Wage Labor and Freedom Under Capitalism
Bowles et al. have argued that wage labor is only problematic if the employment contract is incomplete: problematic, that is, if employers—who control the surplus product and have incentives to extract as much production from their employees as possible—use their disproportionate power and bargaining leverage to create unfair terms of employment that impose private costs on workers—who have no choice but to work for a living and, thus, may have no choice but to concede to the terms. We have also seen from thinkers like Keynes that this phenomenon in principle is only a concern when unemployment rates persist and a growing number of unemployed people compete for scare numbers of jobs; that when we approach full employment employers lose this leverage. Friedman, in a similar vein, has emphasized that the economic opportunities and social mobility possible under capitalism and its system of voluntary exchanges of labor empowers individuals to find gainful employment. This is because, says Friedman, capitalism’s central principle of competition and free markets means that no worker has to bear unfair or exploitative employment contracts: their freedom to find work gives employees bargaining leverage and the opportunity to secure a different job if necessary.
Sandel and Cohen, however, give a very different impression of what wage labor under capitalism can be like—suggesting that selling one’s labor to a capitalist can be coercive, exploitative, and contrary to our commitment to a democratic principle of self-government.
Does wage labor under capitalism impede freedom? In other words, is it possible to reconcile this requirement of capitalism—of having a large workforce exchanging its labor for a wage—with our commitment to individual liberty and self-government? Why or why not? In answering this question, you must discuss one real-world example that illustrates your conclusion.
PLEASE NOTE: with this sort of normative question, where there is no clear right or wrong answer, you must do more than merely state your opinion. This would fundamentally fail to satisfy the expectations of this assignment. Your task is to take a stand on the issue and to defend this position by writing an educated and informed response, incorporating specific ideas from the readings that support your thesis.
22 responses to “Prompt 9 (Gov’t/Capitalism 2015)”
Wage labor as discussed by numerous thinkers and authors have said it to impede individuals’ freedoms and others have also thought it to not impede freedom. Wage labor does not impede ones freedom because it is a voluntary act. If coercion is involved than it can be considered to impede someone’s freedom.
Without wage labor there would be a problem with upholding the capitalist beliefs and the labor market would eventually crumble. The whole motive of a corporation or a business is to make a profit (Blodget, 2012). This means that the company would pay the least amount possible for resources, this includes the resource of labor. For example, India who has one of the cheapest labor conditions in the world has seen mass amounts of in sourcing because of how much it costs to pay for labor. Their employees make on average $0.48 an hour, and this can attribute to the mass amounts of poverty that the country has (Said, 2013) The lack of wage labor has created a country that is partly developed, but then has the complete contradiction with people living on the side of the road in makeshift houses. If wage labor were nonexistent the whole country would see a mass poverty and the free market economy would eventually fail. A capitalist society cannot function without a working class, if the classes were to be abolished the country would be communist.
On the other side the people who are in the working class are held to do wage labor because they have no other options. In this regard it impedes their freedom because it doesn’t allow them to move out of that socio economic class. The restraint to that particular economic class is what might be considered wage labor impeding the freedom of the people.
Blodget, Henry. “We Need To Stop Maximizing Profit And Start Maximizing Value.” Business Insider. Business Insider, Inc, 08 Dec. 2012. Web. 20 Apr. 2015.
Said, Sammy. “Countries with the Cheapest Labor.” TheRichest The Worlds Most Entertaining Site Countries with the Cheapest Labor Comments. The Richest, 04 Jan. 2013. Web. 20 Apr. 2015.
Response to Cole
I have to agree with Cole here on the statement that “without wage labor….. capitalist beliefs and the labor market would eventually crumble”. Without have economy backed by a form of currency the system would devolve into that of barter and trade. While that form of interaction between buy and seller is fine on a small scale, on a global economic scale it is nearly impossible. There needs to be a set agreed upon exchange of the value of goods and that is exactly what money does and the primary way money is used is through wages and pay.
Wage labor can lead a capitalist country, or company, down a bad path where they are paying their employees 48 cents an hour. The low pay and high work hours causes the employee to be solely dependent on their employer to provide the funds for them to live a decent life. When they are only able to live by following the whim of another person than they are no longer free. Wage labor is not the cause of the infringement on this basic right to freedom. The problem is, as Cole stated, companies paying the least amount possible for resources (labor).
If countries would put in place safe guards for their citizens, such as a minimum wage, then they would not have to live paycheck to paycheck. Wage labor does not impede on individual liberty all on its own, the issue is the capitalist paying it out. If the wages were high enough than the employees would not have to be dependent solely on their employers and they would have their freedom to with their time as they pleased.
Wage Labor Doesn’t Have to Be Coercive
Response to Cole
Cole makes the argument that wage labor is necessary for the economy to function because we need a working class. We can however have a working class without wage labor. Wage labor, according to Sandel and Cohen, is exploitive and goes against our democratic principles. It often leads to working because it is needed to survive and does not breed fair labor practices. If there was less wage labor and more fair business practices then there might be an even bigger working class. Today, much of the working class is nonexistent because jobs have gone abroad. People in the United States feel they deserve more than wage labor. If we ended wage labor, then more of our people would want to do the jobs that we ship overseas.
Today, we see huge salary disparities between men and women because women are forced to do wage labor. “Given that women are disproportionately responsible for child care and home duties, it’s not surprising that women are more likely to trade compensation…”, meaning that women are forced to accept lower salaries in order to provide for their families (Beggs). In this case, wage labor is being forced on these women, which hurts the whole family because they are being paid less than if they were men.
Mac McClelland describes her experience working a wage labor job at an Ohio warehouse as having “conditions that were surprisingly demoralizing and dehumanizing”. She describes how she is constantly pushed to worker faster under threat of being fired for any mistake. The other people she works with have no choice but to work there. They have no rights and make barely enough to support their family. This creates a cycle like Cole suggests because they aren’t making enough to move up in class, and under threat of being fired have to accept the salary they are given.
Because wage labor creates an unfair work environment that hurts the worker, I disagree with Cole. Wage labor does impede ones freedom because you are not free if you are forced to work in a job that does not give you equal pay or proper labor practices. You may not be coerced into taking the job, but you are constrained to stay in order to provide for yourself and your family.
Beggs, Jodi. “‘Equal Pay for Equal Work’ Isn’t so Simple – The Boston Globe.” BostonGlobe.com. 16 Jan. 2015. Web. 24 Apr. 2015.
McClleland, Mac. “I Was a Warehouse Wage Slave.” Mother Jones. 1 Mar. 2012. Web. 24 Apr. 2015.
