Tuesday, September 01, 2009

Exploitation has increased during this crisis

National Accounts data released by the Australian Bureau of Statistics today shows that whilst hours worked have fallen sharply in the past year, productivity has increased.

In the non-farm sectors, hours worked have fallen by 2.8% whilst productivity has risen by 0.8%.

In general terms, this has meant that there has been an intensification of work associated with the production of goods and services.

(Above, the shsare of GDP going to wages has declined overall by a factor equal to 10% of GDP. The blue line is real wages, the red line above is labour productivity. The gap between the two has gone to the rich).
In so far as human labour power is utilized to manufacture or produce saleable commodities, a value can be attached to the commodity by adding together the labour costs for which a worker is actually recompensed through wages, and which require a certain number of work hours to create, and any additional value created in what then becomes effectively an unpaid or unrecompensed number of additional working hours.

The latter is a surplus value and is the source of profit, but the sale of the commodity is necessary before the profit can be realized. And of course, it goes to the capitalist (corporate or individual) and not to the worker.

Essentially in this crisis, ways have been found to reduce the number of hours that a worker must perform before the value of his or her wages has been created – socially, with other workers in nearly every work situation.

Between June 2008 and June 2009, 117,800 full time male jobs and 3,100 full time female jobs were lost. At the same time, 39,500 part time male jobs and 49,500 part time female jobs were created.

That is, more and more workers are employed, just like parts being brought into a manufacturing plant, on a just-in-time basis. Pay rates for casual labour are notoriously lower than those for full-time permanent employees (into whose wages things like sick leave, holiday pay and other entitlements) are factored. Thus, workers don’t have to work so long to manufacture the value of their wages, and a proportionately larger amount of time can be extracted as surplus value particularly when a reduction of hours is associated with speed-ups, technological innovation and other work intensification measures.

The data also shows that “the share of the economy going to wages has increased…whilst the profits share has fallen”.

But this doesn’t mean that higher wages are being paid.

Surplus value has to be realised through sales.

At the moment, there is too much for sale, or overproduction.

At the same time massive amounts of purely speculative, fictitious capital held by banks and finance corporations in the form of credit default swaps, residential housing mortgages, collateralised debt obligations and a wide range of derivatives have been wiped out.

This restricts the capacity of banks to extend credit to worker and capitalist alike.

For the capitalist, it means getting rid of excess stock quickly and at whatever price it can be realised. The practice of running down stock inventories becomes widespread.

(Above, change in inventories 1995-2009, ABS)

On the one hand sales volumes drop because workers can’t get, or are unwilling to seek, credit. People become aware that their cards are maxed out and take a breather. (And they need to: the proportion of household debt as a percentage of disposable income had risen from 42% in 1980 to an overloaded, maxed-out 102% in 2000, and is higher again nearly a decade later.)

On the other hand sales values decline as prices drop to encourage the running down of inventories.

The combination of the two means that the realisation of surplus value through sales at a higher price is threatened. That means that profits drop. Although higher wages are not paid and real wages might even dip a bit, it is possible that the proportion of GDP going to wages increases ahead of that going to profits because the fall of the value of the latter outpaces the fall in the value of the former.

Hence, we can say that exploitation in Australia has increased during this economic crisis: the proportion of surplus value being extracted from Australian workers’ labour power has increased. The greater share of GDP going to wages as compared to profits is not because of higher wages or even maintenance of real wages measured against the CPI. It means no social or economic advantage to workers.

Why do we put up with this?

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