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Encyclopedia > Wage labour

Wage labour is the socioeconomic relationship between a worker and an employer in which the worker sells their labour under a contract (employment), and the employer buys it, often in a labour market.[1][Quotation from source requested on talk page to verify interpretation of source] The products of labour become the employer's property. A wage labourer is a person whose primary means of income is to sell labour in this way. Socioeconomics or Socio-economics is the study of the relationship between economic activity and social life. ... Manual labour (or manual labor) is physical work done with the hands, especially in an unskilled job such as fruit and vegetable picking, road building, or any other field where the work may be considered physically arduous, and which has as a profitable objective, usually the production of goods. ... A contract is a legally binding exchange of promises or agreement between parties that the law will enforce. ... For the album by the Kaiser Chiefs see Employment (album) Employment is a contract between two parties, one being the employer and the other being the employee. ... Labour economics seeks to understand the functioning of the market for labour. ...

Wage labour has existed in one form or another for thousands of years in many different kinds of societies. However, under capitalism, it transforms more and more labour into wage labour, so that wage labour becomes the main source of income for most people. It has been suggested that Definitions of capitalism be merged into this article or section. ...

The phrase is also sometimes used to mean the labour done for an employer in exchange for a wage. A wage is a compensation which workers receive in exchange for their labor. ...


Forms of wage labor

The most common form of wage labor nowadays is a contract in which a free worker sells his labor for a predetermined time (e.g. a few months or a year), in return for a money-wage or salary.

But wage labor takes many more different forms, and many different kinds of contracts and forms of remuneration are possible. Economic history shows a great variety of ways in which labor is traded and exchanged. The differences show up in the form of:

  • employment status: a worker could be employed full-time, part-time, or on a casual basis. He could be employed for example temporarily for a specific project only, or on a permanent basis. Part-time wage labor could combine with part-time self-employment. The worker could be employed also as an apprentice.
  • civil (legal) status: the worker could for example be a free citizen, an indentured laborer, the subject of forced labor (including some prison or army labor); a worker could be assigned by the political authorities to a task, he could be a semi-slave or a serf bound to the land who is hired out part of the time. So the labor might be performed on a more or less voluntary basis, or on a more or less involuntary basis, in which there are many gradations.
  • method of payment (remuneration or compensation). The work done could be paid "in cash" (a money-wage) or "in kind" (through receiving goods and/or services), or in the form of "piece rates" where the wage is directly dependent on how much the worker produces, in terms of goods and services. In some cases, the worker might be paid in the form of credit used to buy goods and services, or in the form of stock options or shares in an enterprise.
  • method of hiring: the worker might engage in a labor-contract on his own initiative, or he might hire out his labor as part of a group. But he may also hire out his labor via an intermediary (such as an employment agency) to a third party. In this case, he is paid by the intermediary, but works for a third party which pays the intermediary. In some cases, labor is subcontracted several times, with several intermediaries. Another possibility is that the worker is assigned or posted to a job by a political authority, or that an agency hires out a worker to an enterprise together with means of production.

The examples and perspective in this article or section may not represent a worldwide view. ... Apprenticeship is a system of training a new generation of skilled crafts practitioners, which is still popular in some countries. ... An Indentured servant is an unfree labourer under contract to work (for a specified amount of time) for another person, often without any pay, but in exchange for accommodation, food, other essentials and/or free passage to a new country. ... Slave redirects here. ... Costumes of slaves or serfs, from the sixth to the twelfth centuries, collected by H. de Vielcastel from original documents in European libraries. ... Compensation of employees (CE) is a statistical term used in national accounts, Balance of Payments statistics and sometimes in corporate accounts as well. ... It has been suggested that piece rate be merged into this article or section. ... A stock option is a specific type of option with a stock as the underlying instrument (the security that the value of the option is based on). ... See stock (disambiguation) for other meanings of the term stock A stock, also referred to as a share, is commonly a share of ownership in a corporation. ... A subcontract is a contract that assigns part of an existing contract to a different party. ... Means of production (abbreviated MoP; German: Produktionsmittel), also called means of labour are the materials, tools and other instruments used by workers to make products. ...