Human, Arguably Inhumane, Survival of the Fittest
Response to Cole
I agree with Cole to the extent that wage labor is somewhat voluntary, but this term voluntary used in this sense gets a little muddled. We have all had enough experience with the capitalistic system to know that there are masses of people that work long hours at menial jobs they are dispassionate about for little salary. Oftentimes people can get ‘stuck’ in this state of work for longer than they desired or intended. In class we have been working with the definition of wage-labor as a worker selling his labor to an employer for money, but in a book entitled “Wage-labor and Capital” by Karl Marx and Friedrich Engels they make the distinction that workers are exchanging their “labor-power” which “is a commodity, no more, no less so than is sugar. The first [labor-power] is measured by the clock, the other by the scales” (Marx, Engels 22-3). This may seem like a insignificant distinction but I find it helpful in understanding the nature of the labor system better. Thinking about this in terms of this distinction more deeply it would make sense that a person flipping hamburgers or picking up trash is paid less than a marketing strategist or CEO (I am not saying this is fair or preferable); the labor-power of the hamburger flipper or trash picker upper is less powerful, so to speak, than the marketing guy or CEO; their overall contributions to the institutions they are working for are disproportionate. It may seem like I am beating at a dead horse with this point but I have found this thought process somewhat insightful and profound and I am trying to articulate it. As these authors go on to say, “labor-power is a commodity which its possessor, the wage-worker, sells to the capitalist. Why does he sell it? In order to live” (Marx, Engels 24). This perspective dehumanizes people to the state of commodities; each person’s commodity is what skill set he possesses, and the natural fact of life is certain people are more skilled than others, certain commodities more useful and beneficial. Intuitively people find this perspective difficult to accept because it is harsh; if you are skilled enough, you can exercise that skill to your own purpose and benefit, but if you are of average or below skill chances are you will be forced to give your best effort (which is not that good) towards someone else’s cause. Everybody wants to be their own boss, everybody wants to be a king, but not everyone can and this upsets people.
I understand these blog assignments are supposed to be getting at specific arguments but I always end up turning them into sort of thought experiments, partly because these questions are so broad and complex. If I had to state an argument it would be wage-labor is a necessary evil and it somewhat parallels the biological idea of ‘survival of the fittest.’ As the authors above continue, “putting of labor-power into action, i.e., the work, is the active expression of the laborer’s own life. And this life activity he sells to another person in order to secure the necessary means of life. His life-activity, therefore, is but a means of securing his own existence. He works that he may keep alive. He does not count the labor itself as a part of his life; it is rather a sacrifice of his life. It is a commodity that he has auctioned off to another. The product of his activity, therefore, is not the aim of his activity. What he produces for himself is not the silk that he weaves, not the gold that draws up the mining shaft, not the palace that he builds. What he produces for himself is the wages, and silk, gold, and palace are resolved for him into a certain quantity of life” (Marx, Engels 24-5). I apologize for the extensive quotation but I feel it sums up my ‘argument’ well; I do not feel comfortable making a judgement on the nature of things, for they just are, so I choose to accept them. But I think this description of the wage-labor system is spot on, and oftentimes human beings assume they deserve or feel entitled to ‘more;’ in other words people feel like human existence should extend past the daily struggle in their environment to acquire the necessities of life that the rest of the species of the world go through daily. I guess this would be the counterargument to my tentative position–that people are not animals and labor shouldn’t be humans’ primary life activity. A way to think about it is the idea of the ‘unencumbered self’ as Sandel discusses it saying, “for the unencumbered self, what matters above all, what is most essential to personhood, are not the ends we choose but our capacity to choose them” (Sandel 86). The work, wage-labor, life activity, whatever you want to call it, for the average worker is a process he doesn’t prefer which only produces a limited amount of wages that likely only barely provide the ability to buy the bare essentials (food, water, shelter, etc.) and this is depressing. To sort of return to Cole’s discussion and relate it to the Marx and Engels discussions, in this sense labor is not ‘voluntary’ for we are all stuck in the biological system of survival and some are more successful, and this capitalistic system has set it up to where the majority of people have to do boring stuff they don’t like very much to acquire the necessities for life. I know this response is very jumbled, broad, and seemingly disjunctive but my attempt is to contemplate and consider the system, not necessarily to judge it, but to sort of come to terms with it.
Marx, Karl and Friedrich Engels. Wage-labor and Capital. New York: New York Labor News Company, 1902. Print.
Sandel, Michael J. “The Procedural Republic and the Unencumbered Self.” Political Theory, Vol. 12, No. 1. Feb. 1984. 81-96. Print.
Limited Freedom Through Wage Labor Has Its Alternatives
Response to Cole
While I agreed with Cole that in some cases wage labor is voluntary in others people have no choice but to work in a specific job they otherwise would not either because of education, wealth, or another marginalizing factor. In this way wage labor can be coercive and in turn it impedes ones personal and economic freedom. Cole’s views seem to be an idealized one that ignores the harsh realities of life set before too many people. While it is the purpose of many corporations to simply make a profit, this is the inherent flaw in the system. This is not true of all corporations either, worker run companies do exist and these companies aim to alleviate the inequalities inherent in the capitalist system. In one case the owners of a small San Francisco Bakery no money goes towards investors and bakers make an average of “$24 and house – more than double the national median wage for bakers. On top of that, they get health insurance, paid vacation and a share of the profits.” (Dewan, NYT: 1). It a decentralized example of what it possible if we separate parts of the economy out for each other.
Cole’s example using India’s lack of wage labor being the source of the large disparity in wealth between the well off and what he writes as “people living on the side of the road in makeshift houses” is unspecific. His entire last portion about the non-existence of the working class destroying the “capitalist” system he site is erroneous. Communism does not mean the elimination or non-existence of the working class but a more stark division between classes in the form of the working class –proletariat – and those who own the means of production – bourgeoisie (Ball, EB: 1). While it may remain true that more people would be plunged into poverty in this system, the classes still exist just with larger disparities in between.
Some would argue that I’ve made two sharp a point about the differences between a failed capitalist system that I’ve tried to point out and Cole’s comparison to the eventual decline into socialism or communism if wage labor were to disappear. The point still stands that if we want to get rid of the oppressive nature of wage labor there are real world examples that we can look too.
Ball, Terence. “Communism | Ideology.” Encyclopedia Britannica Online. Encyclopedia Britannica, 28 Oct. 2014. Web. 23 Apr. 2015.
Dewan, Shaila. “Who Needs a Boss?” The New York Times. The New York Times, 29 Mar. 2014. Web. 23 Apr. 2015.
