Thursday, 17 January 2013

Capital I, Chapter 20 - Part 1

Time Wages

Labour-power is sold for a definite period of time. The value of labour-power i.e. the cost of reproducing it over its average lifetime, can be reduced to these component parts. For example, if a worker lives for 70 years and of these works on average for 50, then if the cost of reproducing these workers over their lifetime is £500,000, the annual cost is £10,000. If they work for 50 weeks a year it is £200 a week. If they work 5 days a week, it is £40 a day, and if they work 8 hours a day, it is £5 per hour.

This forms the basis of the value of labour-power as time wages, i.e. the payment of wages for labour-power supplied for a given period of time.

The laws set out in Chapter 17, relating to the value of labour, and its relative proportion against surplus value then apply by a simple change of form of wages. For example, if the value of labour-power falls, because necessaries become cheaper, then in its transformed 'phenomenal' form, i.e. the form it presents itself at the level of appearances, it shows up as the difference between “nominal” and “real” wages. Here, if the nominal wage remains constant, the real wage rises, because it buys more of these now cheaper necessaries.

By the same token, the daily or weekly wage may remain constant, and yet real wages fall, if the length of the working day increases. Earlier, we said that if the working day is 8 hours this equates to a value of labour-power of £5 per hour. However, if the weekly wage remains at £200, but the working day rises from 8 hours to 10 hours, the real wage has fallen. Previously, 8 hours work earned £40, now it requires 10 hours work to earn the same amount, a fall from £5 per hour to £4 per hour.

If wages are paid by the hour, then even though the price of labour remains constant, wages will rise if more hours are then worked, and fall if fewer hours are worked. The same applies if the worker works more intensively rather than extensively i.e. more labour performed in the same period of time.

Similarly, the price of labour can fall whilst wages remain the same, if the workers family can be employed. The household may now have the same weekly wage of £200, required for its reproduction, but if now the wife works for 40 hours, and two children 10 hours each, that is a total of 100 hours. The price of labour will now have fallen from £200/40 = £5 per hour, to £200/100 = £2 per hour.

Marx quotes the author of the “Essay on Trade and Commerce”, and Nassau Senior,

This is perceived by the fanatical representative of the industrial bourgeoisie of the 18th century, the author of the “Essay on Trade and Commerce” often quoted by us, although he puts the matter in a confused way: “It is the quantity of labour and not the price of it” (he means by this the nominal daily or weekly wages) “that is determined by the price of provisions and other necessaries: reduce the price of necessaries very low, and of course you reduce the quantity of labour in proportion. Master manufacturers know that there are various ways of raising and felling the price of labour, besides that of altering its nominal amount.” (op. cit., pp. 48, 61.) In his “Three Lectures on the Rate of Wages,” London, 1830, in which N. W. Senior uses West’s work without mentioning it, he says: “The labourer is principally interested in the amount of wages” (p. 14), that is to say, the labourer is principally interested in what he receives, the nominal sum of his wages, not in that which he gives, the amount of labour!” (Note 1, p 510)

Anyone who has acted as a TU negotiator is well aware of this fact. A common strategy of management in responding to pay claims has always been to offer the prospect of increased amounts of overtime rather than increases in the hourly rate, and all too frequently workers have been willing to accept this higher top line figure rather than press for an increase in the hourly rate.

As a general law it follows that, given the amount of daily or weekly labour, &c., the daily or weekly wages depend on the price of labour which itself varies either with the value of labour-power, or with the difference between its price and its value. Given, on the other hand, the price of labour, the daily or weekly wages depend on the quantity of the daily or weekly labour.” (p 510

Back To Chapter 19

Forward To Part 2

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