URPE Newsletter

Vol. 50 No. 4

December 2024 

And introducing …the URPE Forum! A fully online platform that will replace the URPE newsletter starting in 2025

Dear URPE members, comrades, and friends,

The Steering Committee is pleased to announce the transition of the newsletter to the new URPE Forum, starting January 2025.

The Forum will be hosted on the URPE website and will accept articles on a rolling basis, which will be posted online once they are accepted. Membership will be alerted to new content through the announcement and discussion listservs.

The purpose of the newsletter (now Forum) will remain the same under the new format:  it will provide a venue for serious discussion of today’s critical and challenging issues, beyond the scholarly work of the Review of Radical Political Economics, and hopes to provide the URPE listserv with more deliberative contributions.

Articles submitted to the Forum can include longer essays, commentary, op-eds, letters to the editors, or writings on any issues of concern to URPE. Graduate students and early-career scholars are especially invited to contribute on matters of current relevance to radical economists.

Submission must include a 50-word short bio and a 250-character summary of the main arguments (for social media).

Contributions will be reviewed and edited by our editorial team, comprising of Marianne Hill (senior economist, emerita, MS University Research Center), Ann Davis (Retired, Marist College), Smita Ramnarain, University of Rhode Island, and Daniel Ossa, University of Denver.

Please submit your contributions to the URPE Forum by clicking on this link.

Introduction to the URPE Newsletter, Vol. 50, No. 4

In this last issue of the newsletter, the challenges of building unity on the left are addressed in an Op Ed by Julie Matthei, and an analysis of political economy with new insights is provided in the essay by Jack Rasmus.

As always, the newsletter (now the Forum) takes seriously the challenge of “political economics,” in a time of polarization, military conflict, and unrest.  Our objective is to provide a venue for serious discussion of political issues, beyond the scholarly work of the Review of Radical Political Economics, and to supplement the URPE listserv with more deliberative contributions.  The Newsletter/Forum is interdisciplinary in methodology, reflecting the work of Marx across the modern disciplines of history, political science, economics, and psychology, among others.

The contributions in this issue include:

1. “Calling for Unity: Trumping Trump” by Julie Matthaei, pp. 3-7.

This op-ed by Julie Matthei warns again the identity politics trap, and argues for a new form of unity politics, against both class and capitalism.

1. “Labor Exploitation in the Era of Neoliberal Policy Regime” by Jack Rasmus, pp. 8-28.

Jack Rasmus provides a distinction between primary and secondary exploitation from Marx. Primary exploitation is at the workplace, while secondary exploitation is beyond the workplace. Secondary exploitation can include deferred wage payments, like pensions, interest on household debt, price gouging and other ways of clawing back wage payments. These two forms of exploitation have intensified under neo-liberal capitalism, increasing the rate of surplus value. 

Calling for Unity:  Trumping Trump

In order to counter Trump’s repressive vision of unity with a progressive one, we need to move beyond the equal opportunity and identity politics traps

Op-Ed by Julie Matthaei

One of the surprising themes in Trump’s acceptance speech at the 2024 Republican convention was his call for unity, which he made a few different times in the speech, but especially in this portion of the speech, near the beginning:

But as long as our energies are spent fighting each other, our destiny will remain out of reach. And that’s not acceptable. We must instead take that energy and use it to realize our country’s true potential — and write our own thrilling chapter of the American story. We can do it together. We will unite. We are going to come together and success will bring us together.

Trump was not talking directly about just white men or white people or Republicans uniting – he was speaking, he claimed, to all Americans:

I am here tonight to lay out a vision for the whole nation. To every citizen, whether you’re a young or old, man or woman, Democrat, Republican or Independent, Black or white, Asian or Hispanic, I extend to you a hand of loyalty and of friendship.

