends.

Themes

economics labor markets policy wage dynamics

Mood

analytical critical neutral

Type

economic policy analytical

When to use this quote

  • policy debates
  • business hiring
  • career planning
  • government regulation

Key Concepts

Supply and demand marginal productivity factor pricing

Questions to Reflect On

  • How does technology affect labor demand?
  • What other factors influence wages?
A Different Perspective

Assumes other factors remain constant, which rarely holds true.

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