08.04.1999

Fight for what we need: The living wage and socialism

What the system can afford is not the concern of communists, writes John Walsh. The demand for £300 per week minimum income must be part of a revolutionary programme

The debate on the national minimum wage is far from new. Seventy-two years ago Ranjani Palme Dutt’s book of the same title as this article discussed the question. In fact during this period a minimum wage was implemented in a variety of countries and in Britain boards were introduced that guaranteed minimum wages for people in the ‘depressed trades’ - industries such as catering and farming where the degree of trade union organisation was so weak that the government decided to act itself to alleviate the very worst examples of low pay and long hours.

Actually from 1945 to the mid-1970s a combination of full employment and trade union strength maintained wages. It was Thatcher who abolished the wages boards. However, since World War II a number of measures have been in place that themselves are very much like the outdoor relief of the 1820s. Working family income supplement is the latest of these, though in many respects housing benefit has been the most important in maintaining standards of living.

Looking at wages in 1927, we would find that a miner in Britain would receive about £2 per week, in the USA £6, and in India five shillings (25p). It is very difficult to translate these figures into modern terms, because inflation is uneven in its effects on different classes, income levels, countries and cultures. In addition many products necessary for a normal life today are completely different from what was needed then. However, as a very rough approximation, these wages were the equivalent of around £80, £240 and £10 per week in present-day terms.

These figures represented the cost of labour. There is a similar ratio amongst the same countries today, though we might replace India by Indonesia. It must be understood, however, that this is the price of labour power, not its value. In the case of the USA there was an acute shortage of labour, particularly of skilled labour; on top of this, there was a booming economy and thus the price of labour power was well above the cost of its replacement.

In India the reverse situation probably prevailed insofar as the labour used was unskilled and mineworkers were not being replaced from amongst themselves, but were simply being recruited from the surplus population generated in the countryside. In all underdeveloped countries a condition exists where the towns’ population is constantly being supplemented in this way. This is obvious even in places like South Africa, where disease, crime and social disruption make it highly difficult for the urban population to maintain itself.

The arguments put forward about the inability to provide an income that would enable the replacement of the population to take place were also put forward in Palme Dutt’s day. That is, it would make Britain (or nowadays Europe perhaps) uncompetitive and cannot be afforded. However, when the Communist Party puts forward a demand for a minimum income of £300 per week per adult, it does not do so on the basis that this is what the bourgeoisie can afford.

We make such a demand because this amount of money is required under current conditions as a minimum to reproduce ourselves at a biological and cultural level necessary for the modern world. This is taken in a situation where the current tax laws exist, and there is a largely free health and basic education service. Obviously if circumstances changed, such as with the provision of, for example, free nursery education or conversely the abolition of the NHS, then the necessary minimum would also change. Either way, it is self-evident that the government’s £3.60 per hour is far below what is necessary. So too is the SWP’s £4.60 as advocated in its much vaunted ‘Action programme’. SPEW is better. It calls for £7.00 per hour, but is prone to water down this minimum in face of the practical requirements of its members in the upper echelons of the trade union bureaucracy. Again, however, SPEW’s method is wrong - its figure is derived from the EU’s decency threshold - not working class needs.

It is never possible to talk about a minimum wage without also taking into account the number of hours worked and the conditions of employment, because the standard of living is partly determined by what free time individuals have at their disposal. That is why the CPGB demands not only a minimum £300 weekly wage but a 35-hour maximum working week. One of the most crushing effects of long hours before the introduction of the eight-hour day in Britain was the consequent neglect of children, not only in terms of their education and general health, but also their diet and hygiene. This is why the Communist Party not only puts forward demands for the limitation of the working day, but also for special protection for nursing mothers and people involved in dangerous and arduous work.

The question arises as to what is a living income. In 1994 the Weekly Worker produced an analysis which suggested that an adult’s income (person over the age of 16) needed to be in the order of a minimum of £250 per week in order to produce and reproduce human beings at our level of culture. This analysis was coincidentally confirmed by two university studies published separately within months of our publication (if anything, our figures were shown to be on the conservative side).