Critique of wage labour

Wage labour under capitalism is often criticised, such as by socialists and most anarchists. They see wage labour as a major, if not defining, aspect of capitalism. In Marxist terminology, wage labour is defined as "the mode of production where the worker sells their labour power as a commodity",[2] (and a wage labourer is one who sells their labour power.) Socialism refers to a broad array of doctrines or political movements that envisage a socio-economic system in which property and the distribution of wealth are subject to control by the community. ... Anarchism is a form of social criticism, a political movement as well as a political philosophy. ... Marxist theory is an academic specialization in Western academias. ... In the writings of Karl Marx and the Marxist theory of historical materialism, a mode of production (in German: Produktionsweise, meaning the way of producing) is a specific combination of: productive forces: these include human labor-power, tools, equipment, buildings and technologies, materials, and improved land social and technical relations... According to Karl Marx, there is a clear distinction between labor and labor-power in economics. ... Commodity is a term that refers to goods that are mined or agriculturally produced. ...

Most criticism focuses on the argument that under wage labour, exploitation occurs. The employer who buys this labour power, owns the labour process and can sell the products to make profit. On the other hand, the worker sells their creative energy and their liberty for a given period, and are alienated from their own labour, as well as its products. The term exploitation may carry two distinct meanings: The act of utilizing something for any purpose. ... This article or section does not cite any references or sources. ... Liberty is generally considered a concept of political philosophy and identifies the condition in which an individual has immunity from the arbitrary exercise of authority. ... Marxs theory of alienation (Entfremdung in German), as expressed in the writings of young Karl Marx, refers to the separation of things that naturally belong together, or to antagonism between things that are properly in harmony. ...

Opponents of capitalism compare wage labour to slavery (see wage slavery). For example, Karl Marx said "The slave, together with his labour-power, was sold to his owner once for all... The [wage] labourer, on the other hand, sells his very self, and that by fractions... He [belongs] to the capitalist class; and it is for him... to find a buyer in this capitalist class." Wage slavery is a term used to refer to a condition in which a person is legally (de jure) voluntarily employed but practically (de facto) a slave. ... Karl Heinrich Marx (May 5, 1818, Trier, Germany – March 14, 1883, London) was a German philosopher, political economist, and revolutionary. ...

Wage labor is criticized on the grounds that the freedom to choose between "work or starve" or "work for this or that boss" doesn't mean it is not an authoritarian and unjust system. A slave who can choose his master is still a slave. A person who is free to travel from one to another totalitarian state would still be considered to be deprived of liberty.A person being hit with a hammer who is offered to be hit with a wooden stick or whip will choose the latter voluntarily, but the "freedom to choose" is limited to a coerced set of choices.

The rationale behind this critique is that other workers, not capitalists, produced the means of production. The capitalist obtains them with the money from previous profits. Those profits in turn came from previous profits and so on back to the origins of capitalism. Those original accumulations of money used to start this whole process of capitalist accumulation came from fortunes made as a result of conquest and direct expropriation (such as colonialism) as well as fortunes achieved under pre-capitalist class societies such as feudalism or slavery. Thus from a historical perspective capitalism cannot be considered just. 'Providing the means of production' simply means 'allowing it to be used.' Granting permission itself is not a productive activity, it does not produce anything. If producers cease to produce, production will stop in any society, regardless of the economic system. But if owners stop granting permission, production is impacted only if their authority over the means of production is obeyed. Their authority derives from the violent and coercive mechanisms of the state, which ensures that capitalists have this ability to allow or deny access to the means of production by workers. Not only is "providing the means of production" not a productive activity, it depends on a system of organized, systemic coercion to maintain the capitalist's monopoly (or near-monopoly) of the means of production. In the United States the richest 1% of the population (the wealthy capitalist class) owns more wealth than the bottom 95% of the population combined. It is physically impossible for that one percent to work harder than the other ninety-five percent. There simply aren't enough hours in the day. The average American worker works around 50 hours a week; for the capitalists to work ninety-five times more than the average worker he would have to work 4,250 hours a week.