I do believe that wage labor, especially in a capitalist environment, limits the freedom of the working class for the benefit of the elites. People often do sign incomplete contracts such as Bowles et al. had described due to lack of jobs in the area, inability to move where better jobs are, and the dependency they have on money to provide for themselves and their families. A large majority of people, primarily in the working class, are solely dependent on wage labor and have no other means of making a living; this can be from a lack of education or lack of skills to produce for themselves in today’s market.
However the working class should have the same leverage in the relationship between employee and employer seeing as without them there is no production. With the working class organizing and working together to better themselves as a whole, like in unions, it benefits them immensely and gains them leverage in negotiations over contracts. Unions has lead to many improvements in the quality of work environments and benefits of workers all over the country. Some examples being the implementation of the 40 hour work week, minimum wage, sick leave including family medical leave, and child labor laws among many others (UnionPlus).
In capitalist societies the working class becomes locked into incomplete contracts laid out by their employers abusing the fact that the workers lack the ability to relocate where jobs are plentiful, if there even any in economy at the time. In capitalist society there will always be a wage labor as every producer is looking to make their product cheaper and cheaper which thus in turn increases the need for unskilled laborers. The dependency the working class has for the wages provided for them by their employers causes them to fundamentally lose some freedom. Their dependency causes them to buckle to the whim of their employers and thus making them do actions that they would not do completely voluntarily, such as coming into work on their weekend off or doing a task/job they despise.
“Union Plus.” 36 Reasons Why You Should Thank a Union. UnionPlus, n.d. Web. 21 Apr. 2015.
Gourevitch, Alex. “Jacobin.” Jacobin WageSlavery and Republican Liberty Comments. N.p., 28 Feb. 2013. Web. 21 Apr. 2015.
“‘But Wage Labour Is Voluntary!’ – A Response.” Anarchopac. N.p., 29 Aug. 2013. Web. 21 Apr. 2015.
The War on Wage Labor: Is it Justifiable?
Response to Tyler
In a fully competitive and free-market capitalist system, wage labor does not impede freedom, but alternatively, allows for more individual market mobility and power. In a similar vein to Friedman’s teachings, because the ability to work in a capitalist system is void of coercion and completely voluntary, the wage-labor worker has more power than he might realize (Friedman, 1962). Because wage labor is such a broad and controversial topic, narrowing the focus to minimum wage and labor mobility provides for a more approachable grasp on the issue at hand.
An important issue to look at when considering wage labor is the minimum wage laws that are in effect. A common misconception is that by having a certain minimum wage, or by raising the current minimum wage, people will be better off. The Federal Government first imposed a minimum wage in 1938, and states soon followed suit by imposing their own minimum wages. With the ultimate aim to help workers, decades of economic research show that minimum wages indeed harm low-skill labor and the broader economy (Wilson 2012: 1). If anything, individual freedom is being impeded upon due to these stringent wage laws and is hindering people’s ability to work. Due to the potentially harmful nature of these wage restrictions, federal and state governments should implement policies that promote faster economic growth which will lead to rising wages and opportunities for workers (Wilson 2012: 1-2).
In your post, you stated that wage labor limits freedom of the working class and benefits only the elites. I find hard to believe due to the ability of workers to increase their productiveness in their trade and earn more money for themselves through wage labor. Research indicates that nearly two-thirds of minimum wage workers move above that wage within one year (Even, Macpherson, 2000). Additionally, using your argument that a large number of people subsist on wage labor, one would have to consider that it is because market mobility and voluntary work that these people can hold jobs and provide for their family in the first place. In continuation of my point, because potential employees have the freedom to negotiate contracts and conditions, they are not always forced into positions; rather, it is voluntary whether or not they accept a position.
A criticism of this argument, which you highlighted, is that although in a capitalistic economy labor is voluntary, some people are indeed forced into taking positions they otherwise would not due to their dire monetary needs. Although this might be a valid argument, capitalism still allows for the ability to choose employment, removing the coercive nature of this criticism (Carden, 2009). Another criticism is that wage labor tends to lead to incomplete contracts and exploitation of the worker; however, there are inevitable risks taken in any aspect of business that can be avoided, and in this case, can be avoided through a strong understanding of contracts and negotiation.
Carden, Art. “Repeal The Minimum Wage.” Forbes. Forbes Magazine, n.d. Web. 23 Apr. 2015
Friedman, Milton, and Rose D. Friedman. Capitalism and Freedom. , 1962. Print.
William Even and David Macpherson, “Rising Above the Minimum Wage,” Employment Policies Institute, January 2000.
Wilson, Mark. “The Negative Effects of Minimum Wage Laws.” Policy Analysis (2012): 1-13. Object.Cato.org. Web. http://object.cato.org/sites/cato.org/files/pubs/pdf/PA701.pdf.
The Freedom of the Working Class Is in the Hands of Capitalists
Response to Tyler
For the majority of Tyler’s argument, I agree with his position on the limitations that wage labor imposes on the average worker’s freedom. It is certainly true that organizations such as labor boards and unions aid significantly in increasing the freedoms that wage laborers enjoy, however, these institutions can only help so much. Tyler claims that workers in a capitalist society become locked into contracts laid out by their employers abusing the fact that workers lack the ability to relocate to places where jobs are plentiful. While I do believe that wage laborers often fall victim to struggles with incomplete contracts, I argue that it is actually a result of the underlying principles of capitalism that are in effect and that some of these principles work to hinder our freedoms.
A concern that arises against capitalism is that the “reason why workers sell their labor to capitalists in the first place is that they have no other choice. In a capitalist society one needs money in order to purchase the essentials of life, such as food, shelter and clothing.” Because of this many people “insist that under capitalism, workers are forced to sell their labor to capitalists.” (Anarchopac 2013) A counter-argument that someone might bring up here is that under capitalism, wage labor is voluntary, and because of this, workers are free to sell their labor to capitalists. Simply put, this is just a characteristic of the capitalist structure. Without money, a person does not have the same amount of power in the economy as a person who does have money. As a result, a person who is restricted by an incomplete contract with their employer has their freedom limited by that contract, and the problem is that this incomplete contract is a result of the capitalist structure. Due to capitalism, employers and employees alike have incentives to earn as much money as they can, and this in turn gives incentive to the employers to give incomplete or unfair contracts to their employees.
Tyler mentions that since there will always be wage labor in a capitalist society, the working class losses some of their freedom because their well-being hinges around the wages they earn from employers. I agree that some freedom is lost in this system because if these people didn’t work, they would have no food, and no home. Unless, someone wanted this, average citizens must maintain these jobs with poor contracts just to survive. Labor republicans believe that “even if wages were fairly high, the point of the contract is to become subject to the will of a specific owner or his manager.” (Gourevitch 2013) This implies that even the most successful of the working class is still destined to be under the restrictions of employment contract. This stark contrast between the workers and the capitalists makes for an unbalanced and freedom constricting economy in the lower classes.
