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23.08.13 About MR



Monthly Review Press

A Freedom Budget for All Americans: Recapturing the Promise of the Civil Rights Movement in the Struggle for Economic Justice Today
A FREEDOM BUDGET FOR ALL AMERICANS: Recapturing the Promise of the Civil Rights Movement in the Struggle for Economic Justice Today
by Paul Le Blanc and Michael D. Yates


Wisconsin Uprising: Labor Fights Back
WISCONSIN UPRISING: Labor Fights Back

The ABCs of the Economic Crisis: What Working People Need to Know
THE ABCS OF THE ECONOMIC CRISIS: What Working People Need to Know
by Fred Magdoff and Michael D. Yates


Why Unions Matter
WHY UNIONS MATTER
by Michael D. Yates


More Unequal
MORE UNEQUAL: Aspects of Class in the United States
by Michael D. Yates


Cheap Motels and a Hot Plate
CHEAP MOTELS AND A HOT PLATE: An Economist's Travelogue
by Michael D. Yates


Naming the System
NAMING THE SYSTEM: Inequality and Work in the Global Economy
by Michael D. Yates


Rising from the Ashes
RISING FROM THE ASHES?
Labor in the Age of "Global" Capitalism
edited by Ellen Meiksins Wood, Peter Meiksins, and Michael D. Yates



Longer Hours, Fewer Jobs
LONGER HOURS, FEWER JOBS: Employment and Unemployment in the United States
by Michael D. Yates


The Endless Crisis
THE ENDLESS CRISIS: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China
by John Bellamy Foster and Robert W. McChesney


The Great Financial Crisis
THE GREAT FINANCIAL CRISIS: Causes and Consequences

Marx's Ecology
MARX'S ECOLOGY: Materialism and Nature by John Bellamy Foster

The Last Phase in the Transformation of Capitalism
THE LAST PHASE IN THE TRANSFOR-
MATION OF CAPITALISM
by Michal Kalecki


Theory of Economic Dynamics
THEORY OF ECONOMIC DYNAMICS
by Michal Kalecki


Monopoly Capital
MONOPOLY CAPITAL: An Essay on the American Economic and Social Order by Paul A. Baran and Paul M. Sweezy

The Theory of Capitalist Development
The Theory of Capitalist Development by Paul M. Sweezy

The Law of Worldwide Value by Samir Amin
THE LAW OF WORLDWIDE VALUE by Samir Amin

The Political Economy of Growth
THE POLITICAL ECONOMY OF GROWTH by Paul A. Baran

An Introduction to the Three Volumes of Karl Marx's Capital
AN INTRODUCTION TO THE THREE VOLUMES OF KARL MARX'S CAPITAL by Michael Heinrich

The Rosa Luxemburg Reader
THE ROSA LUXEMBURG READER edited by Peter Hudis and Kevin B. Anderson

Meatpackers
MEATPACKERS: An Oral History of Black Packinghouse Workers and Their Struggle for Racial and Economic Equality by Rick Halpern and Roger Horowitz

The Education of Black People
THE EDUCATION OF BLACK PEOPLE: Ten Critiques, 1906-1960 (New Edition) by W.E.B. Du Bois (edited by Herbert Aptheker)

The American Revolution: Pages from a Negro Worker’s Notebook
THE AMERICAN REVOLUTION: Pages from a Negro Worker’s Notebook by James Boggs (New Edition with New Commentary by Grace Lee Boggs and Others)

The Politics of Immigration
THE POLITICS OF IMMIGRATION Questions and Answers by Jane Guskin and David Wilson

Mexico's Revolution Then and Now
MEXICO'S REVOLUTION THEN AND NOW by James D. Cockcroft

Faces of Latin America
FACES OF LATIN AMERICA, 4TH EDITION (REVISED) by Duncan Green and Sue Branford

Open Veins of Latin America
OPEN VEINS OF LATIN AMERICA:
Five Centuries of the Pillage of a Continent
by Eduardo Galeano


Days and Nights of Love and War
DAYS AND NIGHTS OF LOVE AND WAR by Eduardo Galeano

Lettuce Wars: Ten Years of Work and Struggle in the Fields of California
LETTUCE WARS: Ten Years of Work and Struggle in the Fields of California by Bruce Neuburger

Wisconsin Uprising: Labor Fights Back
WISCONSIN UPRISING: Labor Fights Back

Embedded with Organized Labor
EMBEDDED WITH ORGANIZED LABOR: Journalistic Reflections on the Class War at Home by Steve Early by Steve Early

From Solidarity to Sellout: The Restoration of Capitalism in Poland
FROM SOLIDARITY TO SELLOUT: The Restoration of Capitalism in Poland by Tadeusz Kowalik

China and Socialism
CHINA AND SOCIALISM: Market Reforms and Class Struggle

Capitalist Globalization: Consequences, Resistance, and Alternatives
CAPITALIST GLOBALIZATION: Consequences, Resistance, and Alternatives by Martin Hart-Landsberg

