The Exploitation of Labour

The labour market as it stands is awash with exploitation. Low-skilled workers are treated as temporary labour to be used at a whim, with no ability for such workers to organise and demand job security and a wage relative to their circumstances. There are two main reasons for this. The first are wage and employment laws which lock low-skill workers into low-paid jobs. These laws create a wage ceiling which many corporate employers exploit as a means of paying the minimum and providing minimal hours. Second are the anti-trade union laws put in place by Thatcher that have allowed for a hegemony of modern corporate unions that talk the rhetoric of workers’ rights but frankly aren’t up to it. This creates a case of no choice for low-paid workers, who are effectively forced into employment they may not necessarily enjoy. This means that we need a repeal of all current employment and wage legislation which is creating the conditions of enforced employment, and second the end of entry barriers that prevent both radical trade unionism and the ability to develop self-employment and worker-owned enterprises.

There are two main models of the labour market as it currently stands: the monopsony model and the dynamic labour market model. Both have their flaws and are relevant to how the labour market currently works. With the monopsony model, it is assumed that there is a large amount of exploitation by certain employers or companies. Workers are said to be paying less than their marginal product and are being used as underpaid labour. The dynamic model states that there are large information asymmetries in a labour market for both employers and employees, and that the best way to determine one’s wage is through negotiating an employment contract so the worker gets the pay they want and the employer can still afford to operate. In the modern labour market, both are true to some extent. Take the monopsony model. If we look at low-skill labour, what we see is a large swathe of zero-hours contracts and economically precarious employment in low-skill sectors. We see many more adults in such employment while previously these jobs were taken by younger people. This seems to be caused by a combination of entry barriers to self-employment and higher-skilled employment as well as an ability to collectively bargain due to trade union laws which have monopolised trade union activity. This then crowds out the ability of the dynamic model to function, as such an economically precarious employee is in such a position of weakness they have no ability to develop a meaningful employment contract, and are kept in this low-skill work that they may not want to be in. An example of this is at my very university (University of Warwick) where we see PhD tutors being paid quite low amounts in relation to the work they do, as well as a large swathe of low-skill staff who are employed through temporary contracts or even employment agencies. This is inevitably going to have an underemployment effect, trapping such individuals in work they don’t want to be in. I once wrote against PhD tutors organising and demanding better wages in The Case Against the Unproductive Wage. However this position was one of ignorance, as it failed to take into account the power dynamics at play within Warwick’s employment. We have to remember that due to the work that PhD tutors do, the University of Warwick creates a large neighbourhood effect which allows for the development of a monopsony type situation within this particular pocket of the labour market.

Now does this mean I think all employers are exploitative. No, of course not. However if it is to be thought that all employers are nice, happy-go-lucky people looking out for their employees best interests then we’re living in a dream-world. To counteract the power of the employer as it stands, we need to empower the employee when it comes to creating an employment contract. This means ending minimum wage laws as well as other employment laws. These regulations favour big business, as they effectively price their competitors out of the way through a restricted labour market. We already see it when groups like the CBI or the U.S. Chambers of Commerce call for higher minimum wages and more stringent labour regulations. This is corporatism at its purest. Anti-trade union laws also need to be repealed, as they themselves have monopolised the field in terms of trade union creation. What we see now, particularly in the private sector, are a series of corporate unions that work hand-in-hand with the management. Radical trade unionism would allow for better pay and an end to the exploitative measures of corporations and universities. It would also create different avenues of employment, as trade unions would be able to set up their own businesses in competition against hegemonic businesses. They could suck employment away and allow for better working conditions. Moreover this would allow for the development of company unions, where employers and employees can work together in their approach toward job security, fair employment terms and good pay. However for any such system to work entry barriers found in most sectors of the modern economy need to go. The development of worker owned businesses and the ability to become self-employed would become much easier and allow for worker independence away from the corporate employer. Further by ending entry barriers, it would allow for the development of democratic forms of finance such as cooperatives or mutuals. Finally the creation of a universal basic income would mean the full independence of the worker from the labour market. The pursuit of one’s interests and ideas as Marx theorised would become possible under a UBI.

Labour regulations, in the form of wage laws in particular, are the most blatant forms of cronyism we see today. They lock the worker into a system of dependence on corporate employment where they are provided the bare minimum and given terrible hours. The University of Warwick is just one epitomization of this trend. The labour market at this moment is exploitative, and for this to end we need free labour markets, where the negotiation of wages and hours is left between employers and employees or employers and trade unions. This restores the link between employer and employee and ends the faceless employment of which state-backed corporations are so fond. It provides choice and the ability to develop a life that is actually enjoyed, rather than one where the drudgery of low-paid work is suffered through.


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