What are wages?
The value of the commodity human labour power is determined by the cost of reproducing the worker’s expended skill and energy and, also, of reproducing future wage workers. On the average, wages equal this value.
However, in different countries, according to circumstances, the value of labour power varies. In the lesser developed countries we find, as a rule, a lower standard of living and therefore a lower value than in more advanced industrialised areas. Important factors in the more developed areas are a greater consciousness in workers, and organised arrangements for the protection and advancement of their interests.
Wages are not, as some people think, the workers’ share of the wealth they produce. Capitalism is not a national share-holding concern. Let it be clear —Capital is wealth used in the reproduction of wealth in order to realise profit. Variable capital, the wages fund, together with constant capital, are both in existence before the act of production takes place. The workers’ labour power is bought by the capitalists and is used to create wealth. The worker, having worked, has a legal claim to the agreed wage. A sale and purchase have taken place and no question of shares arises. Shares are exclusively for the owners and shareholders, and they come from the surplus value wrung from workers.
Wages must be considered from three aspects. The first, nominal wages, or the actual amount of money paid: second, relative wages, i.e., the proportion of wages paid to the total wealth produced: third is the actual purchasing power of wages—real wages.
The basic conflict between the two classes, capitalists and workers, shows mainly in the first two aspects (wages and profits). Provided that other factors remain constant, an increase in one must cause a decrease in the other. In this, the productive sphere, the social relations are direct between owners and producers (employers and workers) regarding rates of pay and conditions of labour. The amounts of nominal and relative wages are determined here.
We can now consider briefly the conflict between wages and profits. To begin with, let us assume a weekly wage of £10 for a 40 hours week and a rate of exploitation of 100 per cent. An increase of five per cent. in wages would enable the workers, other factors remaining constant, to get 10s. p.w. more for the same quantity of labour. His standard of living is improved and the necessary labour time increased, while surplus labour time is reduced. The rate of exploitation is reduced from 100 to 93 per cent, and the relative wage now represents 55 per cent. of the total product as against the former 50 per cent. A reduction in the working week may also be beneficial for workers; they may obtain the same pay for less work.
The above situation is a most unpleasant one for the capitalist. In the first instance it means an increase of 5 per cent. in his variable capital. It reduces his surplus labour time and his surplus value. The rates of exploitation and profit have also fallen. But although temporarily defeated, the capitalist is undaunted and adamant. He is well aware of his excellent facilities for recovery.
It is quite possible, and it frequently happens, that increased wages or reduced working hours can be offset by a fall in relative wages. This can be brought about, for example, by increased production as a result of better organisation and supervision, etc. The introduction of more efficient machinery and the displacement of labour is another way. An increase in output of 6 per cent. would in some ways offset the five per cent, increase in pay or the reduction of hours. In such conditions, although the nominal wage is higher, the relative wage is lower. More wealth is being produced for slightly less pay.
Other means by which earnings may be increased as distinct from increased rates of pay are, overtime, piece work, or bonus on output systems. These methods entail longer hours of labour, or more intensive labour, or both. Increased earnings in such cases are at the expense of extra sweat and toil and in these conditions workers cannot increase their earnings without increasing the profit of their masters. The working classes’ only gain, if such it can be called, is in having the rates of pay increased or the hours of labour reduced. The struggle between wages and profits is unending and the employers are as a rule better placed.
Social evolution has produced three distinct forms of exploiting societies. In chattel slavery men were owned bodily. In feudalism, the serf, semi-free, was compelled to provide a certain proportion of his labour for the overlord. In both cases the surplus was easy to see. But modern wage labour, unlike the other two, appears to be fully-paid. In all three systems men were, and are, deprived of the fruits of their toil by an owning class. Private ownership of the means of production and control of the ability of men to work has enabled the ruling classes, in all cases, to own the wealth produced.
Slaves, serfs and proletarians all had to obtain food, clothing and shelter. This subsistence differed in amount, quality and kind in the different periods. Today the wage worker is legally “free.” Socially he is compelled to sell his ability to work in order to live. But he may select where and to whom he will sell it—in theory only!
Capitalism is the highest and most efficient form of exploiting society and its wages system conceals to a great extent the legalised robbery of its wealth producers. The separation of labour power from labour is responsible for the appearance that workers’ wages are the full value of their labour. The fact that the value of the embodied labour may be £20 or more, and wages £10 or less, is not so evident.
High wages and low prices, security, and a happy, prosperous and carefree working class, are illusory. A fair day’s wage for a fair day’s work is a fallacy. The abolition of capitalism with its wages system is an indispensable task for the workers. Working men and women can only attain their freedom, independence. and control of the wealth they produce. in a Socialist system of society. Production to satisfy human needs as distinct from privileged greed, is the Socialist object.