Global NATO and the Catastrophic Failure in Libya
GLOBAL NATO AND THE CATASTROPHIC FAILURE IN LIBYA by Horace Campbell

Bush versus Chávez
BUSH VERSUS CHÁVEZ: Washington's War on Venezuela
by Eva Golinger


The Economic War Against Cuba: A Historical and Legal Perspective on the U.S. Blockade
THE ECONOMIC WAR AGAINST CUBA: A Historical and Legal Perspective on the U.S. Blockade by Salim Lamrani

Race in Cuba: Essays on the Revolution and Racial Inequality
RACE IN CUBA: Essays on the Revolution and Racial Inequality by Esteban Morales Domínguez

One Day in December: Celia Sánchez and the Cuban Revolution
ONE DAY IN DECEMBER: Celia Sánchez and the Cuban Revolution by Nancy Stout

Che Guevara: His Revolutionary Legacy
CHE GUEVARA: His Revolutionary Legacy by Olivier Besancenot and Michael Löwy

Revolutionary Doctors
REVOLUTION-
ARY DOCTORS: How Venezuela and Cuba Are Changing the World's Conception of Health Care by Steve Brouwer


Understanding the Venezuelan Revolution
UNDERSTAND-
ING THE VENEZUELAN REVOLUTION: Hugo Chavez Talks to Marta Harnecker by Hugo Chavez and Marta Harnecker


The Contradictions of 'Real Socialism': The Conductor and the Conducted
THE CONTRADIC-
TIONS OF "REAL SOCIALISM": The Conductor and the Conducted by Michael A. Lebowitz


The Socialist Alternative
THE SOCIALIST ALTERNATIVE by Michael A. Lebowitz

Build It Now
BUILD IT NOW: Socialism for the Twenty-First Century by Michael A. Lebowitz

The Work of Sartre: Search for Freedom and the Challenge of History
THE WORK OF SARTRE: Search for Freedom and the Challenge of History by István Mészáros

Social Structure and Forms of Consciousness
SOCIAL STRUCTURE AND FORMS OF CONSCIOUS-
NESS by István Mészáros


Beyond Capital
BEYOND CAPITAL: Toward a Theory of Transition by István Mészáros

Wage Theft, Wage as Theft
by Mazen Labban

I.

On Thursday, June 27th, fast food workers gathered outside City Hall in New York before a hearing on low wages and wage theft.  Some of the workers described to the reporters of the New York Times the difficulty of living on minimum wage, $7.25 per hour in the state of New York.  One worker, who washes dishes for $7.75/hr at one KFC restaurant in Brooklyn and earns $8/hr mopping the floor of another KFC restaurant in Queens, often found herself having to choose between buying food, paying the bills, or buying a MetroCard so that she can show up to work in order to earn that wage.1  Another worker, who earns $7.75/hr working as a shift manager at a KFC restaurant in Brooklyn recounted how her supervisor cheats her out of earned wages: her checks are often "hours short," and when she works overtime her supervisor clocks her out while she's still on the job to avoid paying her the overtime rate.  Instead, she receives multiple checks at "straight time" rate.2

Wage theft is pervasive in the fast food industry, in New York and elsewhere.3  Fast Food Forward estimates that 84 percent of workers in fast food restaurants in New York City have experienced one instance of wage theft in 2012; many have been subjected to multiple instances (and forms) of wage theft.4  Wage theft is not restricted to fast food workers, however, and is prevalent among non-union workers in a wide range of low-wage jobs across industries of all sizes across the US, including municipal and state governments.5  Although it is demographically extensive, wage theft is concentrated among immigrants, both with and without work authorization, Hispanic and Black Americans, and women, and most often among groups combining those characteristics, who are most likely to be employed in low-wage jobs.  Wage theft has increased with the increase in unregulated work and decline in union membership together with the decline in the capacity of federal and state government agencies to enforce fair labor standards.  Even though those trends may have enabled the spread of wage theft, they are not the causes of wage theft.  Wage theft is a method of cutting production costs which in some industries has become standard practice -- a strategy of increasing profitability by squeezing more unpaid labor from workers who are compelled to work for minimum and lower-than-minimum wages.

According to a survey by the National Employment Law Project, 68 percent of frontline workers in low-wage industries (i.e. excluding managers and professional and technical workers) in Chicago, Los Angeles, and New York City experienced at least one instance of wage theft in a given week in 2008.  On average, workers subjected to wage theft lost about 15 percent of their annual earnings.  As a group, workers in the three cities were robbed of more than $56.4 million per week, almost $3 billion during the year.6  Workers in low-wage industries in New York City alone were robbed of more than $18.4 million every week, almost $1 billion for that year.7  One billion dollars in stolen wages would reappear as one billion dollars in profits.  Because wage theft also costs state governments lost tax revenue, however, some states -- the tax-gatherers with a claim on unpaid labor -- have stepped up efforts to curb wage theft, presumably to protect workers but also to prevent employment tax avoidance.  According to one estimate, the state of New York loses $427 million every year in tax revenue from wage theft.8  So the Empire State enacted the Wage Theft Prevention Act (WTPA), a comprehensive law developed by a coalition of worker advocates led by Make the Road New York, in November 2010.  The law was put into effect in April 2011 despite lobbying by the New York State Restaurant Association against its passage.9  The WTPA criminalizes wage theft and protects workers who report violations from retaliation by their employers.  It requires employers to provide workers with a written notice at the beginning of February of every year that includes among other things the rates of pay of straight time and overtime, the payment period and the regular payday, and the "allowances taken as part of the minimum wage (tips, meal and lodging deductions)."  It also requires employers to notify workers about reductions in wage rates and to keep detailed payroll records for six years.10

