By our bootstraps: Origins and effects of the high-wage doctrine and the minimum wage

Conclusion  Although the high-wage doctrine — the belief that the level of aggregate demand is determined by the level of wage rates — is most often associated with the Great Depression, the doctrine’s effects on wage policy go back at least two decades further. Rather than having been a product of desperate times, the doctrine gained wide acceptance during the prosperous 1920s as businessmen and economists, citing the success of Henry Ford's continuing high-wage policies, and the (supposedly counterproductive) wage deflation that had marked the steep depression of 1920-21, applied the doctrine's demand-enhancing logic to push for an economy-wide minimum wage. The authors thank Fred Bateman, Don Bellante, Roger Garrison, Peter Klein, and Anthony Patrick O’Brien for thoughtful comments and suggestions.