Don Franks

The 25 cent government increase in the minimum wage from 1st April was denounced by union leaders as “a cheap shot’ and “mean.”

The increase to $12.75 from April 1st, 2010 is an annual increase of only two per cent. The NZ Institute of Economic Research inflation forecast is 2.3 per cent for the year to March 2010 and the average wage rose 2.8 per cent in the six months to September 2009 alone. That suggests the lowest paid workers are going to be relatively worse off than they are already.

Unsurprisingly, there’s increasing public concern about poverty wages. The January 18th New Zealand Herald reported :

“Sixty-one per cent of people want the minimum wage lifted to $15 an hour, a Herald Summer Survey has found, weeks before the Government is to set the wage for this year.”

Grabbing his chance to score points, Labour’s Trevor Mallard blogged on January 20th:

“I think it is time for the government to commit to $15 an hour from either 1 April this year, or 1 April next year at the latest.

From the safety of opposition Trevor talks tough. The real value of his words can be assessed by recalling Labour’s last election policy on wages:

“We acknowledge that there have been calls from a number of quarters to lift the minimum wage to $15.00 an hour. Labour would like to meet this target if possible, but in the current economic circumstances we are not able to commit to doing so”.

Following his hypocritical opposition call for a minimum rise, Trevor Mallard set out a recipe for fixing the problem altogether, claiming:

“Most employers know that lifting wage rates encourages investment in capital equipment and training to make their labour force more productive. It is all part of the movement to a high skill, high wage economy”.

Is Trevor right? Are “most employers” down with a combined programme of wage rises and training, so that eventually we all finish up happily ever after in a “high skill, high wage economy”?

If you suspect the answer to universal prosperity is not as simple as that, you’re probably not alone. In fact, Trevor Mallard’s politicking on wages is just self serving bollocks. His high skill/high wage formula is necessarily a fairytale, because exploitation is built right into the wages system of capitalism. Out of what fund does capital pay workers’ wages? Out of capital, of course. But capital by itself produces no value. Workers’ labour power is, besides the earth, the only source of wealth; capital itself is nothing but the stored-up produce of labour. So that the wages of workers are paid out of labour, and workers are paid out of their own produce. According to what might seem common sense ‘fairness’, the wages of the labourer ought to be the value of his or her efforts. But labour power has the special quality of producing more value than it takes to maintain itself. A worker selling forty hours of labour time to a capitalist for a payment of $600 produces the value he/she is paid for in a fraction of the working week, sometimes in less than one day. The rest of the forty hours is surplus value for the capitalist.

As the famous German socialist Fredrick Engels put it:

“the end of this uncommonly “fair” race of competition is that the produce of the labour of those who do work, gets unavoidably accumulated in the hands of those that do not work, and becomes in their hands the most powerful means to enslave the very men who produced it.”

Engels proposed as a solution:

“Possession of the Means of Work — Raw Material, Factories, Machinery — By the Working People Themselves.”

A sensible and logical solution, although obviously we can’t go out and take that possession tomorrow. Such an action would require the conscious militant unity of the majority of the working class. The achievement of a socialist solution to poverty wages is a monumentally huge struggle. The unavoidable truth is that a socialist solution, though difficult, is actually possible, unlike Trevor Mallard’s implied high wage for all under capitalism, which is completely impossible.

In the weeks and months ahead workers will continue to struggle for higher wages by means of the Unite union’s $15 minimum wage campaign, contract negotiations and strikes. These struggles deserve the support of all workers and will benefit some sections of the class, but cannot solve our overall problem. Growing poverty continues to haunt New Zealand and, as indicated in the beginning of this article, the trend for the lowest paid is ominously downwards.

Workers owe it to coming generations to face the challenge that history has left us – the need for a socialist solution to poverty. The alternative is the certainty of our children’s children’s children’s ragged children bewailing the government of their day as “cheap shot” and “mean”.

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