6. What Makes Wages High?

How much he will pay will depend, in turn, on how much his workers can produce. Therefore, we find relatively high wages in a country where the productivity of the workers is high. Where we find an extremely low level of wages, we can be sure that the productivity of the workers is low. Here, of course, we are speaking of real wages-what the wages will purchase-rather than of money wages. In a coun try experiencing great inflation, money wages may climb to astronomical heights and yet buy very little. Why there is such a tremendous difference in the pro duction of workers in different countries is not really a 26 part of this story, but it can be summed up very briefly in the one word, tools. The term tools includes plant and equipment, as well as the actual machines the worker operates. A man who has good tools with which to work is more productive than one who has poor tools. In the United States, it now requires an average invest ment of $16,600 to provide one industrial worker with tools. A new steel plant recently built on the Delaware River is reported to have cost $90,000 for each worker who will be employed there.