According to this view cutting wage rates reduces purchasing power which in turn reduces demand. It is the raising of labor costs above their market clearing levels that cuts demand by reducing employment and output. Pricing these labor services at their market rate clears the market, releases withheld capacity, restores purchasing power and expands payrolls. Green also claimed that because low wages are associated with low productivity this presents the free market approach to labor with a problem. The only problem here is Green's inability to use economic reasoning.
Wages are only low in a relative sense.
This means that every society will have low incomes because labor services are not a homogeneous factor, meaning that some workers will always be marginal. Hence, having labor at the bottom of the income rung says nothing about labor mobility or the state of the economy. This is really dreadful stuff. What raises productivity is not labor skills but capital accumulation. Capital and labor are complementary factors.