Some of the provisions of the WTPA, such as liquidated damages, are meant to deter wage violations; but the law has not prevented wage theft.  The typical view is that the law, which makes New York the state with the strongest wage theft prevention measures in the country, is strong on the books but is not properly enforced because of lack of resources and personnel.  The solution accordingly is to dedicate more (financial) resources to the appropriate authorities to ensure the effective enforcement of the law: more investigators, speedier investigations and recovery of lost wages.11  Protection of wages and recovery of stolen wages are an important and urgent matter; there are structural forms of theft, however, that cannot be ameliorated by the WTPA or by an increase in the staffing of the New York State Department of Labor.  Before we get to that, however, let us look briefly at the forms of wage theft, drawing mainly on examples from New York City, and ponder for a minute how must the situation be for low-wage workers in other states if wage theft is so prevalent and egregious in the state that has the strongest wage theft prevention law in the country.

Wage theft takes many forms.  The simplest method of cheating workers out of their minimum wage is of course cheating them out of their whole wages -- by not paying them anything at all.  This is not uncommon, especially in the case of foreign workers who do not have authorization to work and who must continue to work on the promise of a paycheck under the threat of being reported to immigration authorities by their bosses.  But such wage theft is not restricted to unauthorized immigrants.  One of the most prevalent methods of paying workers below the minimum wage is the "shorted hours" by which the worker is not paid for all the hours she has worked.  There are many variations on this particular form of wage theft and it is more commonly exercised when the worker is paid a lump sum, say a daily or weekly rate, or when the worker is paid piece wages, i.e. per unit of work regardless of the time it takes to finish the task.  Workers are also shorted hours when they are (incorrectly, yet deliberately) classified as "independent contractors," hence "exempt" from overtime rates.  Here, employers get some help from the Fair Labor Standards Act, which exempts certain employees from overtime pay, the minimum wage, and child labor provisions of the Act.  Young farmworkers are exempt from all three provisions, which means that a capitalist farmer can exploit people under eighteen years of age for as long as he pleases and at the wage rate he fancies as long as those have the consent of their guardians.  Finally, employers short workers of their hours through the means of payment: when payment is in cash and/or off the books, or when payment is by means of checks that bounce.12  Shorting hours pushes wages below the minimum wage -- often far below the minimum wage.  One cook in Rhode Island, where the minimum wage was $7.40/hr in 2012, received $225 for 62-hour weeks, pushing her hourly wage to $3.63; a cleaner, also in Rhode Island, received $140/week as an "independent contractor," working seven hours every day of the week, thus depressing her hourly wage to $2.86.13  In New York City, 21 percent of low-wage workers were paid wages below the minimum wage ($7.15/hr) in any week in 2008; half of those were underpaid by more than $1/hr, and some by as much as $4/hr below the minimum wage; deliverymen working eleven to thirteen hours a day, six days a week, earned as little as $1.60/hr.14

Employers push wages below the minimum wage not only by subtracting hours but also by taking "improper deductions" from the worker's paycheck: subtracting money from paychecks without the worker's consent to pay for expenses that cannot be legally subtracted from wages such as deductions for meals not consumed, deductions for required uniforms and other equipment required for carrying out the work, cash register shortages (including money stolen by supervisors), deductions for bogus social security taxes, etc.  Some housecleaners have to pay for the ride that takes them to the houses they have to clean.  Delivery workers, who generally experience wage theft at a higher rate than other workers -- not to mention occasional thieving by robbers other than those in corner offices -- are often not reimbursed for job-related expenses such as gas money, cell phone bills, etc.  The aforementioned deliverymen suffered deductions from their paychecks as high as $200 for committing infractions such as letting the door slam when leaving the restaurant or not logging in a delivery.15  When it comes to delivery workers, the swindlers also get a little help from the law itself which mandates a lower minimum wage for "tipped workers" as long as they earn at least the minimum wage when their tips are added to the base pay.  For example, in New York tipped workers earn a "tipped minimum wage" of $5.65/hr, but must earn at least the current minimum wage of $7.25/hr when their tips are added.  Workers earning the tipped minimum wage are therefore vulnerable to two types of minimum wage violations: a regular minimum wage violation when they do not receive the minimum wage after the tips are added; and a tipped wage violation when the worker's base pay drops below the tipped minimum wage even if he earns the minimum wage after the tips are added.  Tipped workers are robbed of their tips quite often, but even when they are not, they are still subjected to wage theft when they are paid their tipped minimum wage from their tips.  For example, a worker receiving $7.25/hr after his tips are added is still swindled out of his earned wages when $4 out of the $7.25 come from his tips.  In all cases, the "tip credit," even when it is lawfully practiced, allows employers to lower the minimum wage legally and save money on labor costs, i.e. to increase their share of unpaid labor.16