Socialists and anarchists don't think "the creation of jobs" or "social mobility" (e.g. a poor person becoming rich) justifies a system. Slave owners also "created jobs" and that didn't justify slavery-- furthermore, if workers democratically run the factories, they create their own jobs and don't need the capitalists. In Colonial Brazil and United States, there were slaves who managed to become free and even become slave owners themselves.[3] It was as rare as workers becoming capitalists in contemporary capitalism, but it did happen and was theoretically possible for many slaves. Just as the theoretical possibility of a slave becoming a slave owner does not justify slavery, the theoretical ability of a wage-slave to become a capitalist does not justify capitalism. If one could go from being homeless to millionaire fascist dictator, that wouldn't justify fascism. In many Leninist states there were individuals who went from being a worker to being part of the ruling class, in some cases even joining the Politburo, yet that does not make Marxist totalitarianism an acceptable system. In the libertarian socialist view, the authoritarian power that the owner acquires by owning the means of production, is a form of statism. The fact that there have been some improvements in the standard of living under capitalism does not justify capitalism. Studies by economists like Richard H. Steckel, have shown that there were significant improvements in the standard of living in American slave societies. That didn't justify slavery.

The risk and effort of a capitalist doesn't entitle him to profit, anymore than a bank robber's risk and effort, since the inequality of power granted by property rights means that capitalist profit results from the exploitation of workers who are always paid less than the value of the goods they produce. It is true that investing usually entails taking risks (one could lose the investment), but just because someone is taking a risk does not mean that s/he is producing anything. Most human activity involves risks of some sort. If a criminal robs someone at gunpoint s/he is taking a risk as well. S/he could go to jail, the robbery could go wrong, s/he could get hurt, etc. That does not change the fact that it is robbery. The same is true of the risks taken by capitalists. The workers take as much of a risk, if not more, as the capitalist. If the business fails the worker is unemployed. The worker is then usually in a worse situation than the capitalist because the capitalist is wealthy and can weather such a situation much easier then those on lower levels of the hierarchy. In addition, many jobs entail risks to workers' life or limb, whereas investment does not.

Capitalists like to claim that their wealth is the result of them working hard by running their business, managing portfolios, etc. A mafia boss also does lots of work to plan his robberies and keep his illicit enterprise going but his actions are still theft. Many capitalists don't even run a company, they derive their income solely from stocks, bonds, interest, dividends, rent, etc. This attempt to justify capitalist exploitation completely fails in these cases because they aren't even running a company or doing any work at all. Manipulating portfolios doesn't produce anything useful; sticking money in the bank and letting it accumulate interest isn't hard work. Most of the "work" done by capitalists running a business is in reality manipulating workers so as to maximize exploitation (thereby maximizing profit). Most capitalists hire people to do whatever coordination and administration is necessary for production and do little of it themselves. In contemporary capitalism this has lead to the growth of a separate techno-managerial class that controls the workers for the capitalists. In general the higher up the hierarchy and the farther from the point of production the less genuine coordination is done. A thief that does a lot of scheming is still a thief.

The libertarian socialist view of states and corporations (and private ownership of the means of production more generally) is similar to St Augustin of Hippo's view of kingdoms:

Justice being taken away, then, what are kingdoms but great robberies? For what are robberies themselves, but little kingdoms? The band itself is made up of men; it is ruled by the authority of a leader, it is knit together by the pact of the confederacy; the booty is divided by the law agreed on. If, by the admittance of abandoned men, this evil increases to such a degree that it holds places, fixes abodes, takes possession of cities, and subdues peoples, it assumes the more plainly the name of a kingdom, because the reality is now manifestly conferred on it, not by the removal of covetousness, but by the addition of impunity. Indeed, that was an apt and true reply which was given to Alexander the Great by a pirate who had been seized. For when that king had asked the man what he meant by keeping hostile possession of the sea, he answered with bold pride, "What thou meanest by seizing the whole earth; but because I do it with a petty ship, I am called a robber, whilst thou who dost it with a great fleet art styled emperor.

