“Has anyone here ever worked for McDonald’s?”
"Yes"
“And the pay...How was it?”
“It was terrible, about $7.00 an hour...We were exploited, man.”
“Exploited? How so?”
“We should’ve been getting at least 9 or 10 bucks an hour,”
“You just have no idea! Let’s look at how Karl Marx saw it.”
McDonald’s, like all capitalist institutions, pays the burger flipper for her/his “labor power,” not their actual “labor.” Labor power,” means that the boss will pay you an iron-clad wage, say $7.15 an hour, but then use all available means—surveillance, coercion, technical control—to extract every possible drop of labor from you. Your labor added enough value to the hamburger to pay for your hourly wage in the first 20 minutes of your labor. In other words, you work for free for a large percentage of the work day.
Let’s compare two sets of time behind the grill at a McDonalds. One time, during a rush hour, 5-6pm. The other time during an average hour’s work.
The worker frantically flips 210 hamburgers between 5pm and 6pm, besieged by the dinner rush. He cooks them under attentive eyes, adds the ketchup, mustard, pickles, and wrappers and presents them down the silver chute. Big Macs and cheeseburgers require extra preparation. The burgers are sold at $1.00 per bun. The cook has contributed some valuable labor (in addition to all those other laborers who to raised the cows, slaughtered and butchered them, transported the meat, built the machines advertised and marketed the corporation etc.) to help McDonald’s bring in $210.00 in sales for that hour.
Two hours later, between 8pm and 9pm, the rush is over, and the worker returns to flipping the average rate of 70 burgers per hour. He’s still quite busy, but that hour McDonald’s sales from the burgers drops to $70.00
“Question: Given that the worker performed three times the labor in the first hour than the second hour, helping his boss gather $210 versus $70 dollars in sales, how much more money did he receive in compensation for the rush hour?”
“None, he still gets the same,”
“Yes, not a cent more. The worker is still paid the $7.15 per hour with no benefits.” He is paid for his “labor power,” his ability to perform as a virtual “wage slave,” i.e., his ability to take orders and perform potentially limitless amounts of work at his supervisor’s insistence, not a price for the actual results of his labor. The worker is like a Golden Goose.
But, in fact, if the worker was paid for his actual labor, he would have made approximately $64.35 for the rush hour and about $21.45 for the second (average) hour of work. That would be closer to the value that he added.
That’s why Karl Marx compared capital to a vampire. “Capital is dead labor, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks.” Capital, Volume 1.
Some people actually try to justify their exploittion, crediting the “job creators” for giving people like them a job, a chance to survive. “The capitalist takes the risk and deserves the money. Workers are lazy and need to be managed,”
“Aren’t workers the wealth creators? Where do profits come from?”
“Supply and demand ...raising prices at the store”
It’s as though they never understood.
The essence, according to Marx, is that labor creates all value.
“Under capitalism you are paid by a unit of time – the hour, NOT by a unit of production – like the burger. In short, capitalism is theft. The source of profits is you, from your stolen labor.”
Harns Ehrba, a political economist who teaches at the University of Utah, explained how he teaches Marx’s labor theory of value. “I tell my class that their wage is roughly half of the value created by their labor,” he said. “To compute [the amount of value added by the burger flipper per hour] you would need to subtract the cost of materials and equipment transferred to the burgers from the price of the burger,” he said. “You cannot use firm-data for this, because due to the equalization of the rates of profit, some of the surplus-value created by labor intensive firms shows up as profits of capital intensive firms. Both of these objections can be remedied if you use national income data.”
Ehrbar explains “I can back this up by the following simple calculation. According to the Bureau of Labor Statistics total employment in the US is presently 142,974 thousand. With 52 weeks in the year, this means that 142974 x 52 =7,434,648 thousand weeks, or 7.434648 billion weeks, are worked every year. According to the US Bureau of Economic Analysis Gross Domestic Product in the third quarter of 2012 is at such a rate that for the whole year this would give $15,775.7 billion current dollars. Dividing this by the number of weeks gives a value produced per person-week of $15,775.7 / 7.434648 = $2121.92 in current dollars. Now the BLS gives the “median weekly earnings” as $760 per week. Dividing this gives 760 / 2121.92 = 35.8 percent. Including benefits, and making all the other adjustments which need to be made here one gets probably that average wages are a little less than half of the value created by the worker.”
“And the McDonalds wages?”
“Wages at McDonalds are probably only a third of the value created, [that is $7.15 * 3=$21.45 for an average hour and $64.35 for the rush hour] because unskilled laborers are in a worse bargaining position. Even those with a so called well-paying job get only about half of the value created by their labor. It’s also important to remember that a piece wage for a burger flipper is not the solution. Even if they are paid piece wage, their piece rate per hamburger will still only be 1/3 of the value they add to this hamburger.”