Gourevitch, Alex. “Wage-Slavery and Republican Liberty.” The Jacobin. 28 Feb. 2013. Web. 23 Apr. 2015.
“But Wage Labour Is Voluntary!’ – A Response.” Anarchopac. 29 Aug. 2013. Web. 23 Apr. 2015.
Wage labor: In the Name of Growth
Response to Tyler
Although wage labor presents opportunities for employers to take advantage of employees, as Tyler points out, without it growth and accumulation would slow to a grinding halt. The alternative to wage labor would be an extension of the surplus to all employees, which means less accumulation but would ideally lead to a better standard of living for the employees. This is unreasonable. A large reduction in accumulation would result in less potential jobs and a potentially a lower standard of living for a large portion of people. The wealth has to come from somewhere, but where remains unanswered.
Raising the minimum wage is the only sensible way to establish a greater standard of living for low-wage employees. A counter example to this point would be the conglomerate of Wal-Mart. “As of 2013, the Waltons control “a fortune equal to the wealth of the bottom 42 percent of Americans combined.” ” (Kahle) The massive fortunes of the owners and CEO’s of companies like Wal-Mart make people wonder, when is enough wealth enough. It seems most logical that the minimum wage should be raised, but not independently. If Wal-Mart “creates poverty all around the globe, and then it turns around and sells those products to other poor people whose poverty it has helped create, and rakes in the money” (Kahle) then a raise in minimum wage just for Wal-Mart would hurt, not help the poor. The minimum wage must be raised federally.
A counter argument to my point that Tyler might have is that replacing the wage system with a salary-based system that entitles employees to the surplus would have the same effect as simply raising the wages in the system we have now. A skilled America is a productive America and incentivizing unskilled labor with salaries and bonuses from the surplus takes away the incentive to become skilled and slows the growth of America. Some could say, “using business profits to increase productivity and output — doesn’t actually drive economic growth. Consumer debt and government spending do.” (Livingston, 2011) I believe this point to be ridiculous. Yes government spending and increased consumer spending do in fact promote economic growth, but the reinvestment of surplus leads to more factories, more jobs, and more production, which is how companies out succeed one another in the capitalist market place.
The value of the educated, skilled laborers must not be undone. Low-wage employees are faced with complete contracts that require long hours or strange hours then they can choose to agree or to not agree. If they do not like the contract presented, they can decline and surely another unskilled laborer surely will take their place.
Kahle, Trish. “The Political Economy of Low-wage Labor.” The Political Economy of Low-wage Labor. N.p., n.d. Web. 23 Apr. 2015.
Livingston, James. “It’s Consumer Spending, Stupid.” The New York Times. The New York Times, 25 Oct. 2011. Web. 23 Apr. 2015.
The Name of the Game: Turning a Profit
Response to Tyler
I would have to agree with Tyler’s statement that wage labor limits the freedom of the working class. There is no doubt that this hindrance is present with capitalism. Unfortunately, I would push back on the idea that this hindrance is reconcilable with regard to the current state of labor. In other words, I would argue that capitalism is a breeding ground for such behavior and as long as capitalism is present, there is a rather low chance for one to reconcile the impediment of freedom.
In no doubt does the working class get coerced into incomplete contracts; Tyler does an adequate job at pointing this out. Tyler’s comment regarding unions is worth mentioning as it decreases the influence that employers have over employees. However, I would argue that the unions have a lesser significant impact with regard to capitalism. To explain, the impediment on personal freedoms is necessary for wage labor. If an individual is unhappy with the present state of minor oppression, then they, the worker, has the opportunity to move and find another employment opportunity where the oppressions are not the case. We have seen this argument with how the capitalist markets work to remedy discrimination. However, recent political restructuring of business has pushed to reduce discrimination (Hood).
There is an inherent disconnect between the ways employment behaves and how the employment ought to behave. This is best described with how individuals are often use people as a means to an end; in this case, the end is turning a profit. An example of this is how individuals are forced to work in less-than idea conditions because of where the location is. The industry knows this and exploits this, to turn a profit. This can be exemplified with how Apple’s employees in Foxconn are throwing themselves off buildings. At the end of the day, Apple is concerned with profit, rather than improving the conditions. This statement clearly defines why Apple installed nets, rather than improving conditions (“Inside Apple’s Foxconn Factories: ‘Serious and Pressing’ Violations”). The nets could arguably be cheaper.
A counter argument to this discussion is that there is no inherent connection between capitalism and the impediment on democratic principle of self-government and freedom. One could argue that this impediment is present because of the political atmosphere, rather than the economic one. This argument would be difficult to measure as economic markets are in no doubt impacted by the political stage; hence the derivation of the political economy.
Hood, John. “Capitalism: Discrimination’s Implacable Enemy : The Freeman : Foundation for Economic Education.” Capitalism: Discrimination’s Implacable Enemy : The Freeman : Foundation for Economic Education. 1 Aug. 1998. Web. 24 Apr. 2015.
“Inside Apple’s Foxconn Factories: ‘Serious and Pressing’ Violations.” Bloomberg.com. Bloomberg, 29 May 2012. Web. 24 Apr. 2015.
Weakening Freedom Through the Minimum Wage
Wage labor, when examining the minimum costs of living in tandem with the minimum wage, is a great infringement on freedom. As Michael Sandel mentioned in Democracy’s Discontent (1996) excerpt from chapter 6, wage labor was generally practiced in the Jacksonian era in order to provide an apprentice with the means necessary for him to become an independent producer. Wage labor, he argues, impedes one’s ability to become an independent capitalist and is therefore a violation of freedom.
In the modern day wage labor is abundant throughout the country and is regulated by a federal minimum wage, currently $7.25 per hour (Department of Labor n.d.), while some states offer minimum wages greater than this. What causes minimum wage to become an issue of personal freedom is its distinct difference from the living wage, which is the amount one must make in order to afford their month-to-month expenses. Comparing the state minimum wage (based on 2010 numbers) to the living wage in a few cities or counties with the “Living Wage Calculator” (Glasmeier 2004) shows that there is generally a significant gap between the two values. She estimates the costs of food, child care, health care, transportation, housing, and other necessities as higher than what someone would earn in an average year of working for that minimum wage. $7.25 “doesn’t approach what it now costs to live in some cities” (Gertner 2006), and that is the rate at which many people are forced to work. Per this notion, the ability to choose one’s own economic standing is nullified and economic freedom is threatened.