Trump’s declared vision was a multi-cultural multi-dimensional nationalist one, calling on all citizens to come together across lines of race, age, political party, and gender to make America great again. And true to these words, Trump did not directly attack or denigrate people of color or women or democrats or independents in his speech. Rather, he reserved his ire and threats for undocumented immigrants whom he portrayed as an invading army, giving examples of people who had been killed by them. He never mentioned race or ethnicity, focusing instead on a story that these “aliens” were prisoners, or mentally ill, or otherwise unscrupulous people who had been expelled from their countries and were being dumped on the US. With this analysis, he both satisfied racist supporters who knew that most of these immigrants are of color, and reduced or eliminated the offense that voters of color, especially Latinos, might feel at his remarks. Then, in true nationalist fashion, he went on to describe himself as a strong leader who had been able to dominate other leaders – Kim Jong Un, Putin, and “Abdul” (whom he described as the head of the Taliban).

These remarks electrified the crowd, as I watched in dismay. It felt like I had been catapulted back into the 1950s, pre-Civil Rights, pre-feminist movement days. Trump’s vision proclaims that we are all sisters and brothers and should unite and rise together, whilst ignoring the fact that we live within an economy and society that is still pervaded by institutionalized race, gender, and class polarization and domination. How could all of the deep cultural, social, and economic transformation brought by our movements have allowed Trump’s vision to resonate so powerfully with half of the American people? How could our movements have failed to make the hypocrisy in Trump’s words clear to all?

In a sense, Trump’s call for unity is post-racist and post-feminist. While never crediting Civil Rights or feminist movement (and simply ignoring LGBTQ+), he can be called feminist and anti-racist in the sense that he is not asserting race and gender as categories that make some citizens less than others. He is “extending a hand of loyalty and of friendship” to people of color and women as well as white men. The unity he speaks of is the basis of feminist, anti-racist, LGBTQ+, and worker movements – who argue, against a system which creates second class citizens of women, people of color, and LGBTQ+ people, that we are all equally human. Trump would not be able to speak of a multi-racial, cross-gender unity in this way, assuming a basis of equality, had our movements not established without a doubt that women and people of color have abilities equal to those of men and whites when given a fair chance.

To state the obvious, Trump’s nationalist vision of unity is one which denies that racist patriarchal classist capitalist practices and institutions are still alive and well in the U.S. It eliminates racism and sexism and classism by ignoring them.  It would seem that it would be easy to use the decades of Civil Rights and feminist organizing and transformation to counter Trump’s vision of unity with a progressive one: to offer a more evolved vision of unity that would inspire Americans of all races and genders. However, this is not the case. I believe that the ability of Trump and other conservatives to take our ideas and turn them against us stems from our movements falling into two “traps:” the equal opportunity trap, and the identity politics trap.

Equal opportunity anti-discrimination efforts strive to eliminate the gender and racial wage gaps, by raising wages for jobs traditionally assigned to women and people of color, and by winning access for women and people of color into the higher wage, more prestigious jobs previously monopolized by whites and men. They also support extra, “affirmative action” help in the process, so as to counter the historic burden of oppression faced by these groups. Barack Obama, Hilary, and now Kamala Harris are the most prominent examples, but there are many, throughout economy and society

The problem with these equal opportunity struggles is that when they are engaged in as a single-issue strategy, they accept the capitalist system and the class hierarchies that are at its core, as a given Capitalism’s, class hierarchy is a zero-sum game – what women and people of color gain, men and whites lose. So, while these anti-discrimination struggles, which the Democratic Party has embraced and advocated for, redress a key injustice, they have indeed taken away opportunities from whites and men. In doing so, they have created a real structural basis for anti-anti-racism (i.e. racism) and anti-feminism among whites and men, especially white men, which makes it difficult for the mainstream Democratic party to appeal to them, or make effective calls for unity to counter those of Trump.

