(OPE-L) Re: tendencies for equalization

From: Gerald A. Levy (Gerald_A_Levy@MSN.COM)
Date: Sun Sep 19 2004 - 09:20:53 EDT


Hi again Allin.

I will advance a further reply to your suggestion that there is an
abstract tendency for wage equalization under capitalism.  You
previously wrote that: "all that is needed [for a tendency towards
equalization of wages, JL] is a tendency of workers to try to get
out of sectors where wages are low, and to try to get into sectors
where they are high."

I will offer and explain a counter-hypothesis in this post:  namely,
that there is no abstract trend towards wage equalization or wage
inequality under capitalism.  Rather, both movements towards and
away from wage equality could be seen -- in the most abstract sense
-- as separate *moments* that occur during the trade cycle.

Since we wish to understand whether there is a tendency towards
wage equalization at the most general level of abstraction, let us
assume in this post that there is no discrimination (based on race,
ethnicity, gender, etc.) and that collective actions by the working
class (including trade union representation) do not exist.

Let us consider the following simple and well-known
chraracteristics of the cycle of capital accumulation:

*  During one period of time -- the expansion -- there is a relatively
high demand for labour power, aggregate demand is growing,  and the
size of the industrial reserve army is relatively small.  In general,  we
anticipate that as a consequence of the above, average wages will
increase during this period.  This would be most pronounced at the
height of the expansion when the IRA has dried up and the system is
operating at or near the full employment of labour power. It is
especially true at the height of the expansion since the competition in
the market for labour-power has eroded and it has now become
a 'sellers market'.

-- During another period of time (either before or following the above),
aggregate demand and the demand for labour-power are decreasing
and, consequently, the industrial reserve army is increasing.  Under
these conditions, we would expect the opposite dynamic to take place:
i.e. average wages will decrease since there is now increased
competition among workers for jobs and this means that the market
for labour power has become a 'buyers market'.

None of the above is particularly controversial.  Note that we have
identified trends in  *average wages* but have not addressed the
issue of  whether there is a tendency for the decreasing of wage
*disparities* among workers.

To be consistent, we should not only assume (as above) the absence
of contingent factors in observing wage trends.  We should also
assume that already *existing*  wage inequalities are due to non-
contingent factors.  This requires that the assumption of 'homogenous
labour' be dropped [since how else could there have been wage
inequalities in the first place?]  Instead, simply assume that there are
unskilled workers and there are skilled workers.

Let us now return to consider what might be expected to happen
during different phases of the cycle.

* During the expansionary phase of the cycle, the demand for labour
power of both skilled workers and unskilled workers can be
anticipated to increase.  When the economy is at or near the
full employment of labour power and the demand for labour-
power is high,  both skilled and unskilled workers can be expected
to move from low-wage to high-wage jobs subject only to the
condition that unskilled workers are not able to choose (without time
and training) to get jobs as skilled workers.  *If*  the rate of
wages increases more for unskilled workers than for skilled
workers during this period, then one might suppose a movement
towards wage rate equalization occurring.  It  should also be
noted in this connection that  the mobility of labour-power is greater
under these conditions for unskilled workers since skilled workers
can not freely move into *different* skilled occupations.

* During the contractionary phase of the cycle, demand for
labour-power will decrease.  The demand for *all* unskilled
labour power will decrease.  This can be expected to cause
a decrease in the average wage of unskilled workers.  However,
there is no universal tendency of wages among skilled workers
during this period.  While *most* skilled workers' wages could
be expected to decline -- a reflection of the decrease in aggregate
demand and a consequence of the decline in capital accumulation --
there are *other* skilled workers for whom their wages
could decrease less rapidly than the fall in wages for unskilled
workers or remain constant or perhaps (in exceptional
circumstances) increase.  This would tend to be the case for
all occupations where there is a constant demand for labour
power irrespective of the trade cycle. [NB: while there are
_sectors_ of the economy where the demand for output could
be expected to remain constant even when there is a
contraction,  assuming the perfect mobility of *unskilled*
labour power the wages of  unskilled workers in this sector
could be expected to decline to the same extent as the decline in
theaverage wage of unskilled workers].  If  this is the case then
there could be expected to be an *increase* in wage inequalities
among workers during this period.

Consequently, there is a kernel of truth to Allin's proposition.
But, it a kernel which is true only as a *moment* in a cycle.
Viewed as a whole (at least at the level  abstraction assumed
above) there is no reason to believe that there is a *trend*
for wage equalization.

In solidarity, Jerry


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