What Determines Wages

Mauritius Times – 60 Years

By Peter Ibbotson

Because trade unionism in Mauritius is not strong, and because of the inter-union rivalry between the Mauritius Amalgamated Labourers Association (M.A.L.A.) and the M.A.L.U., the Luce Report suggested that a Wages Board be set up to regulate the wages paid to labourers on the sugar estates. There is general agreement (except among I.F.B., Parti Mauricien, and leaders of the M.A.L.A. — some of whom have a vested interest in keeping the workers divided) that such a Wages Board would be a good thing, and the people are expecting rapid implementation of the Luce Report on this point. The speech from the throne also referred to the matter of a Wages Board — a pointer that something is to be done?

Workers will agree that wages are too low. So will many, indeed most, of the general public. The widespread poverty in Mauritius cannot be gain-said. But why are wages so low? What determines wages? Who fixes their conventional level?

The price of any commodity is its value; and its value is determined by what it has cost to produce. People who work are selling a commodity just as surely as any shop-keeper – but whereas his commodities can readily be seen (ghee, vegetables, clothes, cigarettes, curry, dholl, fish, meat, etc.), the person who works is selling an intangible commodity — his labour-power. And the price for which he sells his labour-power is called by a special name: wages. Wages are really nothing more than the price of a worker’s labour-power. And the level of the wages paid is determined by the cost of production of that labour-power.

So, what is the cost of production of labour-power? In other words, what does it cost to produce a worker capable of doing work?

Obviously, a worker can work only if he is alive. So, the basic cost of production of labour-power is the cost of keeping the worker alive: that is, the cost of the means of subsistence. But, of course, bare subsistence isn’t enough; a worker can’t do heavy work if he isn’t paid enough to keep up his strength to carry on with the heavy work. The cost of subsistence depends on the type of work being done. And be it noted, the absolutely unskilled workers have their wages determined almost entirely by the cost of the necessary cost of subsistence, by the cost of keeping them alive in working condition.

I said, “almost entirely”. If workers were paid only just enough to keep them alive in working condition, then as they died there would be no-one to replace them. So, in order to ensure that the workers will reproduce and provide workers for the future, the employers add to the basic cost of subsistence a sum intended to cover the cost of reproduction. In other words, wages consist of two elements: the subsistence element and the reproductive element. And workers are treated the same as machines, whose cost is calculated by the employer as maintenance (say, oiling now and then — this corresponds to wages spent on food) and depreciation (this corresponds to the reproductive element in wages).

So, wages, that is the cost of labour-power, are simply what will keep a worker in conditions in which he can do his job and rear a family to provide replacement workers in the future. Unskilled workers, on whose education for work very little has been spent, have cost less to produce than skilled workers; so that wages of unskilled workers are always lower than wages of skilled workers. Thus, to quote the example given by John Strachey in ‘Why you should be a Socialist’, “It takes more to produce a skilled worker than an unskilled; he has got to be able not only to read and write, but, in engineering, for instance, to read and understand a complicated blueprint. For most skilled jobs nowadays, the worker has got to have his mind as well as his hands developed to a relatively high degree.”

The wages of skilled workers will always, therefore, be higher than the wages of unskilled workers. But, apart from this differential arising from the cost of educating the skilled workers, the basic elements — subsistence and reproductive — still hold good as determinants of the wages paid.

But what is subsistence? That is the question. To the Socialist, it means not just bare subsistence but a tolerable minimum level of civilised living. Too many Mauritians are eking out a bare subsistence; they are existing on what is nothing less than an intolerable level of uncivilised living. Too little meat; too little fish; hardly any milk (and what there is often adulterated); far too much starchy food such as rice and bread; too few fresh vegetables, this is the dietary state of the nation.

In the literal sense of keeping alive, people can live on a handful of rice a day, and they can live in a hovel or under the stars.

Here is a description of life in Hong Kong today: “100,000 men, women and children live on the tenement rooftops … (there are) street-dwellers, squatters’ hillside hovels of cardboard and scraps of corrugated iron… Five adults living in a room 12 feet square; 50 people sharing a toilet; 150 using one water-tap. (And these are the lucky people who had been re-housed in newly built flats). TB — 95 per cent of the people have it.

There is clearly a level of existence even lower than that of many Mauritians; but it is a level to which nobody would wish to condemn anyone else, knowingly. Yet it is a level to which employers do condemn workers, by persisting in paying unduly low wages. Employers will willingly pay only the minimum wage which they can get away with paying. Only concerted action by the workers, that is of course trade unionism, will push wages up above the minimum.

Trade unionism is necessary to push up wages above the minimum; and when it has succeeded in this, it is equally necessary to keep them above the minimum. The perpetual tendency inherent in the economic system called capitalism is to drive wages down towards the bare “subsistence plus re-productive” level. The existence of this perpetual tendency is the reason for the necessity of trade unionism and vigorous workers’ action to combat it.

Unless and until the trade unions are strong enough to stand firmly on their own feet, with independent leaders who are not using the fact of their union leadership simply to gain personal political advantage, then the workers must be protected against the vulpine capitalists by the government; especially can this be done where the government has been voted into power by the people while the capitalist politicians have been roundly and soundly defeated.

This is just what has happened in Mauritius; the political circumstances of the present are ideal for the statutory regulation of wages by the creation of a wages board pending the eventual emergence of the trade unions as strong, viable organisations, with leaders who are more than just political opportunists.

Let us have a Wages Board for the agricultural workers with no further delay.

6th Year – No 248
Friday 15th May, 1959

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