Capital I, Chapter 21

Piece Wages

“Wages by the piece are nothing else than a converted form of wages by time, just as wages by time are a converted form of the value or price of labour-power.

In piece wages it seems at first sight as if the use-value bought from the labourer was, not the function of his labour-power, living labour, but labour already realized in the product, and as if the price of this labour was determined, not as with time-wages, by the fraction

daily value of labour-power

the working day of a given number of hours

but by the capacity for work of producer.” (p 516)

Marx points out that this appearance ought to be questioned by the simple fact that both piece rates and day rates appear side by side in the same industry.

“But it is, moreover, self-evident that the difference of form in the payment of wages alters in no way their essential nature, although the one form may be more favourable to the development of capitalist production than the other.” (p 517)

Suppose in a 10 hour day, 5 hours are paid (necessary labour) and 5 unpaid (surplus labour). Suppose the value of the output is £100. The worker receives £50 wages, capital £50 surplus value. Suppose the total output is 100 units. The worker is paid £0.50 per unit wages, and capital £0.50 surplus value. If a particular worker works at the average rate then clearly it does not matter whether they are paid at the rate of £0.50 per piece (piece rates) or £50 per day (day rates). In both cases their wage is £50, and they produce as much surplus value in either case.

If there are 100 workers on piece rates, the wages of those who work below the average rate, and whose wages fall below the day rate will be cancelled out by the higher wages of those who work above the average rate.

“Piece wages do not, in fact, distinctly express any relation of value. It is not, therefore, a question of measuring the value of the piece by the working-time incorporated in it, but on the contrary, of measuring the working-time the labourer has expended by the number of pieces he has produced. In time-wages, the labour is measured by its immediate duration; in piece wages, by the quantity of products in which the labour has embodied itself during a given time. The price of labour time itself is finally determined by the equation: value of a day’s labour = daily value of labour-power. Piece-wage is, therefore, only a modified form of time-wage. (p 517-8)

Piece rates have clear advantages for capital. With time wages, the worker needs close supervision to ensure they are continually working. That implies costs of supervision. With piece rates, the worker has an incentive to work continuously and at their maximum intensity in order to produce more pieces and maximise wages. Under time wages, the quality of output needs to be checked, and fines imposed for poor quality. Under piece wages, the worker has an incentive to maintain quality, because substandard pieces are not paid for.

This also provides the capitalist with a measure of work intensity, so workers unable to match this standard are dismissed. This also means the normal intensity of labour is raised.

“Since the quality and intensity of the work are here controlled by the form of wage itself, superintendence of labour becomes in great part superfluous. piece wages therefore lay the foundation of the modern “domestic labour,” described above, as well as of a hierarchically organized system of exploitation and oppression. The latter has two fundamental forms. On the one hand, piece wages facilitate the interposition of parasites between the capitalist and the wage-labourer, the “sub-letting of labour.” The gain of these middlemen comes entirely from the difference between the labour-price which the capitalist pays, and the part of that price which they actually allow to reach the labourer. In England this system is characteristically called the “sweating system.” On the other hand, piece-wage allows the capitalist to make a contract for so much per piece with the head labourer — in manufactures with the chief of some group, in mines with the extractor of the coal, in the factory with the actual machine-worker — at a price for which the head labourer himself undertakes the enlisting and payment of his assistant work people. The exploitation of the labourer by capital is here effected through the exploitation of the labourer by the labourer.” (p 518-9)

As well as raising the average level of intensity of labour, this also tends to a lengthening of the day, because that means more pieces are produced, meaning more wages. However, Marx’s previous comments in an earlier chapter have to be set against this i.e. that a shorter day enabled a higher intensity, which led to increased output, and both higher wages and higher profits.

As described earlier, although piece rates mean each worker is paid an individual wage based on their ability, this does not alter the total wage bill or relation to surplus value. But, it has other effects.

“But where a particular rate of piece-wage has for a long time been fixed by tradition, and its lowering, therefore, presented especial difficulties, the masters, in such exceptional cases, sometimes had recourse to its compulsory transformation into time-wages.” (p 520)

Marx argues that piece rates are the form most in harmony with capitalist production. At the beginning of modern industry between 1797-1815, they facilitated the lengthening of working day, and lowering of wages. But, piece rates have disadvantages for capital as productivity rises. In the example above, 100 pieces were produced in 10 hours with a value of £100. If productivity doubles so that 200 pieces are now produced in 10 hours, the value of each piece falls to £0.50. But, its clear that wages could not then continue to be paid at £0.50 per piece, or else there would be no surplus value. Wages need to fall to £0.25 per piece, leaving £0.25 per piece surplus value. Then wages and surplus value remain £50 each per day, equal to the value of the 200 items now produced. However, if workers accept the view that what they are being paid for is the value of their labour in each piece, they will be reluctant to reduce the rate per piece. This means that continual battles break out between workers and bosses over the latter's attempts to reduce piece rates.

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