Our table shows that a working class family, consisting of two adults and two children, requires over £600 per week - or £300 per adult. Of course we are not talking about what is necessary just for survival - clearly a much lower figure would apply if that were the case. We are discussing an income level that enables the individual to begin to operate in a manner that fulfils the social role they occupy in society - and allows for the upbringing of children at a level which prepares them culturally for a similar full role.

In actuality, the working class does not depend entirely on earned income or benefit for its survival and reproduction. A young couple’s parents or relatives contribute to the cost of bringing up children - by providing money, baby-sitting or help with domestic work. Parents leave money or housing to their children on their death. Clothes and other necessities for a new baby are often given by grandparents, aunts and uncles.

Taking all these things into account, the cost of reproduction for the working class is one way or another borne by the working class as a whole - and not just through individuals receiving help from friends and family. Much of it is borne by the provision of education, school dinners, medical facilities and a host of other things which are transferred from one section of the working class to another by way of taxes on our wages.

In 1927, the anti-communist Australian Labor Party was actually arguing against a minimum wage on the grounds that it would boost the income of single people in comparison to that of families. According to Labor in Australia, family allowance would be a better method of raising the minimum income, as it would be directed to those in the process of raising children. I assume it is not necessary to draw comparisons with the same type of argument we face today. Indeed, Blair specifically proposes a lower minimum wage for persons under 21, irrespective of their marital status.

Still the question of what is necessary remains. Were people prepared to live at four to a room, and have a diet consisting mainly of oats and kale, they could manage to live and biologically reproduce on probably less than £20 per week per person, even at current prices and with no extra subsidies. If this is doubted then a quick look at the Scots’ rural diet in the 19th century will show that it was possible not only to reproduce, but to reproduce healthier specimens than were often being produced by the working class in the cities at that time.

The problem with attempting to survive on next to no money is that you need immense amounts of time and skill to get the cheapest cuts of meat, or vegetables from the market at closing time, and to do household repairs yourself. It not only requires time, but also equipment and a particular cultural background. In other words to live cheaply actually requires resources and education. It goes without saying that people who do survive on an extremely low income are by and large unfit for any useful social role.

Advanced capitalism requires the mass of workers to attain a cultural level that enables them not only to read and write, but to drive cars, use computers and absorb huge masses of technical information. Children who do not reach such a level will usually end up as worst paid labour, thus ensuring that the condition is inherited by the next generation when their own offspring are unable to break out of the circle.

In my view, the falling birth rate can at least partly be explained by the high cost of raising children. The rate required for reproduction of the population - allowing for infant mortality, etc - is around 2.2 children per woman. In 1996, only two countries in Europe - Sweden and Iceland - had a birth rate greater than replacement level. Britain’s was 1.8, while Spain’s was 1.2.

The production of ‘high quality’ people in terms of education is not determined just by their individual standard of living, but also by a cultural level of society as a whole. This requires that a high standard of living is maintained over a long period of time. If a class or section of a class experiences a relatively short period of poverty or disruption it does not necessarily damage their social usefulness, but if it persists a negative culture - not only from the point of view of capitalism’s requirements, but ironically also from the point of view of the working class - is liable to develop.

We must demand a living income that is not only sufficient to sustain us biologically and culturally, but sufficient to reproduce ourselves at a higher cultural level. We must certainly be aware that if capitalist governments introduce a minimum wage on their terms it could in reality act as a maximum for many workers.

Our demand for a minimum wage which genuinely meets the basic reproduction needs of the working class has nothing to do with socialism in a direct sense. However, the fight for such a minimum, if fought for politically by the whole class as part of a revolutionary minimum-maximum programme, can lead to a developing challenge to the rule of the bourgeoisie. The demand for a minimum income is not just in the interests of individual workers; it is also necessary for society as a whole. The production of labour power is like every other product: it depends on a certain amount of input. Society needs not only to ensure its workers have the necessary cultural level, but also to prepare children for active adult life.

