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the unpaid labor time element has been diminished. As the boss loses the creative result of one hour of the worker's time it is but natural for him to try to persuade the worker that high wages are a bad thing; that they will make commodities dear. But, if we stop to think about it, the boss would not object to paying high wages except for one thing—they mean smaller profits for him. If he could compensate himself for an increase in wages by charging higher prices he would not fight a wage demand; but it is because he cannot do so that he fights so bitterly against a wage increase. High wages do not make high prices. When the capitalist cries out that they do, what he really means is that they make smaller profits, and that is why he is unalterably opposed to them.

Low Wages Do Not Mean Low Prices

If the wage of the worker is lowered from $3.00 to $2.00 there will not be any fall in prices, for the reason that in this case, as in the other, there is no change in the time necessary to produce the commodity. The worker is now paid for 2 hours and the results of his labor for 8 hours accrues to the boss. The boss would be better off than before and he would still take the commodity to the market and exchange it for a price equal to its value and above it, if he can, and below it when he must. But the wage of the worker has no more to do with price than the mercury in a thermometer has to do with the weather.

If the commodity sells for $10.00 and the worker's wage has been increased from $3.00 to $4.00 the boss makes $1.00 less profit. The article will still sell for $10.00, because the thing that determines its valuelabor time—has in nowise altered. But the boss does not like the fall in profits and howls about high prices as though he ever was concerned about anything lower than "all the traffic will bear."

What the boss would like to do, and what he would do if the market would permit him, is to raise the price of the commodity so as to maintain the old rate of profit or even to increase it. As he cannot do so he tries the next best thing-induces the worker to accept a cut in wages and then another while the cutting is good. Witness the open shop drive! Surplus value is the only source of profit. That is the Holy of Holies of the capitalist. He regards any inroads upon surplus value as an act of sacrilege. He fights bitterly and musters every ounce of his power to prevent it.

Increased Demand Temporarily Increases Prices

When a rise in wages takes place the workers have more money with which to purchase commodities. They go into the market to supply their needs first, then their wants. The increased demand thus created tends to temporarily advance the prices of commodities. These commodities, for the time being, sell above their value. The rise in prices appears to be due to the rise in wages, whereas it results from the increased demand arising from the increased purchasing power of the workers. It is not because wages have risen that prices are high, but because the workers are buying more actively. The living standard of the workers rises to higher levels with higher wages. If the new standard obtains over a long time it becomes the established standard. The higher the living standard the costlier labor power and the smaller the profit. Hence the opposition of the capitalist class to high wages.

For some years preceding the war prices were on the rise and wages ruled low. While prices of various commodities, if not of all, had risen considerably it is worth noting that the relationship of commodities to one another remained undisturbed—the rates of price increase were about the same in all of them. Their relationship to gold had changed—it required more gold to exchange with any of them and more gold consequently to express their relationship to one another. The value of gold had fallen. While other commodities exchanged for an increased amount of gold, labor power, on account of the competition between the laborers, did not as readily command its value, and labor power compared with other commodities was selling below its valuewages were low. Prices rose but wages, except in rare cases, did not rise. High wages were not responsible for these high prices; the decrease in the value of gold was. What Are "High," "Fair" or "Low" Wages? We hear the terms of "high wages," "fair wages” and "low wages.” What do we understand by them? Things can be regarded as "high," "fair" or "low" only when they are compared with something else. There must be something standard to gauge them by. What is it then that determines a high wage, a fair wage and a low wage? The standard of living prevailing among the workers.

When the wage of a worker enables him to live in a manner superior to the prevailing standard his wages are said to be “high.” When his wage enables the worker to approximate the prevailing standard, we say that is a “fair” wage. When, on the other hand, his wages do not enable him to reach the prevailing standard he is receiving a "low" wage. The prevailing (historic) standard of living is the wage denominator.

The wage has three characters: nominal wage, real wage and relative wage. The nominal wage is the price of labor power stated in terms of money, as $2.00, $5.00, or $10.00 per day. The real wage is represented by the commodities that his nominal wage will enable the worker to supply himself with. The relative wage represents the proportion the wage he receives bears to the values he creates. Thus if he creates $10 worth of exchange values for the boss and receives therefor $2 his relative wages is as 2:10.


1. Do the workers' wages determine the prices of com

modities? Explain why. 2. What, on the average, is the relation of price to

value? 3. Can the boss repay himself for an increase in wages

by adding the increase to the price of his commo

dity? Why? 4. Will a decrease in wages lower prices? Why? 5. How would you account for a temporary rise in prices following a raise in wages?

6. What have supply and demand to do with price

setting? 7. When commodities maintain their relationship to one

another but their prices go up, what has happened? 8. Is gold the measure of value or the expression of

value? 9. What are the three aspects of wages? 10. When is the wage "high," "fair" or "low"? 11. What is the nominal wage? 12. What is the real wage? 13. What is the relative wage?


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The Standard of Living. HE exchange value of labor power being determined by the labor time necessary to produce it, it follows

that this time is, itself, determined by the standard of living of the worker. Therefore, if the standard of living is raised more time will be necessary to produce its equivalent than formerly. If it is lowered less time will be required.

As the time required is increased or diminished the volume of surplus value is correspondingly diminished or increased. Because of this there is unceasing strife between the workers and the employers. The effort of the workers is directed to elevating their standard of living, while the effort of the employers is in the opposite direction—to oppose a raise in the standard and whenever possible to force it to lower levels. For, as we have seen, higher wages mean lower profits for the bossdefeat, to an extent, of his purpose. The boss is in business for profit and as long as he can prevent will permit nothing to interfere with the most complete fulfillment of his object.

In the relationship of the worker to his employer there are three features—wages, hours and conditions of employment and upon each of these the interest of the worker and the interest of the employer are diametrically opposed. The boss will defend the measure as well as the principle (to him) of surplus value. His survival as employer depends upon his ability to do so successfully. Surplus value is the reward of his capitalist ownership. His success is measured by the degree of exploitation to which he can force his employes to submit—the larger the volume of surplus value, the more successful his enterprise. He does not only want profit but all the profit possible.

If the worker demands an increase in his wages of

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