Nominal Wages - Part 4 of 4

Nominal or money wages can be misleading in other ways. A nominal wage of, say, £100 a week, might remain constant, and, yet, the actual week, might amount to 30 hours, 40 hours, 50 hours or more. An employer might still pay £100 a week in wages, but, reduce the amount of breaks that workers can take, or simply require them to work additional hours. For some workers, this might take the form of being expected to work longer, until certain tasks are completed, or to work on mobile devices during the journey into work, and so on.

Firms are usually able to do this when labour is already plentiful, and competition between workers makes them weak. Conversely, in periods when labour is in short supply, and workers are in a stronger bargaining position, they may demand additional pay for such additional work, including premium overtime rates, unsocial hours payments, and so on. Or, as happened in the early 1960's, they may simply demand to have a reduction in the working-day and week, more holidays and so on. In other words, the nominal wage would remain the same, the real wage would remain the same, but the relative wage would rise.

This is also why the hourly wage metric does not give the full picture. Hourly wages might be constant or rising slightly, and, yet, in a period of economic expansion, the first manifestation of that is that workers are asked to work longer hours. Depending on the conditions, as described above, that may be without additional pay, or with pay, meaning that real wages might rise, or with enhanced overtime rates, meaning that not only would real wages rise, but so too would relative wages. All of that would be likely, before any significant movement in hourly wages.

Finally, as Marx notes, the wages of workers might fall, whilst household wages remain constant. The introduction of machines, meant that the wages of a male worker, as head of household, was reduced, and, yet, labour-power continued to be reproduced, by, now, having the rest of the household drawn into employment. In addition to the wages of the father, there was now the wages of mother and children into the household, each, individually, less than had previously been the case, but, in total, sufficient for the subsistence of the labourers.

In the 1950's, this was, also, the way capital first responded to the shortage of labour, and upward pressure on wages. In addition to immigration, capital drew married women into the workforce from domestic labour in the household, so that although nominal wages did not rise as much as they would have done, total household incomes rose, resulting in a rise in household nominal wages, as well as real wages.

When, in the 1960's, this was still not enough to increase the size of the labour supply/social working-day, and labour was strengthened as against capital, it resulted not only in workers demanding a shorter working week etc., but, also, in them winning a raising of the school leaving age, which compounded the shortage of labour and pressure on profits, which resulted, eventually, in the crisis of over production of capital, in the mid 1970's, and capital's response in the form of a new technological revolution, to replace labour, and create a relative surplus population.

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