The inability to switch to jobs offering higher pay grades is an infringement of freedom in itself. In Friedman’s perfectly competitive market those who are struggling should be able to sell their skills to some other employer if they are unhappy with their pay. Yet the costs to switch careers are often high and unaffordable, especially if the person is living under the living wage.
Should the federal minimum wage be increased in order to correct for these failures? Friedman argued that doing so would cause rampant unemployment. In Santa Fe for example, “companies could move outside the city limits or could outsource their work to cheaper places in the state” (Gertner 2006) due to their increased minimum wage, potentially pushing local businesses out of the market and their employees with them. Increasing welfare would also go against Friedman’s notions of liberal capitalism. It seems as if there is no potential solution to the minimum wage problem.
A potential counter to this could encourage the poor to make wiser budgetary decisions or even cut out the high-cost pieces of their lives in order to successfully live on the minimum wage. However it is not morally feasible to stop supporting one’s family nor is it within the realm of possibility to live on little food. This problem surrounding the living wage and the minimum wage is an epidemic, with no efficient or effective solution in sight.
Gertner, Jon. “What Is a Living Wage?” New York Times Magazine. 15 January 2006. Web. 21 April 2015. http://www.nytimes.com/2006/01/15/magazine/15wage.html?pagewanted=all
Glasmeier, Amy. “Living Wage Calculator.” Massachusetts Institute of Technology. 2004. Web. 21 April 2015. http://livingwage.mit.edu/
Sandel, Michael. Democracy’s Discontent. The Belknap Press. 1996. Print.
United States Department of Labor. “History of Changes to the Minimum Wage Law.” Wage and Hour Division. NDG. Web. 21 April 2015. http://www.dol.gov/whd/minwage/coverage.htm
Instead of Minimum Wage, Increase Minimum Understanding
Response to Travis
No one can deny the immense gap in income/wealth between the top and bottom echelons of capitalist America. This gap, however, I feel is blamed or pointed to more than it should be. It’s a shocking statistic, and makes it easy to identify a category of people of being ‘at fault’.
Critics of capitalism have, for a long time, made a habit of dehumanizing or implying some evil nature inherent in “the capitalists”. I would conjecture that most people would not act all that differently if put in the place of these “capitalists”. The human tendency to protect what one has and seek more is a basic survival function–just as natural as envying those who have more than you.
Efforts to “fix” the income gap such as increasing the minimum wage do not strike in the right place. How many people working for minimum wage do you think the top 1% employs? A recent study showed that among workers making under $10/hour, 46% work in businesses with 100 or fewer employees (Saltsman). An increase in the minimum wage may help some of the poor, but at a much greater percentage cost to the middle classes than the upper. This may be the cause behind the trend of restaurant closures in Seattle after raising their minimum wage (Guppy).
Taking Iris Young’s perspective of political responsibility over liability, perhaps the solution lies in smaller grassroots movements. By accepting responsibility for creating the 1%, we can take conscious steps toward reducing it (shopping locally, not taking out loans you cannot repay, engaging in fair business practices, etc).
Of course these steps are easy to take living in Boulder, but what about other areas where mega-corporations (Walmart, Kroger, etc) are the only suppliers available without significant inconvenience? It is difficult to compete with these giants due to their greater efficiency and increasing returns to scale without a concerted effort by the community to support local business. This means there is little incentive to challenge the market structure, and leads to the population supporting the very structures that they complain about.
In this age of obfuscated market interactions, I think the first step toward a better system lies in increasing transparency. If we could all take some responsibility see our own role in the dynamic we’ve created, perhaps we would make decisions that would lead us to a better place.
Guppy, Paul. “Seattle’s $15 wage law a factor in restaurant closings.” Washington Policy Center. 11 Mar 2015. Web. 22 Apr 2015. http://www.washingtonpolicy.org/blog/post/seattles-15-wage-law-factor-restaurant-closings
Saltsman, Michael. “Who Really Employs Minimum-Wage Workers?” The Wall Street Journal. 28 Oct 2013. Web. 22 Apr 2015. https://www.epionline.org/oped/who-really-employs-minimum-wage-workers/
Limiting Freedom with Wage Labor
Response to Travis
The idea behind the wage for labor is to keep the capitalist system going, even if it causes someone to lose parts of his or her freedom. The capitalist economy cannot survive without a working class.
The freedoms that it takes away from these individuals are as Travis discusses with their lack of ability to move up in classes, and being constrained by their wages. The not being able to gain more money means they will live in the same conditions for most of their lives and it will hold their kids to the same economic statues as well (CÔtÉ, 2014). Even though the government tries to create a sense of taking away less freedoms with minimum wage it does not do enough. The problem with minimum wage is it gives the people enough money to not live in poverty, but they do not get all the extra benefits that people with a large amount of money receive. For example, people with large amounts of money can send their kids to better education along with having better health insurance. Minimum wage can also not be raised because it will cause inflation, which will lead to individuals not being able to afford products they might need.
On the other side of the argument the wage labor system does not limit the freedoms of the individuals in that position. One prime example of someone who works in a wage labor position that is able to move up to a managerial position is in a restaurant. These individuals have the ability to move up from a lower level position to own a restaurant (Bloch, 2014). This defies the idea that someone cannot move up to a socio economic class and in turn wage labor positions do limit freedoms.
CÔtÉ, Stéphane, and Michael W. Kraus. “Crossing Class Lines.” The New York Times. The New York Times, 04 Oct. 2014. Web. 23 Apr. 2015.
Bloch, Hayley. “Topic: Restaurant Industry in the U.S.” http://Www.statista.com. N.p., 05 Dec. 2014. Web. 23 Apr. 2015.
Response to Travis
Although Sandel states that wage labor impedes one’s ability to become successful in a capitalist society, some may view it as an opportunity to gain enough influence to eventually slingshot themselves up to the top. It is true that many people must accept jobs that may seem unfair, but are forced to because it is the only way for them to sustain even the lowest quality of life. However, if there were no wage labor, then where would people start? The economy needs competition to drive innovation and motivation, and getting rid of wage labor would lower the competition for jobs. If the employers lose bargaining power, than those who may not be best equipped for the job would be hired and be making as much money as someone who can perform a task much more effectively. The Wilt Chamberlain example comes to mind. Although he is a special case of near superhuman talent, exploitation of talent is present all around us. In wage labor, an employer hires the one who they believe will perform a job more effectively than the other candidates. Once hired, that employee may strive to become the best, and possibly get a raise or even a position advancement. If this worker’s efforts pay off, they may be able to join the capitalist society as a competitive and effective member. Taking away wage labor would take away a lot of incentive to be better than the next person, eventually causing the labor market to collapse on itself.
