The wages system

The wages system

Nate Hawthorne and Matt Kelly on the wage system in capitalism.

We talked in our last column about the slogan “A fair day’s wages for a fair day’s work.” In capitalism, we can’t get many things we need unless we have money. There are really only two basic ways to get money: Hire someone to produce something which you try to sell for a profit, or get hired by someone to produce something, which they will try to sell for a profit. This is why no wages under capitalism can be truly fair. This is because the basic arrangement is already unfair. Under capitalism we are required to spend our time working for other people. Furthermore, the stuff that capitalists sell…workers made it. The capitalists’ profits generally come from the difference between the price they charge for the stuff we produce and what they paid us to produce the stuff. That difference is inherently unfair.

But it’s important to note that capitalists are constrained by the capitalist system, too. These constraints are often more powerful than the actual laws on the books. Whatever the laws on paper, the real law of the land in capitalist society is the law of profits. When the official laws line up with that law, then the official laws tend to be followed. When the official laws no longer line up with the law of profits, then the law of profits tends to win out. This is because the capitalist system rewards employers who reduce costs while keeping prices up. For workers this means that companies that pay employees less (and that spend less on having a safe, sanitary work environment) than their competitors will be more profitable. The system punishes employers who pay employees more than competitors. This will always happen under capitalism. That’s another reason why “a fair day’s wage” is always going to be limited.

Sometimes liberal or progressive capitalists, and more generally people who are in favor of capitalism, will become concerned that wages are too low and conditions are too bad. This is because capitalists need workers. The capitalist class needs there to be workers tomorrow, and in 10 and 20 years. Smarter capitalists and people who support capitalism sometimes realize that if wages get too low then workers may have a hard time coming back to work. You may know this from your own life if you have ever dug through the couch cushions to find bus fare to get to work, or if you’ve had to work long enough hours or in bad enough conditions that your immune system crashes and you get sick and have to miss work. And if wages get too low then in the long term workers might not have enough kids and provide their kids with the sorts of education and training that will make them be what employers will want in 10 or 20 years. Sometimes capitalists behave in ways that maximize profits in the short term but which have the potential to undermine the stability of the company or of capitalism as a whole in the long term. The recent global economic meltdown triggered by financial markets is another version of individual capitalists putting the short term goal of maximum profit ahead of the long term interests of the capitalist class as a whole.

Liberal or progressive capitalists and their supporters recognize that capitalists overall will be better off if there is a balance between the short term profits of individual capitalists and the long term interests of the capitalist class. This leads these progressives to call for fair wages. Capitalist “fair wages” means that individuals get paid enough that they can support themselves in order to keep on working. In the long term, “a fair day’s wage” means that the working class gets paid enough to keep having kids and raising them up so that there continues to be a working class. From our perspective, the perspective of workers, we want more money for our work. But we also need to recognize that wages and improving working conditions for some workers is often in the long-term interests of the capitalist class. This is why there are minimum wage laws and health and safety laws. This also accounts for the motivation of some capitalists to support initiatives like universal health care. They want to ensure that healthy and productive workers are available for the production of profit.

The labor movement has a long history of fighting against the constraints that capitalism imposes on humanity. There have been important changes in the specifics of the constraints imposed by capitalism. At the same time, obviously capitalism still exists and it still constrains humanity—working-class people especially. The AFL-CIO, Change To Win and other unions have always based their struggles on the goal of “a fair day’s wage for a fair day’s work.” They have never once lifted any section of the working class out of wage slavery, nor have they ever tried. Similar to what we’ve seen with the liberal wing of the capitalist class, the improvements the labor movement has won have often helped to stabilize capitalism. Individual capitalists are often willing to work against the interests of their class if it means they can individually profit, which can make individual capitalists or small groups of capitalists into a threat to the system. Unions can sometimes function as a sort of immune system within capitalism. When unions organize to check particularly greedy capitalists who put their short term needs above the needs of their class, they reduce the extreme behavior of some capitalists who threaten to destabilize capitalism.

That doesn’t mean these unions are worthless or that we should not support their struggles. The labor movement has fought for and won very important changes in working-class people’s lives. To put it another way, the labor movement is a name for working-class people struggling to improve their lives, against the constraints imposed by capitalism, and there are very important successes that have been achieved. Many people would have a much lower standard of living without those successes. These improvements in standards of living apply mainly to union members, but to some extent there are improvements that have been shared with non-unionized workers as well. The eighthour day, regulations on child labor, the right to organize, workers’ compensation laws—for these things and more we owe a debt of gratitude to the brave men and women of the labor movement.

The improvements in working-class life won by the labor movement show that the constraints imposed by capitalism are not inevitable; demonstrating that the artificial limits that capitalism imposes on humanity can be pushed back and challenged. Obviously, organized workers will generally have better wages and benefits under capitalism. But the degradation of the entire working class is not about having better or worse wages, better or worse benefits. The degradation of workers stems from the fact that the working class doesn’t receive the full value that we produce by our labors and we have to be satisfied with a fraction of that value called “wages.” The AFL-CIO and the rest of the traditional labor movement is blind to this reality, and so can only ever help to make an inherently exploitative system a little easier to live in.

In the IWW, a union where our eyes are open to recognize this stark reality, we should recognize that some improvements, even hard-fought ones, can result in more stable versions of capitalism. Being aware of this can help us plan for what comes after a short-term victory. We especially need to make connections between our fights for improvements now and the fight to end capitalism. This means we must never really settle for any improvements. We don’t simply want a better life under capitalism, because “a fair day’s wages” is still unfair. We must always point this out and educate ourselves and each other about the ways capitalism limits working class people’s lives. We must also recognize that there is a ceiling on how much things can improve in a capitalist society.

The IWW organizer Big Bill Haywood once said, “Nothing is too good for the working class.” This echoes other radical slogans: “We demand everything!” and “everything for everyone!” Whatever we win, we’ll take it. We won’t feel grateful to anyone on high who “gave” it to us. As soon as we can we’ll fight for more, and we’ll join with our brothers and sisters elsewhere in the working class who are fighting, until we take it all.

Originally appeared in the July/August 2012 issue of the Industrial Worker