Perhaps the most innovative form of wage theft today is the so-called "payroll card."  This is a form of theft by means of payment that is only slightly more elaborate than stealing wages by paying workers in cash off the books.  Payroll cards are prepaid debit cards that companies use as a means of paying hourly wages instead of a check or direct deposit.  Its ubiquity has prompted an investigation by the office of the Attorney General of New York State, who is also investigating the "wage practices" of fast food restaurants suspected of swindling workers out of their wages.  Nobody has yet called the payment of wages by means of prepaid debit card a form of wage theft, but the payroll card is just that: another form of wage theft except that in this instance unpaid labor accrues to the banker directly instead of getting there through the direct exploiter.  Certainly, as with other methods that reduce the wage, payroll cards increase the profits of the direct employer: by some estimates a company employing 500 workers could save $21,000 per year by paying wages in the form of payroll cards instead of checks.  But thieving in this case is generalized, demonstrating the class nature of exploitation.  Whether employers force workers to accept wages in the form of prepaid debit cards as a condition of employment is yet to be determined; but what is evident is that by paying wages in the form of payroll cards employers force workers to relinquish part of their wages to the cards' issuer as a condition of access to their wages.  One worker at McDonald's who earns $7.25/hr pays JPMorgan Chase between $40 and $50 every month in fees associated with his payroll card -- i.e., while at McDonald's that worker works seven hours per month for JPMorgan Chase for free.  This could all look like chump change for the banks that are too big to bother, but payroll cards, unlike regular debit and credit cards, are outside the purview of regulations on fees that have cost the banks billions in lost income.  The payroll card is generalized wage theft that could become a new site of accumulation: $34 billion was deposited into active payroll cards in 2012, and it is expected that $68.9 billion in wages will be loaded onto payroll cards by 2017.17

Another method by which employers swindle workers of earned minimum wages involves requiring them to work off the clock -- in other words, forcing workers to work for free without even having to pretend that they are paying them for the work they perform.  Off-the-clock work involves working outside the regular shift, including preparation for work or training other workers, but it often happens that employers force workers to punch out during their regular shift and continue to work.  This also includes working during earned meal breaks.  Off-the-clock work, however, is a special instance of a more fundamental hold on the worker's time that finds expression in its opposite: when the worker is forced to be present at the place of work but is required not to work.  Fast Food Network reports that fast food workers are often subjected to "waiting to clock in":

Specifically, when workers arrive on time at the restaurant for a scheduled shift, they are required to wait to clock in until instructed by management, which can be a few minutes to an hour after their shift was supposed to start.  Workers are not paid for the time spent waiting, and often they cannot leave the restaurant because they have to be nearby in case business picks up.18

The same with car washers who work on and off for six hours during a twelve-hour work day and are only paid for those six hours although they are required to be present at the work site all day.  This form of off-the-clock sequestration is a form of wage theft accomplished by forcing the worker to stay on the premises but denying her paid work, forcing her not to earn a wage while on the job while simultaneously preventing her from using her time freely.

Finally, employers deploy several methods to avoid paying overtime rates: plain theft by paying workers "straight time" rate for hours above the forty-hours-per-week limit.  In some instances workers are paid a lump sum for work performed overtime at rates below the minimum straight time hourly wage; in other instances they are shorted of overtime hours and not paid at all for overtime work.  The swindlers can perform miracles and make overtime hours disappear by creative accounting: moving overtime hours from the paycheck of one week to the next so that they reappear as straight time hours.  Employers split paychecks so that all hours worked over the forty hours of straight time appear as straight time hours, sometimes paying the worker multiple checks under different names.  Paycheck splitting is commonly practiced on workers who work more than 40 hours per week at different locations operated by the same employer or franchisee; yet, even workers who work overtime in one location receive multiple paychecks at straight time rates.  By splitting checks the employer effectively multiplies the working day by multiplying the workforce without adding a single additional worker to it.  The same with nonpayment of overtime more generally.  It is no surprise therefore that it is the most ubiquitous form of wage theft.  Its ramifications, however, reach beyond the reduction of wages -- it is an indication of how wage theft is but one instrument in the intensification of exploitation by prolonging the working day.  The limitation of the working day, as Marx told the First International, is "the first preparatory step to the emancipation of the working class."19  Nonpayment of the overtime rate, which since the nineteenth century was intended to discourage employers from prolonging the working day, is effectively a prolongation of the working day without a trace of labor performed above the 40-hour limit.  Some workers report working 70- to 80-hour weeks without receiving overtime, which amounts to a doubling of their working day.  Here also what is stolen from the worker is not only his wages.  The working day has elastic boundaries but ultimate limits determined by the vital force of the worker whose exhaustion cannot exceed certain limits without perishing.  But the "tyrannical usurpations of capital" are not predisposed to limits on profits and capitalists will always try to stretch the working day to its physical limits and even beyond what is physically possible: "A quick succession of unhealthy and short-lived generations will keep the labour market as well supplied as a series of vigorous and long-lived generations."20

II.

