Italy and the Little Divergence in Wages and Prices: Evidence from Stable Employment in Rural Areas, 1500-1850

by Mauro Rota (Sapienza University of Rome) and Jacob Weisdorf (Sapienza University of Rome)

The full article from this post was now published on The Economic History Review and it is available on Early View at this link

The Medieval Plow (Moldboard Plow). Farming in the Middle Ages. Available at Wikimedia Commons

More than half a century ago, Carlo Cipolla advocated that early-modern Italy suffered a prolonged economic downturn. Subsequently, Cipolla’s view was challenged by Domenico Sella, who contended that Italy’s downturn was mainly an urban experience, with the countryside witnessing both rising agricultural productivity and growing proto-industry at the time. If Sella’s view is correct, it is no longer certain  that rural Italy performed differently to its rural counterparts in North-Western Europe.  This potentially implicates how to think about long-run trends in historical workers’ living standards and how these varied across Europe.

The common narrative – that early-modern Europe witnessed a little divergence in living standards – is underpinned by daily wages paid to urban labour. These show that London workers earned considerably more than those in other leading European cities. There are two important reasons, however, why casual urban wages might overstate the living standards of most early-modern workers. First, urban workers made up only a modest fraction of the total workforce. They also received an urban wage premium to cover their urban living expenses – a premium that most workers therefore did not enjoy. Second, many workers were employed on casual terms and had to piece their annual earnings together from daily engagements. This entailed a risk of involuntary underemployment for which workers without stable engagements were compensated. Unless this compensation is accounted for, day wages, on the usual but potentially ahistorical assumption of full-year casual employment, will overstate historical workers’ annual earnings and thus their living standards.

We present an early-modern wage index for ‘stable’ rural workers in the Grand Duchy of Tuscany, an important region in pre-industrial Italy (Figure 1).  Since these wages avoid the premiums described above, we argue that our wages offer a more suitable estimate of most historical workers’ living standards, and that the little divergence therefore should be considered using such wages instead. We draw a number of important conclusions on the basis of the new data and their comparison with pre-existing urban casual wages for Italy and rural stable wages for England.

Figure 1: Implied daily real wages of unskilled urban and rural workers in Italy, 1500-1850. Source: as per article.

First, we observe that early modern Italy’s downturn was effectively an urban one, with stable rural workers able to largely maintain their real annual income across the entire early-modern period (Figure 1). Indeed, the urban decline came from a pedestal of unprecedented high wages, possibly the highest in early-modern Europe, and certainly at heights that suggests that urban casual workers were paid considerable wage premiums to cover urban penalties alongside the risk of underemployment.

Our ‘apple-to-apple’ wage comparison within the Grand Duchy of Tuscany gives a precise indication of the size of the wage premiums discussed above. Figure 2 suggests that casual workers received a premium for job insecurity, and that urban workers, unlike rural workers, also received a wage premium. Further, when we compare the premium-free wages in the Grand Duchy of Tuscany with similar ones for England, we find that annual English earnings increased from 10 per cent higher than those in Italy in 1650, to 150 per cent higher by 1800 (Figure 3). If wages reflected labour productivity, then unskilled English workers – but not their Italian equals – grew increasingly more productive in the period preceding the Industrial Revolution.

Figure 2: The implied daily real wages of unskilled casual and stable workers in Tuscany, 1500-1850. Source: As per article.
Figure 3: Real annual income of unskilled workers in Italy and England, 1500-1850. Source: As per article.

We make three main conclusions based on our findings. First, our data support the hypothesis that early-modern Italy’s downturn was mainly an urban experience. Real rural earnings in Tuscany stayed flat between 1500 and 1850. Second, we find that rural England pulled away from Italy (Tuscany) after c. 1650. This divergence happened not because our sample of Italian workers lagged behind their North-Western European counterparts, as earlier studies based on urban casual wages have suggested, but because English workers were paid increasingly more than their Southern European peers. This observation brings us to our final conclusion: to the extent that annual labour productivity in England was reflected in the development of annual earnings, it increasingly outgrew  Italian achievements.

To contact the authors:

Mauro Rota, mauro.rota@uniroma1.it

Jacob Weisdorf, jacob.weisdorf@uniroma1.it

Wages in the Middle Ages

by Jordan Claridge (London School of Economics)

 

index.jpgHistorical research on labour and wages has been an object of considerable attention
for both industrial and post-industrial societies. Even in the contemporary period, issues surrounding concepts of work and remuneration, such as growing inequality and the gender pay gap, are regularly debated topics. Indeed, modern English society is currently dealing with fallout in these areas as a result of deindustrialisation and the idea of a universal basic income is gaining traction.

But for the more distant past, understanding these issues often becomes a battle with shadows. My research uses a new method for computing real wages (income adjusted for cost of living) for agricultural labourers in medieval England.

An accurate understanding of these wages is critically important for our conceptions of historic economic development, especially as existing scholarship on medieval wage rates are incompatible with the most recent estimates of historical GDP data and therefore our understanding of precisely how, when and why Western Europe grew rich while other parts of the world did not.

Current scholarship on wages and labour before 1500 tends to be highly extrapolated and interpolated and lacks systematic analyses grounded in precise evidence. My project employs a methodology connecting wage payments to precise data on the number of days worked by individual labourers and the prices for the goods that these same individuals needed to purchase, and facilitates the creation of a wage series based entirely on accurate historical data.

The systematic analysis and quantification of wage levels for the medieval period has been frustrated by the relative lack of records, or, even where records might be plentiful, by the inconsistency or obscurity in the ways in which wage levels are framed. As a result, current discussions of wages and labour before 1500 lack the bite of more systematic analyses grounded in precise evidence and leads to the divergence in results that we currently see in the literature.

My study attempts to break through this impasse by adopting a new method for determining the wage profile of workers on medieval English demesnes (the home farms of lords as against those of their tenants). It uses uniquely detailed agricultural accounts from these demesnes, which survive in tens of thousands for the period of this study (c. AD 1250 – AD 1450).

The method depends on connecting precise data on wages paid both in cash and ‘in kind’ in a manner that allows wages to be calculated without the distorting effect of proxy measurements. This approach promises to facilitate the creation of an accurate wage series for medieval England, based entirely on historical data both over region and over time and to allow surveys of the degree of both female and male labour evident in medieval demesne agriculture.