The motivation for any business is to make a profit (Blodget), and the business world would fail under a system where they were not able to search for the cheapest labor. If wage labor were to be eliminated, businesses would not be able to cheaply produce goods. The price of labor would dramatically rise, and in turn the prices of goods they sell would rise. Although the idea of eliminating wage labor seems like a good way to be rid of inequalities in living, the rise in inflation would quickly prove otherwise. Yes, the minimum wage is under the average yearly amount that a person must spend to comfortably live, but increasing the amount of money businesses must pay these employees would only drive up prices enough to put them in the same or worse position.
A counterargument to keeping wage labor is that it sometimes outsources employment to other countries. India has a large amount of people working for American firms and are being paid much less than a domestic worker would. Because businesses feel the need to compete for the lowest cost of labor, they selfishly employ those from another country, weakening our economy and eliminating thousands of jobs that Americans could have been working if the businesses were not forced to look for those who would accept the lowest wages.
Blodget, Henry. “We Need To Stop Maximizing Profit And Start Maximizing Value.” Business Insider. Business Insider, Inc, 08 Dec. 2012. 20 Apr. 2015.
Glasmeier, Amy. “Living Wage Calculator.” Massachusetts Institute of Technology. 2004. 21 April 2015.
“’But Wage Labour Is Voluntary!’ – A Response.” Anarchopac. N.p., 29 Aug. 2013. 21 Apr. 2015.
Response to Travis
The wage system is not the problem. Getting rid of the system that facilitates the working class would ruin capitalism. The problem is the power disparity between the working and capitalist class. Advocates against increasing minimum wage claim such policy would increase the price of goods and unemployment across the economy. Nevertheless, there is evidence that supports the claim more money in the pockets of the poor would benefit the entire economy. Traditionally, one assumes the rise in cost of inputs results in the rise in costs of outputs. However, paying more for labor would increase the amount of money people have and in turn, spend.
“Investing” more into higher wages for workers only pays off in a more competitive market. In a perfectly competitive market, the poor will not be overpaying for healthcare, education, housing, and financial resources. Therefore, more of the money they make would go to the firms they work for. The United States Department of Labor shows how increasing the minimum wage provided benefits to consumers purchasing power, GDP, and business productivity. Not only does paying workers more have any discernible effect on unemployment, but paying workers more also ensures businesses have happier employees and more satisfied customers in addition to reducing costs of training due to lower employee turnover (DOL).
Wage labor itself does not present any issue. The businesses should not be blamed for trying to extract cheap labor because that is just the way the system works. It is up to the agency of the workers to make sure that the government has adjusted the minimum wage for inflation and of the capitalist class to see it in their best interest to pay their workers according macroeconomic implications rather than ways to minimize a cost function. If the capitalist class takes this kind of agency it would be plain to see Friedman’s logic that those who want better work would be able to find it.
United States Department of Labor. “Minimum Wage Mythbusters.” Office of the Secretary. nd. Web. 23 April 2015.
Labor Unions, The Solution
Response to Travis
While I agree with most of what Travis P. said, I find his conclusion difficult to believe. A couple of Mr. P’s arguments are hard to disagree with; that the minimum wage at times it doesn’t really reflect the cost of living in an area, and that when one is living at the minimum wage it is difficult to make decisions due to monetary constraints. Yet his ending remark: “This problem surrounding the living wage and the minimum wage is an epidemic, with no efficient or effective solution in sight” is to me the most troubling. Mr. P points to Friedmans argument about the ability of employees to switch employers til they find an agreeable arrangement and says that it is difficult to do when one’s means are bellow the minimum wage. This is true, but I argue that the institutions set up to combat the problem of nonnegotiable agreements between employees and employers have over the last 300 years, and the rise of capitalism, been set up. It starts at first with guilds banding together in Colonial US in order to raise wages and prices for the commodities produced, and at the present is held by Labor unions that have relinquished their accessibility to power(Phillips-Fein). The institutions, mechanisms, and blue prints for the beaurocracy are already there; Labor Unions, but over time due to lackluster effort on the part of unions to protect employees interests caused employees to loose trust and faith that the union would operate as it was first devised(Aronowitz). As humans, our first instinct is to say that the union theory didn’t work and to toss it aside like last nights shirt, but very much like that piece of garment the institutions need to be cleansed and its boards and objectives need to be reworked in order to reestablish themselves as powerful institutions that protect the employees from the interests of the employers. The only obstacle that the reformation of these Labor Unions face is the Collective Action problem. Yet, over the last few years due to the rise of income inequality there has been a rise in the activity of these institutions. Some examples are the protests at Zucotti Park, otherwise known as Occupy Wall Street which sought to bring light and to attempt to address the rising inequality within the united states as a whole; where the 1% own 42% of the wealth. Another example is a set of protests known as Fight for 15, where thousands of Fast Food employees seek to raise the minimum wage to more closely reflect and compensate for the cost of living (Firghtfor15).
Aronowitz, Stanley. “The Death and Life of American Labor.” Social Policy 44, no. 4 (Winter2014 2014): 49-53. Academic Search Premier, EBSCOhost (accessed April 24, 2015).
PHILLIPS-FEIN, KIM. 2015. “Why WORKERS WON’T UNITE.” Atlantic 315, no. 3: 88-98. Academic Search Premier, EBSCOhost (accessed April 24, 2015).
A Way Out
Democracy is not a practice just for government, democracy in government alone is not true democracy. If the United States hopes to have a democratic government it needs a democratic society and this means breaking coercive hierarchies in the economy, in schools, and even in our families. The economy in particular reaches into every aspect of the American life and the undemocratic lack of freedom of current wage labor is directly in conflict with the very ideals of freedom in this country.
Under an idealistic form of capitalism, portrayed by Friedman or Nozick, there is no coercive hierarchy. Workers have the freedom to take their skills and labor to any number of employers if they find their own situations limiting. The problem with this version of capitalism is the fact that it relies upon the assumptions that the market for labor is highly competitive, there are no power dynamics between employed and employee, and that the actors are informed of their choices.
The fact of the matter is that substantive choices for many wage workers are limited or nonexistent. Even Keynes understands that in times of high unemployment the employer has power over the worker but unfortunately ignores the times when unemployment is low and choice and freedom is still limited. Not only has the wage workers economic freedom been an illusion but their political freedoms have been cut off as well. As Sandel suggests the low wages and long work week of many wage workers deprives them of the privileges and rights of a democratic society. They are denied through an economic system of the right to meaningfully participate in democratic decision making, this means going beyond the ballot boxes.