Employers can cheat their workers out of earned wages because the worker is paid for the work she agrees to perform for a definite period only at the end of that period and after the work is performed to the satisfaction of the employer.  It is characteristic of the capitalist mode of production that the apparent purchase of labor and the payment for it do not coincide.  This has consequences even if the capitalist pays the wages stipulated in the contract: until the wages are paid the worker is compelled to live on savings or on debt.  With an official average personal savings rate of 2.5 percent per capitain the first quarter of 2013 -- i.e. for the imaginary statistical average American who earns an income of about $33,000 per year -- we can assume without much hesitation that workers earning $11,000 per year have a negative personal savings rate and are compelled to live on debt.  Indeed, without consumer debt (credit-card and mortgage debt) a large number of working households in the US would not have been able to subsist against secular decline in real wages over the past forty years (and in the process transfer more of their earnings to the banks).  In principle, workers should be able to pay their debt if the wages they receive at the end of the work period are commensurate with their consumption for that period.  But this is often not the case and when wages fall below what is necessary to maintain working households "in working condition" workers are plunged into chronic debt, which itself becomes an effective instrument for disciplining workers into working longer hours and maintaining multiple, low-paying precarious and temporary jobs.  Debt, however, is a luxury not all workers can afford and, for those in the lowest-paying jobs, not receiving wages sufficient to maintain the level of consumption necessary for keeping them in working condition translates into hunger and homelessness.  The greatest irony is that during the working period the worker is in fact a creditor to the employer: by agreeing to work for a wage the worker advances credit to the capitalist.  During the working period the employer is in the worker's debt until the wages stipulated in the contract are paid in full.  An employer who does not pay the wages agreed upon defaults on his debt to the worker.  But that's a kind of default that does not rattle legislative cages.

At a more fundamental level, however, employers cheat their workers by the very act of employing them as wage workers.  The wage relation, the central mechanism that constitutes the capitalist mode of production and without which capitalism will perish, is itself a form of theft.  "On the surface of bourgeois society," Marx writes at the beginning of the section on wages in the first volume of Capital, "the worker's wage appears as the price of labour, as a certain quantity of money that is paid for a certain quantity of labour".21  The wage appears as the price of labor precisely because the worker receives her wages after she has performed her labor; and because it appears that the wage is exchanged for labor it also seems as if all the labor performed has been paid for at the end of the period.22  Something else happens beneath the surface, however, beyond the appearance of equal exchange and quite different from it, for if the labor of one day exchanged for an amount of money equal to the product of one day the basis of the capitalist mode of production would vanish.  The economists may want to believe otherwise but the capitalist knows it because the capitalist knows that he cannot make profit without buying cheap and selling dear.  The capitalist knows that he cannot become a capitalist unless he obtains something in excess for what he has given in exchange, something for which he has given no equivalent in exchange.

What the worker sells in the labor market is not her labor but her labor-power: her capacity to work.  The capacity to work exists in the living individual and its availability as a commodity presupposes the reproduction and maintenance of that individual as a possessor of labor-power as a commodity (which also means the separation of worker from the means of production and subsistence).  Labor-power comes into being, however, only when it is exercised in labor, an activity during which the worker consumes "muscle, nerve, brain, etc." which must be replenished if the worker is to repeat the same activity with the requisite health and strength.  Thus the wage that the worker receives for performing this activity must be sufficient to maintain her in her "normal state as a working individual."  In other words, the exchange value of labor-power must be equivalent to its cost of production, to the exchange value of the commodities necessary for the reproduction of the worker's capacity to work.  For capital to exist, however, the worker must produce exchange values in excess of the equivalent of the exchange value of her labor-power.  The worker must perform surplus labor, labor in excess of what is necessary for the reproduction of the worker, which is realized as surplus value and profit (and rent, interest, taxes, etc.).  The origin of surplus value is the difference between the exchange value of labor power (wage) and the exchange value of the commodities that labor-power produces.  Capital becomes capital when it appropriates that excess for which it gives no equivalent: "Surplus value in general is value in excess of the equivalent," the equivalence of wage and labor-power.23

Thus, even when the employer does not directly steal wages but pays them in full and on time, he still appropriates labor for which he has paid nothing: surplus labor, or forced labor.  The wage relation erases all the traces of unpaid labor: "All labour appears as paid labour. . . . even surplus labour, or unpaid labour, appears as paid".24  Beneath the appearance of equal exchange, there is a relation of inequality and compulsion, an unequal exchange between a class that possesses money and another that is compelled to work for free, above what is necessary for its own existence, in order to continue to exist.  The wage therefore is itself a form of theft; wage theft, a robbery of what is left after the theft of surplus labor.

