MIA > Archive > Mary Marcy
From International Socialist Review, Vol. 17 No. 5, November 1916.
Transcribed by Matthew Siegfried.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
KARL MARX, the greatest economist of modern times, says that the working class, on the average, gets, for its labor, just about enough to live on and to raise children to become future workers. And this is true whether the wage workers live in a land where the general cost of living is $2.00 a day, $6.00 a day or only 10 cents a day. In each and every place the worker receives, on the average, just about enough to exist on.
At the end of twenty years the wage worker who receives and spends $6.00 a day has just about as much to show for his labors as the native in Central America who has worked for ten cents a day. It is the cost of living; food, clothing, coal, shelter, rent, taxes that determine the wages paid the working class in any particular country at any particular time.
Take a cotton mill worker in Central America and consider his wages. His employer is able to hire native cotton workers for 12 cents a day. The cotton worker is only able to get 12 cents a day for his labor power. Why? Because in the part of the country where the cotton mills are located much of the land is still free. The workers can go out and build a thatch hut on this free land. The climate is warm and the worker needs no steam-heated apartment, no furnace nor stoves to keep himself warm. The few cents he receives a day are more than enough to buy what little food he cannot secure in the forests and what little clothing he desires.
In England, where the taxes on a house are added directly to the rent, the cotton mill workers receive in their wages enough more money than the Central American workers, to enable them to pay not only the low rent but also the taxes. In one place the employing cotton mill owner gets the labor of his worker for 12 cents a day; in another the employer has to pay $1.00 a day – because it costs him more for food, for clothes, for rent and taxes, for his workers.
Now, who ways the taxes?
In the eastern part of the United States, where the cost of living is still higher than it is in England, the cotton mill operatives receive higher wages than they get in England.
If all taxes are removed from house rents in England, what would happen? Would the English cotton workers be able to save any more from their wages than they do now?
In any industry, or any country, or city you will always find that when the cost of living is reduced wages fall correspondingly except where there is a great scarcity of labor – because the wage workers who need work compete with other workers for jobs. One offers to work for less than the other and the second offers to work for less than the third and fourth, and so on – they keep under-bidding each other for the job until the wages again just about correspond to the cost of living.
Where the cost of living is reduced, wages fall because the workers can work for less and have to work for less. The boss always hires the cheapest man or woman.
Rent is one form of taxes. Just consider one city for a moment. Suppose there is only one landlord who owns all the houses for rent to the factory workers. And suppose there is one great factory owner and a lot of small grocers, clothiers, butchers, barbers, coal dealers, etc., etc. These make up the basis of the town. And then, of course, there are, say, 1,000 factory workers. Somebody has to pay the rent on the houses these factory workers occupy.
If the factory owner were to buy the houses and the land and let his employees live in these houses for nothing, he could hire them for just that much less wages. And the factory owner would be saving the rent for himself formerly charged for the homes of his employees.
On the other hand, suppose the landlord doubles the rent on the factory-hand cottages in a single night. Who pays the increase? Not the factory workers. They haven’t the money. They demand more wages from their employer, who is compelled to grant the increase, because he knows that all other wage workers will ask the increase before they can go to work for him.
A high tariff is a form of tax and many people believe that wage workers ought to oppose a high tariff rate because it means a higher cost of living. But the wage is determined by the cost of living. One of the reasons working men and women receive higher wages in America than they do in England is due to the high tariff. Food and clothing cost more in America than they do in England. But the American wage workers do not pay this increase. Their employers pay it. Their employers have to pay the workers higher wages to cover the increased cost of living caused in part by a high tariff.
You know and we know that the working class produces all the commodities in the world. The workers build the houses, raise the crops, produce the food, clothing and homes of the world. But all these things, which the workers make, are taken from them by their employers and the workers are paid wages. No matter where you may go, you will nearly always find that, owing to the number of unemployed workers, wages fluctuate very closely around the cost of living. The employers of workers have to pay enough wages to enable the worker to live.
A high tariff (or tax) on sugar enables the sugar manufacturers to sell sugar at a higher price than a low tariff, because foreign sugar manufacturers are unable to pay the tax and compete with the American manufacturers. Sugar and all other high tariff articles sell at a higher price because the high tax (or tariff) eliminates foreign competition. And so the wage workers are able to get higher wages. Without a high cost of living we in America would receive the average English wage, or, if the cost of living was forced still lower, the 12-cent-a-day wage of the Chinese laborer.
An employer sometimes regards his employee as the farmer regards his horse. The employer has to see that his employee is fed, clothed, sheltered – or he has rather to see that his employee receives enough wages to permit him to do these things for himself. The factory owner hates to see his employees forced to pay high rents, or high taxes, because he knows these come out of his, the employer’s, profits. Like the owner of a horse, he wants cheap fodder, cheap oats and corn, cheap pasturing, cheap bread for his worker.
Suppose somebody passed a law providing that every single week in the year the owner of every horse was required to inject two dollars’ worth of anti-toxin into the equine’s blood, or that the horse had to pay $2.00 taxes every week.
Suppose you received a notice that your horse had to pay $2.00 taxes every month. What would you do? Would you leave it to the horse? Would the horse pay the taxes? Or would the man for whom the horse works have to pay the taxes? Would you pay the taxes?
The employer of the wage worker is in the same position. It is true, we regret to confess, that the employer takes all the useful and beautiful things the worker makes. But the expenses of the worker determine what wages the boss will have to pay the worker!
Of course, the more widely the workers learn to organize with their comrades against the exploiting, propertied class, the more they can force from their bosses in the shape of wages. Some unions have long been able to get back a little more than just enough to live on.
There have always been casual students of economics who have claimed that it was useless for workers to strike for higher wages because the boss would turn right around and raise the cost of living.
But you know, and every other wage worker knows, that this is both impossible and absurd. We know that your boss and my boss cannot raise the cost of living. We know that they cannot even raise the price of the things they sell, because they have to compete with other manufacturers. And if they raise the price of the things we have produced higher than their competitors, they will soon be forced out of business. We will buy of the other fellow. Individual employers, except in rare cases, such as mining communities, where the miners are compelled to buy at company stores, are unable to raise the cost of living.
Karl Marx wrote a book and called it Value, Price and Profit, precisely to show that a rise in wages is an actual gain to the workers. Marx says that even a general rise of the wages of the working class of one country would not affect prices in that country to any considerable extent.
He says, however, that if, say, 2,000,000 workers received an increase in wages and began to buy more woolen underwear during one particular winter than they had ever purchased before, the new demand and inadequate supply might force the price of woolen under-clothing up for one season. But because of these high prices the following winter would see many new names in the woolen suit manufacturing business. Dozens of companies with capital to invest would be attracted to the woolen industry and its high rate of profit for the preceding year.
Then the working class would find these manufacturers competing with each other to sell their goods. There would be an over-supply of woolen underwear and prices would fall. Ultimately prices would stay at that level where the manufacturers were able to make only the average rate of profit Marx says: “A general rise in the rate of wages would result in a fall of the general rate of profit, but, broadly speaking, would not affect the prices of commodities.” (Value, Price and Profit, page 127)
Last updated on 27 January 2023