Our society still needs goods and services, the competition among businesses is good for lowering costs for consumers but how can we achieve these things so often associated with capitalism without the wage labor? One possible solution is worker owned businesses. The workers share in the profits of the business and the risk but don’t have to engage in the hierarchical system that is set up between the employee and the employed as the worker fulfills both roles at once. This business model can be seen in big and small companies globally and domestically (Peterson). One company that I’ve personally bought from is king Arthur mills a prosperous flour company that is completely worker owned. This alternative to traditional capitalism frees workers from the restrictions that wage labor imposes, creating a competitive and free market without restricting the economic and political freedoms of work that is so often found in traditional capitalism.
King Arthur Flour. (Sep 2011). Working at King Arthur Flour [video file]. Retrieved from http://www.kingarthurflour.com/
Peterson, D. (2011, Nov 14) Guest Commentary: The Value of Employee-Owned Companies. The Denver Post. Retrieved from http://www.denverpost.com/ci_19317982
Sandel, M. (1984). The Procedural Republic and the Unencumbered Self. Political Theory, 12, 81-96.
Wages In A Capitalistic Society
Response to Grant
Wage labor places a significant amount of individuals in economic restraint. As we previously learned, Friedman states economic freedom as a means in acquiring political freedom. If people are constrained by incomplete contracts, coercive hierarchy, or unfair wage labor they are fundamentally alienated from obtaining democratic freedoms. Our voluntary choice to subject ourselves to an employer practicing unfair treatment is something Friedman and Nozick believe is in our hands. And this holds true for a large sum of cases, but there are those are do not have the option to opt out of a job because of situational limitations. Family, geographic placement or education levels all pose as potential barriers for a person to truly experience voluntary freedom.
The free-market is what sets the prices of wage labors. Neither an employer nor an employee is in control of setting the price of labor in a capitalistic free-market—to a point. The competition between businessman looking for labor and employees searching for jobs, shift wage labor. Employers can look at the free market to determine their range but ultimately it is in their control to set their wage price. A certain demographic or qualified level will be expected to apply based on the employers set wage. It is dependent upon the businessman to determine their level of standard in which they want to treat and finance their employees, while complying under regulatory restriction.
Worker owned businesses are an interesting alternative in avoiding certain restrictions that accompany wage labor. This type of employment/employer relationship would, as Grant mentioned, remove the hierarchical system within the work environment. If this type of free-market employment starts to become the norm of businesses, then employees would now be incorporated into both the profits and losses of the company’s capital.
Shareholders, partnerships, direct ownership, or stock options are all ways that a business could practice this worker owned business. But the drawback to this type of practice is when the company grows in numbers of size and more difficult decisions must be made. Difficulty is bound to arise when the consensus on a matter affecting the future of certain workers is at risk—such as shutting down a sector of the practice because a loss of profit, therefore resulting in layoffs (Brodwin). The temptation for senior management to cash-out and conform to an investor-owned business is the utmost concern (Brodwin). Because of the enormous turnover these people would gain, the attraction becomes a constant fear of those associated with ownership. This type of businesses would bring solidity to employment, incomes, and power but not without the imperative need to create a business fostering morality and reverence that is driven to stay for the long-run.
Brodwin, David. “We Need More Employee-Owned Businesses.” US News. U.S.News & World Report, 7 Nov. 2013. Web.
Wage Labor Removes Freedom from The Worlds Children
Wage labor is an integral part to capitalism as it can work to either favor of the employer or favor of the workers, depending on the economic conditions a country finds itself in. When the economy is going well, and there are a lot of available jobs at which workers have many different economic opportunities to earn money and succeed. However, when the economy is not doing very well and jobs become scarce, which is a problem that many nations are currently facing, workers become desperate and accept any job that they can. This is problematic as it allows employers to take advantage of the economic hardships imposed on workers by giving them the choice between no pay at all, or little pay that might just scrape an individual enough money to provide for himself. This form of economic struggle is coercion and impedes on citizens freedom. It places workers in a situation in which they are dependent on their employers to get by, even though the employers are paying as little as they possibly can for unreasonable hours. India has a significant problem with this. A significant portion of India’s population lives under the poverty line and are thus forced to work in sweatshops in order to survive. Sweatshops are defined as a factory that offers low pay, long hours and unsafe working conditions. Individuals in India often force their children to work with them as well so that the family can earn more, even though the pay for child labor is significantly less than for adults. Children are pulled out of school to work alongside their parents, and usually female children do not even attend middle school but start working once they complete elementary school. One real life example is the sweatshop in Shahpur Jat of Delhi in which children, some as young as 10 years old, are getting paid very little to make clothes for the clothing company GAP kids. Essentially these indian children are forced to make clothes for wealthy westerners to enjoy. And without giving children proper forms of education, it is hard to believe that indian citizens will have any good economic opportunities that we get to enjoy living in the west. To prevent this problem, I would suggest that India’s government needs to start intervening more in the economy so solve for human rights violations. A nation should not be forced to violate the human rights of its people due to economic hardships imposed on it by wealthier countries who are exploited the cheap labor for their own benefit. It is bad enough that individual adults are coerced into wage labor, but when it comes to children being coerced to work wage labor then there is something clearly wrong with capitalist society.
McDougall, Dan. “Indian ‘slave’ Children Found Making Low-cost Clothes Destined for Gap.” The Guardian. N.p., 28 Oct. 2007. Web.
Unionization Can Promote Free Labor
Sandel and Cohen raise an interesting argument on wage labor in the modern capitalist society, stating that working subordinately under a capitalist impedes on our notion of freedom today. Sandel argues that wage labor is not free ‘unless absent of unfair pressure and coercion. (169) Nozick states that every individual has the right not to work for another unless under a slave state, in which voluntary choice is completely vanquished. Also, he raised the claim that the difference between capitalist labor and slavery is that it is one’s civil right to not be subordinate to another. Freedom comes with voluntary choice to work. (Cohen 135) While I do agree with the idea that an incomplete contract restricts our fundamental right to freedom, I also believe that there are ways of combating this coercion.
There are a couple of prerequisites to enabling free labor in a modern capitalist society. The first of which is the voluntary choice to work subordinately for another. Voluntary action is a cornerstone to our modern idea of ‘freedom.’ Now, achieving a voluntarist work force is does not come without struggle, so how can we fulfill this accomplishment? Well, let us preface this point by stating what Sandel claims to be the ‘republican view of freedom;’ the foundation being self-governance and disposition. (169) So how does a work force gain self-governance? The answer: Unionization. I argue that installing the right labor unions opens the table for negotiations between employer and employee. Unions allow for cooperation and democracy, and therefore, create voluntary and free labor. The power differential is lessened significantly between capitalists and laborers.