Marx makes several assumptions in explaining the theory of exploitation, two of which regarding wages are relevant to the question of wage theft.  The first is that labor-power is sold at its value, i.e. the wages paid to the worker are sufficient to maintain the worker in her normal state as a worker in accordance with a certain standard of living.  The willingness of the worker to work presupposes a level of consumption that is irreducible to the bare necessities and which satisfies needs and desires springing from "historical tradition and social habitude."  Thus, the wage, hypothetically, should meet not only the worker's absolute physical needs but also the "habits and expectations" with which the working class has been formed, i.e. needs that have historical, social, and cultural determinations, as well as the cost of training and educating the worker as a worker with particular skills.  The wage must also maintain the worker's "replacement," her offspring, to reproduce the proletarian race and perpetuate the existence of labor-power on the market.25  The second assumption -- which itself is a dual assumption -- is that the price agreed upon in the contract between worker and capitalist is paid in full at the point of purchase of labor-power.26  In other words, the worker receives the wage stipulated in the contract in its entirety before performing the work.

Marx makes those assumptions in order to criticize bourgeois political economy on its own terms.  Marx shows, for example, that the historical and social elements entering the value of labor-power can be extinguished altogether so that nothing remains but the physical element, and that at times wages can even be depressed beneath the "mere physical minimum" with the difference necessary for the physical perpetuation of the working class made up by Poor Laws.27  Marx also shows that the exchange value of labor-power drops below its value in times of crises and large-scale unemployment -- when there is an abundance of workers on the labor market because of processes of proletarianization (commodification of labor-power by dispossessing peasants, craftsmen, and small shop owners of their means of production and exchange) and deskilling industrial workers by their replacement with machines.28  Capitalists always seek to buy labor-power below its value but Marx brackets such considerations in his critique, despite the important part which such methods play in practice, to remain consistent with the assumption that all commodities are exchanged at their full value.29  For Marx the point is to demonstrate that profit arises from the exchange of commodities, including labor-power, at their real values -- to locate the origin of profit in unpaid labor.

Those assumptions must be relaxed, if not dispensed with altogether, in the critique of present-day capitalism.  The wage relation "in its pure form" should not exclude the two methods that Marx brackets in his critique of political economy -- cheating workers of their wages and paying wages lower than what is necessary for the reproduction of the working class -- as methods of exploitation and accumulation as much as the wage relation itself.30  Indeed, for Marx even wages that can only purchase the "physically indispensable means of subsistence" are already below the value of labor-power "since under such circumstances [labor-power] can be maintained and developed only in a crippled state."31  Under such circumstances the reproduction of labor-power "can take place only in a stunted form."32  A wage reduced to equivalence of mere physical subsistence is already a wage below the value of labor-power, a form of wage theft.

As Barbara Ehrenreich demonstrates in her firsthand experience of low-wage labor, working in different professions for a variety of employers in different places in the US, it has become impossible in the US today to subsist on the minimum wage.33  The wages paid to millions of workers in minimum-wage jobs are insufficient to meet the mere physical needs of the individual worker, let alone reproduce the race of workers.34  One indication of the decline of wages below the value of labor-power is the dependence of working families on emergency food assistance.  Fifty-eight percent of households (sixty-two percent of households with children) receiving food assistance through the Supplemental Nutrition Assistance Program (SNAP) are working households, i.e. households with at least one non-disabled working adult.35  The number of working households participating in SNAP has risen from about 2 million in 2000, taking off especially after the crash of 2008, rising from a little above 3 million to 6.4 million in 2011.  The increase in the number of working households receiving food assistance has been accompanied by an increase in the rate of participation of eligible working households in SNAP, which rose from forty-three percent in 2002 to around sixty-five percent in 2010.  In short, around two thirds of working households in the United States do not earn enough wages to feed themselves and their families, and they therefore need the support of the state to maintain themselves physically.  Indeed, SNAP itself was designed to support the food purchasing power of low-income households -- a free gift from the state not only to the capitalists paying low wages by helping them purchase labor-power below its value without annihilating the working class, but also to the agrofood industry.36  SNAP keeps low-wage workers in the market by putting money in their hands to purchase the necessities of subsistence, and, contrary to what the representatives of capital in the US Congress would have us believe, SNAP keeps the workers in the labor market: ninety-six percent of working households that receive food assistance do not cease to work.  Yet, for more than fifty percent of households participating in SNAP its benefits are redeemed in the first two weeks of the month, so they have to turn to food banks and other emergency food assistance programs for at least half of the year.37

