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« Tuna 2 / 2019

Histriographical and Source Critical Remarks in the Study of Nominal and Real Wages at the End of the 19th Century and the Start of the 20th Century

This article provides an overview of the nature of nominal and real wages, and explains how they are studied in the works of historians. Rather little attention has been paid to this topic in Estonia. The article provides an overview of the current state of research and discusses whether it would be possible to conduct a passable study examining the standard of living at the end of the 19th century and the start of the 20th century using Estonian archival material. The article also proposes potentially suitable archival sources. Contemporary newspapers, which provide an overview of market prices that were current at that time, are also suitable for gathering data. Additionally, various institutions have gathered information on wages. By virtue of the nature and large number of existing sources, it is possible to thoroughly study this topic starting from the 1920s, when the Central National Statistics Bureau was established (in 1921) for gathering data. The article also presents a selected bibliography of works on real wages and standards of living, and an overview of common research methods, including the subsistence basket method. We can among other things assess economic development and people’s standard of living by studying real wages. In order to study historical real wages, contemporary wages and prices have to be studied first and a suitable consumer basket has to be put together. The earnings of construction workers are usually examined since they are often recorded in sources. Although archival material contains information on daily wages, it does not reflect employment levels, concerning which the researcher him/herself has to make certain generalisations that take local conditions into consideration. If information has not been preserved concerning the everyday consumption of the relevant family, the researcher him/herself has to put together a plausible consumer basket that would reflect local consumption of that time as accurately as possible. There are numerous difficulties in putting together a consumer basket, starting with finding a reliable price source and ranging to finding the right balance between groups of consumed goods. Although historians have not arrived at a consensus regarding the best methods, the study of real wages is important since it makes it possible to trace the development of the labour market and numerous other aspects in the economy.