By taking a look at post-WWII America, one can clearly attest to the efficiency of labor unions in promoting compromise. After the war, the reduction in overtime pay, increase in unemployment, and inflation caused over 4 million workers to go on strike. (Barbash) These were laborers from all different industries; steel, railroad, telecommunications, etc. Now, because the unified labor force had so much power, open discussions and compromises were created. Conversely, we can examine South Korea. Based on an article in the Wall Street Journal, detailing a survey of workers rights from 139 different countries, South Korean laborers have the worlds worst conditions. “While legislation may spell out certain rights, workers have effectively no access to these rights and are therefore exposed to autocratic regimes and unfair labor practices,” is the ITUC’s general description of a category 5 country. (Kwaak) With this being said, there seems to be a clear line between unions having say in the workplace, and the elimination of unions impeding on democratic rights of laborers.
As a counter-argument, one might say that even with unions in place, workers are still coerced into non-free wage labor. However, I would argue that the basis of unions granting open discussions between employers and employees creates a free labor work force.
Barbash, Jack. “Unions and Rights in the Space Age.” United States Department of Labor. http://www.dol.gov/dol/aboutdol/history/chapter6.htm. April 22 2015. Web.
Kwaak, Jeyup. “Labor Group Ranks South Korea Among World’s Worst for Workers.” The Wall Street Journal. http://blogs.wsj.com/korearealtime/2014/06/18/labor-group-ranks-south-korea-among-worlds-worst-for-workers/. April 22 2015. Web.
The Freedom to Unionize is Just One Freedom
Response to Nick
Nick makes an excellent point about our abilities to combat coercion and to win back our freedom when we have lost it. It is important to note that even if certain freedoms are obstructed by low wages, this does not necessarily eliminate every freedom. There are still many available to us, such as unionizing.
However, it is also important to examine in more detail the counterargument that even when unions gain certain victories for our freedoms, other infringements still exist. Nick provides excellent examples of when unions gained freedoms for their workers in the face of wage systems. But even so, what Cohen argues remains true. Everyone has the choice to starve rather than participate in wage labor, but this is not really a legitimate choice (Cohen 1995: 34-35). Unionized wage laborers are not as coerced as other wage laborers, but this does not mean that they were not forced into wage labor by the demands of society in the first place.
Furthermore, in the United States, many rights concordant with labor and even the ability to unionize have been limited by certain factors such as race and gender. As Glenn says, “the lack of citizenship rights limited the ability of some groups to form unions, compete for jobs, and attain education for higher-level positions” (Glenn 2002: 2). When not everyone has the right participate in acts like organizing unions, not everyone is free to combat other infringements on freedom such as wage labor.
Additionally, Zimmerman asserts that wage coercion “endures even in contemporary western economies where much of the work force is unionized and wage levels are more frequently set by bargaining than by markets” (Zimmerman 1981: 121). He goes on to give the example of Youngtown Steel, a case in which workers attempted to organize to buy the company from the conglomerate which was purchasing it and failed, as capital markets were not open to them (Zimmerman 1981: 143-144). In this case, and imaginably in others, the system of wage labor is also a system in which certain groups have access to capital and others do not, meaning that it is very difficult to conceive of a case in which even organized workers were entirely free.
Wage labor is not a complete restriction of individual freedoms, because it does provide certain freedoms such as buying food. And always, some freedoms must be exchanged for others – it is of course impossible to have everyone entirely free all the time without their freedoms infringing on others’. And so, wage labor doesn’t restrict every other freedom. But, just the same, other freedoms (such as the freedom to form unions) do not eliminate the restrictions of freedom which come from wage labor. It can of course be argued that this is not the worst possible infringement on freedom we can imagine. But it is a restriction of freedom nonetheless.
Cohen, Gerard. Self-Ownership, Freedom, and Equality. Cambridge: Cambridge University Press, 1995.
Glenn, Evelyn Nakano. Unequal Freedom: How Race and Gender Shaped American Citizenship and Labor. Cambridge: the President and Fellows of Harvard College, 2002.
Zimmerman, David: “Coercive Wage Offers.” Philosophy & Public Affairs, Vol. 10, No. 2 (Spring, 1981), pp. 121-145
Wage Slaves of America
The higher education system exists for those in the middle to upper class to seek greater economic opportunity. The rat race in America is not for the low class who lack the necessities to pay for or qualify for feasible higher education. These individuals are forced to find “unskilled” jobs that pay hourly wages often barely supporting food and housing. These contracts are non-voluntary in the sense that without such wages they could not survive and their ability to find better work is nonexistent. Time that could be spent bettering their skills or any crucial life factor such as taking care of children is spent working double shifts seven days a week, through the holidays if possible. Vacations and healthcare are fabled legends to a wage laborer. The whole belief that capitalism’s success rides on the grinding of the wage laborers and the notion that capitalism coexists with a vertical political dimension that runs from the top-down supports my claim that the elite who employ the laborers have an unfair amount of control over the wage system. In perpetual pursuit of greater profits, they have an incentive to create an abundance of cheap “unskilled” labor and are in position to take advantage of the low class who lack the social mobility to find other work based on their income, education, families, and communities (Economist).
To those who study employment contracts they might see wage labor not only as necessary for maintaining a large labor force but also as voluntary in the sense that there is no coercion involved in this system. However, these contracts are in fact incomplete. Samuel Bowles defines the contract as incomplete if the employers impose unfair terms and the employees have no choice but to accept these terms. Friedman suggests the current wage labor contractual system is complete because employees have the freedom to choose to accept these unfair terms or to find a more fair employer elsewhere. Friedman assumes the power of the employee counteracts the power of employers. The scholars who agree with Friedman and Bowles assume, provided high employment, labor unions should have enough power to negotiate contracts that do not impose high private costs on the employees. While this system is more or less effective in creating a strong middle class in which the individuals have access to fair complete contracts. The reality is this system is the main contributor to the stagnate social mobility in the upper and lower extremes of socioeconomic class. In 2013, 4.3% of wage workers were compensated with minimum wage or less (in the case of tips and commission). While this percentage is lower than it was in the 60’s, minimum wage in the 60’s had more purchasing power (BLS). If the 4.3%’s struggles to decide between paying for their children’s healthcare and housing and their inability to find better work is not concerning enough. In 2012, 40% of jobs offered $15/hr or less. In some places this enough to live on, however in places like New York the estimated living wage is $22/hr (Berman). 40% of jobs offering the same low wage begs us to question whether or not people can find a way to better their situation like Friedman says they can.