Ehrbar said he made a very similar calculation in 2007 using the exact same source data, and got a more favorable outcome for the workers: their earnings were 40.0 percent of value created. “I think the difference can be explained by the speed-up since the 2008 crash.”
Dr. Jim Devine confronts the notion of “job creators.” by arguing “Yes, capitalists are job creators. But because of the way that capitalism is set up (with a small minority owning the means of production and the rest not), and only they can afford to create jobs — and they only create jobs when they feel “property remunerated” (i.e., receiving a significantly positive rate of profit). Creating jobs is not the primary goal of a capitalist economy. Creating profits for the purpose of capital accumulation and expansion is the sine qua non and essential function of Capitalism. Profits are what count. Jobs are the means to that end. Worse, the way that the system means that only the small minority — call them the 1% – can be job creators. If capitalists attempt to justify their way of making profit by saying that they have to run risks sometimes, that a part of their property might occasionally be lost, we answer that labour has nothing to do with that. The real cause of it is the competition among the employers, the custom to produce at random without investigating whether what is produced is really wanted. For the class of capitalists overall there is no risk, because its wealth increases every day. Just 10 Americans made a total of $50 BILLION in one year. America's richest 10% make $4 TRILLION in one year. But of course they earned it, their defenders claim becqause they are risk-takers? According to both Marketwatch and economist Edward Wolff, over 90 percent of the assets owned by millionaires are held in a combination of low-risk investments (bonds and cash), personal business accounts, the stock market, and real estate. But there is a great risk for the working class. When business is slack, when wages go down, when many workers are out of employment. The capitalist employs nobody, and pays no wages, unless he can make a profit out of it, and add to his wealth. Individual workers can almost never afford to become self-employed — while the vast majority of those who do find themselves out of business very quickly.
The McDonald’s corporation has grown into a multi-billion dollar business and its practices has been coined as “McDonaldization.” Under “McDonaldization,” advancements in technology are used to deskill and control workers, and follow the McDonald’s corporate model. McDonald’s incorporates similar mechanisms of command at each of their 11,800 locations to increase productivity and ensure product standardization. Employees are given minimal to no individuality in their work. The various jobs at McDonald’s restaurants are specialized and repetitive to foster speed and efficiency, and employees are expected to conform to a predetermined set of rules and regulations. To ensure their compliance, technological advances such as computers and cameras are utilized as monitoring devices. In addition, work schedules are adjusted to clientele volume in order to allow for the maximum amount of corporate productivity. This economic model has been employed by various companies throughout the capitalistic world, in attempt to remove any individuality, creativity, and freedom in the workplace, thus placing the worker in an easily expendable and replaceable position. Marx would consider McDonald’s employees to be an “appendage of the machine”
Adapted from here
Even the capitalist press is unable to hide the operation of Marx’s theory of surplus value:
" Big U.S. companies have emerged from the deepest recession since World War II more productive, more profitable, flush with cash and less burdened by debt.… Overall, the [Wall Street]Journal found that S&P 500 companies have become more efficient—and more productive. In 2007, the companies generated an average of $378,000 in revenue for every employee on their payrolls. Last year, that figure rose to $420,000."
In other words, each worker produces on average $420,000 worth of wealth, minus raw materials, tools, machinery, advertising, etc. Even applying extremely conservative figures, let’s say that all these latter “fixed” costs account for 90% of total production costs. That still leaves $42,000 per worker.
And even if the worker is paid an amount that would put them on the high-end of the national average workers’ wage — around $35,000 (which for Starbucks or McDonald’s workers would realistically be more like $21,000) — we then are left with around $7,000 in surplus value for each worker.
And this is where profits ultimately come from — it is the difference between the total new wealth a worker generates in the course of their labour, and the portion of that wealth that goes back to the worker in the form of wages (and benefits, if lucky or unionised).
If a company employed half a million workers nationwide, at the rate cited above, they would have made $3.5 billion in surplus value, or profit, last year (which is approximately what McDonald’s actually reported).
When the Wall Street Journal says that companies have become more “productive” and “efficient,” what they are really saying is that the rate of exploitation has increased. That workers are being payed a smaller and smaller share of the total wealth they are creating.
Thus, theft, plain-and-simple, on the part of the capitalist against the worker, lies at the heart of our entire economic system. It is the reason why the 1% richest Americans who own these companies constantly get richer, while the rest of us see our wealth either stagnate or decline.
One of the main points of Capital is that despite the absence of the direct application of force, the nature of capitalism as a society means that workers are exploited despite their freedom. As Marx wrote, ‘the laborer purchases the right to work for his own livelihood only by paying for it in surplus labor’ ”
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