mastershake16
12th January 2010, 02:27
Hello,
I can't fully grasp how wages rise and fall and am looking for some help.
Here is the paragraph from "Wage Labour and Capital"
"Real wages may remain the same, they may even rise, nevertheless the relative wages may fall. Let us suppose, for instance, that all means of subsistence have fallen 2/3rds in price, while the day's wages have fallen but 1/3rd – for example, from three to two shillings. Although the worker can now get a greater amount of commodities with these two shillings than he formerly did with three shillings, yet his wages have decreased in proportion to the gain of the capitalist. The profit of the capitalist – the manufacturer's for instance – has increased one shilling, which means that for a smaller amount of exchange values, which he pays to the worker, the latter must produce a greater amount of exchange values than before. The share of capitals in proportion to the share of labor has risen. The distribution of social wealth between capital and labor has become still more unequal. The capitalist commands a greater amount of labor with the same capital. The power of the capitalist class over the working class has grown, the social position of the worker has become worse, has been forced down still another degree below that of the capitalist."
Does this mean since the price of means of sustenance on the market have dropped 2/3 and the wage of a laborer has dropped 1/3, is it almost like having the laborer get a raise? The prices have dropped 2/3 and the wage only 1/3, so is he decreased wage actually worth, 1/3 more? He is able to buy 1/3 with the lower wage due to the lower prices than he was able to with the higher wage and higher prices?
How come the price just drops a 1/3? does the factory owner just say, okay the market prices are down so I'm cutting your wage?
What else determines price besides cost of production?
Say the cost of production is 10$, what does the business owner do to make a profit? Just add a 50% markup? So he would be making a profit of 5$?
Price= cost of production + markup?
If anyone could explain this further in simple terms It would be greatly appreciated.
I can't fully grasp how wages rise and fall and am looking for some help.
Here is the paragraph from "Wage Labour and Capital"
"Real wages may remain the same, they may even rise, nevertheless the relative wages may fall. Let us suppose, for instance, that all means of subsistence have fallen 2/3rds in price, while the day's wages have fallen but 1/3rd – for example, from three to two shillings. Although the worker can now get a greater amount of commodities with these two shillings than he formerly did with three shillings, yet his wages have decreased in proportion to the gain of the capitalist. The profit of the capitalist – the manufacturer's for instance – has increased one shilling, which means that for a smaller amount of exchange values, which he pays to the worker, the latter must produce a greater amount of exchange values than before. The share of capitals in proportion to the share of labor has risen. The distribution of social wealth between capital and labor has become still more unequal. The capitalist commands a greater amount of labor with the same capital. The power of the capitalist class over the working class has grown, the social position of the worker has become worse, has been forced down still another degree below that of the capitalist."
Does this mean since the price of means of sustenance on the market have dropped 2/3 and the wage of a laborer has dropped 1/3, is it almost like having the laborer get a raise? The prices have dropped 2/3 and the wage only 1/3, so is he decreased wage actually worth, 1/3 more? He is able to buy 1/3 with the lower wage due to the lower prices than he was able to with the higher wage and higher prices?
How come the price just drops a 1/3? does the factory owner just say, okay the market prices are down so I'm cutting your wage?
What else determines price besides cost of production?
Say the cost of production is 10$, what does the business owner do to make a profit? Just add a 50% markup? So he would be making a profit of 5$?
Price= cost of production + markup?
If anyone could explain this further in simple terms It would be greatly appreciated.