Thus workers in low-wage industries are already cheated by earning wages below the value of their labor-power, and wage theft pushes the wage even lower than what is necessary for subsistence.  What is ultimately stolen from the worker is not simply an amount of earned income or unpaid labor, but the worker's very life.  In the strictest sense labor-power, whose existence is inseparable from the existence of its possessor, is the worker herself -- the worker's "muscles, nerves, bones and brains."  Thus by selling her labor-power, the worker sells her living self, her life-activity, to another person piecemeal -- eight, ten or twelve hours at a time, "one day like the next" as a young Marx put it.38  Part of the worker's life-activity is paid for, so that the worker and her race can continue to exist as workers; but another part is appropriated by the capitalist for free.  The lower the wage, the larger the part of the worker's life-activity appropriated by the capitalist, and by buying labor-power below its value the capitalist appropriates for free not only surplus labor, the part of labor above what is necessary for social reproduction, but part of the labor that is necessary for the worker's existence.  The capitalist who buys labor-power below its value steals the life-activity necessary for the reproduction of the living worker, the worker's life.  Wage labor is already an act of robbing the worker of her life-activity; wage theft is an intensification of this robbery and of the rate by which life is squeezed out of the living worker.  Like the prolongation of the working day, the theft of wages accelerates the exhaustion of the worker's vital force, not in this case by making her work above her physical limits but by exchanging her labor for a wage beneath the mere physical minimum, beneath what is necessary for her existence.

The capacity to work does not exclude the capacity to struggle against the conditions of work.  The workers' struggle against wage theft has intensified in the last decade and although it has mainly taken a legal form -- legislation to protect workers from wage theft and lawsuits brought against employers to restore unpaid wages, mostly stolen through nonpayment of overtime -- workers in low-wage industries have also started organizing to agitate beyond the stopping of wage theft.  Hence the growth of the Service Employees International Union since the late 1990s, enlisting more members and organizing new workers in low-wage service sectors.  Fast Food Forward, a coalition of fast food workers, is currently agitating for improvement in the working environment, a wage rate of $15/hr, and the right to form a union among fast food workers in New York City -- as fast food workers recently went on one-day strikes in Chicago, Detroit and Flint, Kansas City, St. Louis, and Washington.  Low-wage labor organization is crucial in the defensive struggle to stop wage theft, but also for improving the lot of the workers more broadly: for improving working conditions, protection against employer retaliation, and raising the living standards of workers.  Because the willingness to work presupposes a level of consumption that is irreducible to the bare necessities, workers can expand their needs and assert them as consumers confronting capital as equal owners of money.  This gives workers "an entirely different importance as agents of production" since capitalists must stimulate effective demand for their commodities -- demand backed up by purchasing power.  In the struggle with capital, therefore, workers can expand the sphere of their needs, desires, and pleasures and increase their "share of civilization" by increasing their purchasing power.39

A general rise in wages does not only improve the lot of workers in certain industries but it can also inflict serious harm on capitalists as it eventually can lead to a general decline in the rate of profit.40  For that reason, however, the struggle for higher wages faces an obstacle because the wage increase is "confined within limits that not only leave intact the foundations of the capitalist system, but also secure its reproduction on an increasing scale."41  Wages can rise as long as they do not halt profitability and accumulation; if wages threaten profitability in one sector or one place, capitalists move their capital elsewhere, accumulation slows down, wages decline and the ranks of the "industrial reserve army" swell again.  The struggle therefore must not stop at the defensive demands for higher wages and must cross the economic limit -- make the leap to the political struggle against capitalism: the struggle to abolish the conditions that compel workers to exchange their creative capacities for a wage in order to live.  As long as labor takes the form of wage labor, as long as the worker is compelled to work for a wage, the worker's very existence is dependent on the production of the very power that "vampire-like, lives only by sucking living labour, and lives the more, the more labour it sucks."   And suck it does -- very hard.  The struggle against wage theft must become the struggle against wage labor, the struggle to abolish the conditions that compel workers to work for less than is necessary for their existence as workers, against the conditions under which the producers of food from farm to franchise cannot feed themselves and their families -- the struggle to abolish the paradoxical conditions that compel workers to relinquish their life so that they may continue to live.  The capacity to work should not exclude the capacity to refuse to work and to revolt -- to liberate the creative capacities of labor from the shackles of capital accumulation.

 

1  E. C. Gogolak (2013) City Council hears plea from Fast-Food workersNew York Times 28 June.

2  M. Powell (2013) Making $7.75 an hour, and figuring there's little to lose by speaking outNew York Times 2 July.

3  See Fast Food Forward (2013) New York's Hidden Crime Wave.  Fast Food Forward, New York.  For San Francisco, The Chinese Progressive Association (2010) Check, Please! Health and Working Conditions in San Francisco Chinatown Restaurants.  The Chinese Progressive Association, San Francisco, CA.

4  Fast Food Forward, op cit.

5  See K. Bobo (2009) Wage Theft in America: Why Millions of Working Americans Are Not Getting Paid - And What We Can Do About ItNew York: The New Press.

6  A. Bernhardt et al. (2009) Broken Laws, Unprotected Workers.  The National Employment Law Project, New York.

7  A. Bernhardt, D. Polson and J. DeFilippis (2010) Working Without Laws: A Survey of Employment and Labor Law Violations in New York City.  The National Employment Law Project, New York.  The numbers above refer to workers covered by employment and labor laws -- they do not include workers exempt from such laws: independent contractors, and workers hired as such, e.g. in-home care workers, 88 percent of whom earn less than minimum wage, according to the NELP survey.