In the past only a tiny proportion of the population would have a wide social, scientific and cultural education. Today high capitalism needs not just a few hundred such individuals, but hundreds of thousands, if not millions. And mass production, not least of such people, has always proved cheaper in the long run. Nevertheless what is happening at the moment is that bourgeois society is also mass-producing a lot of individuals who are simply unable or unwilling to fit in with its social requirements. The most advanced capitalist country, the USA, has built prisons for two million people - mainly black. That might ensure huge profits for the ‘security’ industry, but is neither efficient nor morally acceptable.

This production of a lumpen proletariat is alien to the interests of the working class There is no room for labour aristocratic disdain. The advanced part of our class - which politically defines and makes itself - must fight for the whole, and that in no small part means winning the minimum wage necessary for any decent sort of life

There still remains the question of whether the demand for £300 per week per individual is ‘possible’. It is worth quoting The New Leader of January 8 1926:

“If we talk of a living wage of £8 or £12 for every worker, the agricultural labourer would most justly laugh at us. Nor would it be much more honest at this stage to talk of a wage of £4 for every worker. The whole wealth produced in this country today, however ruthlessly you divided it, would not yield such a wage all round. Ours is a poor country under present management. Until industry has been drastically reorganised, it cannot pay a genuine living wage. Any figure which we could honesty promise at once would mean a big gain in basic wages only to men and women in the more depressed trades.”

These arguments will no doubt be familiar to Weekly Worker readers. At that time, it was not true that the system could not provide a minimum of £4 per week (modern equivalent - £160). In fact the level of underconsumption resulting from an average wage for a male worker of one pound, 15 shillings (£1.75) was one of the factors which led to industry producing 13% less than in 1913, even though productivity of labour had increased by 37%.

This led John Maynard Keynes to argue for budget deficits to finance spending. He faced opposition from the Tories, and for that matter Labour too, who claimed that sterling was under threat. A ‘strong pound’ was necessary for Britain’s economic recovery, they said. More familiar arguments.

There are no real estimates of how much under-utilisation of productive capacity really exists at the present time, but it must be at least 20%. The underemployment of labour itself cannot be less than the equivalent of six million adults (25% of the employed labour force). Despite this the actual per capita production in Britain at the moment is already way above the figure required to finance £300 per week per adult. Such a figure would consume around 75% of the gross national product.

But concern for what the capitalists can afford is hardly uppermost in our minds. We demand what our class needs - not a penny less.

What we need

Weekly expenditure for two adults and two children (£s)¹

Food² 80
Alcohol and tobacco³ 30
Housing⁴ 100
Fuel and light⁵ 35
Household goods, furniture and tools 50
Household services 45
Personal goods and services⁶ 40
Clothing and footwear 50
Transport⁷ 60
Leisure and holidays 70
Miscellaneous⁸ 50
Total 610

1. The relationship between the above items of expenditure does not exactly replicate the weightings given by official Department of Employment figures, and this is deliberate. I have assumed a working class family of two children and two parents, which is not representative of society as a whole. The reason for choosing this model is explained in the article.↩︎

2. Of course it is always possible to live more cheaply (or more expensively), but the figure given here presupposes that some meals are taken out; that the family shops at big supermarkets (and therefore has a car); and that, because of constraints of time, they do not necessarily choose the cheapest items or those which take a great deal of preparation.↩︎

3. The figure is complicated by the fact that the working class poor tend to smoke and drink more than the more prosperous sections of the population.↩︎

4. This is the most varied of all expenditure. For the purposes of this table, the figure of £100 assumes the purchase of a £50,000 house on a 25-year mortgage, with the householders being capable of doing most of the minor repairs, but paying insurance, council tax, etc.↩︎

5. A family with more than two children will spend proportionately more than the population as a whole.↩︎

6. This figure includes not only such items as toiletries, etc, but also library charges, membership fees, etc.↩︎

7. This figures assumes a £5,000 car, depreciated over 10 years, used for work, holidays, etc (200 miles per week), and includes road tax and insurance with major repairs only carried out a garage. No parking or garage facilities are assumed.↩︎

8. Expenses here include household and life insurance, newspapers, stationery, telephone bills, postal expenses, the cost of credit, and 101 other items which arise regularly or occasionally (eg, dental bills, prescription charges, etc).↩︎