I tend to agree with most of the posts from Doug Henwood. I tend to agree with
most of the post from Paul Zaremka. Hence, the recent disagreement between
Comrades Zaremka and Henwood -- to the point of irritation of Brother Paul
-- created an existential crisis of the higher order for me. :):):)
Let me respond to Zaremka's question on changes in the minimum wage with the
following example.
r = S/(C + V) = (p - k)*Q/K = (p - k)*(Q/L)/(K/L)
p = unit selling price
k = unit cost (wages, circulating capital, depreciation)
Q = output
L = size of productive labor force
K = fixed capital investment
Suppose between timeperiod t and timeperiod t + n that both productivity
(Q/L) and capital intensity (K/L) have increased, but capital intensity has
increased faster than productivity. So, capital per unit of output (K/Q) is
less at period t than period t + n.
Under this scenario, equal rates of profit at t and t + n will require a
higher rate of exploitation at time t + n than at time t, i.e., (p -
k)*(Q/L) at time t + n will have to be higher than at time t.
r(t) = [p(t) - k(t)] * [q(t)] / [K(t)/L(t)]
(1)
r(t+n) = [p(t+n) - k(t+n)]* [q(t+n)] / [K(t+n)/L(t+n)]
[K(t+n)/L(t+n)] > [q(t+n)] > 1
(2)
[K(t)/L(t)] [q(t)]
The intertemporal change in capital intensity exceeds the intertemporal
change in
productivity, which exceeds unity. Hence if let r(t) = r(t+n) = r then we
may write:
[q(t+n)] = * [K(t+n)/L(t+n)] (3)
[q(t)] * [K(t)/L(t)]
By equation (2): [p(t) - k(t)]/ [p(t+n) - k(t+n)] < 1.
So, both Zaremka and Henvood have partially correct. The tremendous rise in
productivity does create room for a rise in the minimum wage. But, the increase
in productivity may have occurred with an even greater increase in capital
intensity.
In which case, there are definitely limits to the increase in any particular
capital's
wage rate before profitability is threatened.
Of course, Howard Botwinick discussed all of this in his book, Persistent
Inequalities. Any, I also discussed these issues in my August CJE article.
Crass self promotion? Yeah.
peace, patrick l mason
At 09:26 PM 12/4/95 -0800, you wrote:
>On Sun, 3 Dec 1995, Doug Henwood wrote:
>
>> Let's assume workers are what the BLS calls
>> nonsupervisory workers. BLS shows nonsup's only for private sector workers
>> - 79.6 million out of the 97.4 million private secdtor total or 81.7% (in
>> August 1995). They made an average of $11.47 an hour that week, and worked
>> an average of 34.7 hours. Multiply all numbers together and you get an
>> average of $31,015 a year in annual direct pay per worker, and $2,469
>> billion for a year. We don't know the sup/nonsup breakdown for government,
>> nor do we know pay, but let's assume they're the same as the private
>> sector. Total worker income was $2,794 billion. That's the amount we're
>> planning to double. Doubling it would raise workers' pay from 39.3% of GDP
>> to ??? [missing in what I recieved]
>
>If workers get 39.3% of GDP in 1995, what did they get in 1968 when average
>real wages were $15 (in today's prices) and the real minimum wage was
>$7.15 (in today's prices) AND productivity was LOWER. Did workers get
>everything produced? Surplus value was Negative?
>
>This is why I asked for Marxist theoretical categories, because the numbers
>don't make sense in isolation from theoretial categories.
>
>Talk about v--the exchange value of labor power and s/v--the rate of surplus
>value. If s/v=1, e.g., in 1968, and v is going down for two important
>reasons--real wage decline and productivity growth--then there is A LOT
>of surplus value floating around today. And I mean, A LOT!
>
>Paul
>