8  T. Judson and C. Francisco-McGuire (2012) Cracking Down on Wage Theft: State Strategies for Protecting Workers and Recovering Revenues.  Progressive States Network, New York.

9  The National Restaurant Association -- the union of the fast food capitalists -- has also lobbied in several states against increase in the minimum wage and other initiatives to improve working conditions in the industry: paid sick leave and health care.

10  See New York State Department of Labor, Wage Theft Prevention Act at <www.labor.ny.gov/formsdocs/wp/P715.pdf> (last accessed 23 July 2013).

11  See for example D. Axt (n.d.) White Paper: End Wage Theft, Stop the Billion Dollar Swindle.  Make the Road New York, New York.

12  One employee of Wendy's in Brooklyn has had his paycheck bounce five or six times, and was charged by his bank a $12 fee for every bounced check plus an overdraft fee of about $30 -- together almost 6 hours of his pay.  Fast Food Forward, op cit.

13  A. Quinn et al (2013) Shortchanged: A Study of Unpaid Wages in Rhode Island.  Fuerza Laboral/Power of Workers, Central Falls, RI.

14  Bernhardt et al (2010), op cit.  On the latter, see also S. Greenhouse (2008) For $2-an-hour restaurant deliverymen, a $4.6 million judgmentNew York Times, 21 October.

15  Greenhouse, op cit.

16  Fast Food Forward, op cit.

17  J. Silver-Greenberg and S. Clifford (2013) Paid via Card, Workers Feel Sting of FeesNew York Times 1 July.

18  Fast Food Network, op cit.  p. 6.

19  K. Marx (1976) Value, Price and Profit, in Wage-Labour and Capital & Value, Price and Profit.  International Publishers, New York.  pp. 17-18.  Marx ascribes this proclamation to the utopian socialist Robert Owen.

20  Ibid.  p. 57.

21  K. Marx (1977) CapitalVol. 1.  Vintage Books, New York.  p. 675.

22  See Value, Price and Profit, pp. 42-43.

23  K. Marx (1973) Grundrisse.  Vintage Books, New York.  p. 324.

24  Marx, Capital.  p. 680.

25  It should be remembered that the adjective proletarian derives from the Latin proletarius, referring to a (Roman)propertyless citizen who served the state by producing offspring (proles).

26  Marx, Capital.  p. 279.

27  Value, Price and Profit.  p. 58.

28  When the machine replaces the worker, "The section of the working class thus rendered superfluous by machinery [the industrial reserve army] . . . swamps the labour-market, and makes the price of labour-power fall below its value" (Capital, p. 557).

29  Marx, Capital.  p. 431.

30  These two different methods of exploitation are independent of each other, but they are combined in the exploitation of non-unionized workers in low-wage industries.  Hypothetically, one worker could be cheated out of earned wages but still earn enough money to pay the rent and the bills, and maintain himself and his household.  That worker has been cheated by not receiving the wage agreed upon in his contract, but he could still have received wages sufficient to procure the necessities of existence.  He could in another instance receive the wage agreed upon in his contract in full without improper deductions and other wage violations, but still not earn enough to pay his bills and obtain the necessities to maintain himself and his family as potential workers.  In that instance the worker has earned full wages that however fall below the value of his labor-power.

31  Marx, Capital.  p. 277.

32  Ibid.  p. 431.

33  B. Ehrenreich (2001) Nickel and Dimed.  Metropolitan Books, New York.

34  The more important implication of Ehrenreich's work is that workers can only do so by improvising forms of socialism, or more precisely realizing the latent socialism that exists among the working class and the poor who are often compelled to find and devise ways of cooperation outside the capitalist market --  something that Engels already recognized during his early days in Manchester (See his The Condition of the Working Class in England, available at <www.marxists.org/archive/marx/works/1845/condition-working-class/>.

35  D. Rosenbaum (2013).  The Relationship between SNAP and Work among Low-Income Households.  Center on Budget and Policy Priorities, Washington, DC.

36  The first declared purposes of the Food and Nutrition Act of 2008 are "To strengthen the agricultural economy" and "to help to achieve a fuller and more effective use of food abundances" -- i.e. guarantee a market for the products of the agrofood industry, besides providing "for improved levels of nutrition among low-income households" through a "program of food assistance to be operated through normal channels of trade," i.e. within established markets.

37  L. Castner and J. Henke (2011) Benefit Redemption Patterns in the Supplemental Nutrition Assistance Program.  U.S. Department of Agriculture, Food and Nutrition Service, Office of Research and Analysis, Alexandria, VA.

38  K. Marx (1976) Wage-Labor and Capital in Wage-Labour and Capital & Value, Price and Profit.  International Publishers, New York.

39  Marx, Grundrisse.  p. 287.

40  See Marx's succinct explanation of this relation in Value, Price and Profit, op. cit.  pp. 13-16.

41  Marx, Capital, p. 771.


Mazen Labban is Visiting Assistant Professor at the Department of Geography of Rutgers University.
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