Capitalist property is based on the coercion of the state, since any attempt by the majority of workers to take over the factories to run them democratically, will be met by state (or hired mercenary) violence, which is used to protect capitalist property rights. Libertarian socialists advocate worker's control of industry and elimination of autocratic institutions-- to create a society where power (and the responsibility that comes with it) is more decentralized. By relinquishing their role as subservient, unthinking and insentient cogs in a machine, people would feel more responsible and more aware of their actions; they wouldn't be indoctrinated by centers of power, and would become appalled by behavior that now is condoned within the hierarchical institutional structures. Decentralization would encourage the kind of checks and balances and self-examination that are now lacking--bringing the more positive values of human nature to the fore.


  1. ^ Deakin, Simon; Wilkinson, Frank. The Law of the Labour Market, Oxford University Press, 2005
  2. ^ Marx, Karl. Wage Labour and Capital
  3. ^ Koger, Larry."Black Slave Owners; Free Black Slave Masters in South Carolina, 1790-1860"

Frank Wilkinson, civil liberties activist. ... Karl Heinrich Marx (May 5, 1818, Trier, Germany – March 14, 1883, London) was a German philosopher, political economist, and revolutionary. ...

See also

Anarcho-syndicalism is a branch of anarchism which focuses on the labour movement. ... The capitalist mode of production is a concept in Karl Marx’s critique of political economy. ... Compensation of employees (CE) is a statistical term used in national accounts, Balance of Payments statistics and sometimes in corporate accounts as well. ... For the album by the Kaiser Chiefs see Employment (album) Employment is a contract between two parties, one being the employer and the other being the employee. ... In classical economics and all micro-economics labour is a measure of the work done by human beings and is one of three factors of production, the others being land and capital. ... Marxs theory of alienation (Entfremdung in German), as expressed in the writings of young Karl Marx, refers to the separation of things that naturally belong together, or to antagonism between things that are properly in harmony. ... Note: Marxian is not restricted to Marxian economics, as it includes those inspired by Marxs works who do not identify with Marxism as a political ideology. ... Reserve army of labour is a concept in Karl Marxs critique of political economy. ... The rate of exploitation is a concept in Marxian political economy. ... Unfree labour is a generic or collective term for those work relations, especially in modern or early modern history, in which people are employed against their will by the threat of destitution, detention, violence (including death), or other extreme hardship to themselves, or to members of their families. ... A wage is a compensation which workers receive in exchange for their labor. ... Working poor is a term used to describe individuals and families who maintain regular employment but remain in relative poverty due to low levels of pay and dependent expenses. ... Slave redirects here. ...

External links

  • Wage Labour and Capital - Karl Marx, 1847
  • Barbrook, Richard (2006). The Class of the New, paperback, London: OpenMute. 0-9550664-7-6. 

  Results from FactBites:
Wage Labour and Capital-- Chapter 2 (1508 words)
Wages therefore are only a special name for the price of labour-power, and are usually called the price of labour; it is the special name for the price of this peculiar commodity, which has no other repository than human flesh and blood.
Wages, therefore, are not a share of the worker in the commodities produced by himself.
What he produces for himself is wages; and the silk, the gold, and the palace are resolved for him into a certain quantity of necessaries of life, perhaps into a cotton jacket, into copper coins, and into a basement dwelling.
Labour (economics) - Wikipedia, the free encyclopedia (387 words)
In classical economics and all micro-economics labour (or labor) is a measure of the work done by human beings and is one of three factors of production, the others being land and capital.
Economists measure labour in terms of hours worked, total wages, or efficiency.
Marxian economists believe that ultimately the most desirable form of labour organization in the workplace is where workers manage themselves collectively, and elect managers where necessary; too much management is inefficient, it just means that people get high incomes for doing very little, capitalizing on specialized knowledge or qualifications.
  More results at FactBites »



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