With our critique of capitalism, left feminists and anti-racists have much more to offer whites and males in the working class, which can compensate for their losses of race and gender privilege. Therefore, it is important that we be careful not to uncritically join with and advocate for narrow visions of race and gender liberation that are restricted to equal opportunity within the system. Grassroots feminist and anti-racist organizing efforts are often aimed at the here and now; clarity about the need for economic system change can improve those important efforts, and make them more compelling to whites and men.

Another trap for anti-inequality movements — both liberal and radical — which has contributed to this anti-feminist, anti-anti-racist backlash, and provided fuel for Trump’s call for unity without feminism and anti-racism, is the identity politics trap. Racist values, practices and institutions differentiate whites from people of color and put the former above the latter; patriarchal ones do the same with men and women. Experiences of sexism and racism occur directly in day-to-day microaggressions from men and whites, as well as in larger sexist and racist economic social institutions. Thus, it is not surprising that the key advocates for feminist and anti-racist transformation have been women and people of color, respectively, or that much organizing has taken place in all-women or all-Black (Latino/Asian/Indigenous) groups. What has followed from this, though, is that the members of the group being struggled against – people who are men and/or white – are often projected to be the enemy, and excluded from the movement. When this happens, woman = feminist, man=anti-feminist, person of color=anti-racist, and white=racist. In other words, one’s racial or gender identity is seen as automatically determining one’s position in feminist and anti-racist movement.

More mature feminist and anti-racist groups – like Women’s March or Black Lives Matter – realized that all women are not feminist, all people of color are not anti-racist, and that men and whites can be and are often allies.  Thus, they include them explicitly in their movement-building.   But nevertheless, there is a tendency for feminist and anti-racist movement to fall into being anti-men and anti-white, even to insist that the latter cannot be feminist or anti-racist.  This tendency is oppositional and divisive. By naming whites and men as enemies, it alienates would-be allies, and gives fodder to sexist men’ and racist whites’ claims that they are being wronged by anti-discrimination and affirmative action policies. Trump and the conservative press focus on this tendency, attributing it to all feminists and anti-racists, and in doing so, succeed in alienating many whites and men, even white women, from these progressive movements. It is difficult for mainstream democrats to patch up this division with equal rights or anti-discrimination rhetoric.

More advanced, radical versions of feminist and anti-racist organizing can avoid the equal opportunity and identity politics traps, and in so doing, put forth a vision and call for unity that can trump Trump’s. We will focus on two antidotes to these divisive traps: intersectionality/solidarity politics, and anti-classist/anti-capitalist organizing.

Second wave feminism, which arose in the US in the early 1970s as a “women’s movement,” came up with the conception and practice of intersectionality in the late 1980s.  Lesbians, working class women, and women of color in the movement spoke up about their oppressions by homophobia, classism, and racism, within and outside of the movement, and separated off to form their own, homogeneous groups.  These other identities, they argued, intersected with their womanhood, and could not be split off. Through dialogue, coalition work, and working together, a progressive, intersectional form of feminism emerged dedicated to the eradication of sexism, homophobia, racism and classism — not just sexism.

Intersectionality intrinsically accepted that white women could be – and needed to be – anti-racist; that class privileged women could be – and needed to be – anti-classist; and that heterosexual women could be – and needed to be – against homophobia. Thus, feminist movement moved away from the essentialist and intrinsically oppositional view of itself as women fighting men – towards the view of people of all sexes, races, classes, and sexualities/genders, fighting against sexism, racism, classism, homophobia – i.e., fighting against inequality in general. The World Social Forum movement calls this the “movement of movements;” I call it, “solidarity politics.”  Note that this intersectional view of feminism, and of the movement of movements, includes class prominently in its list of oppressive processes to be transformed, thus serving as an anti-dote to the equal opportunity trap, and moving these movements towards the left. Also, progressive unions are incorporating feminism and anti-racism with their anti-classist organizing.

The second aspect of radical organizing that is key to a liberatory and transformative form of unity is the recognition of the fact that anti-class, anti-capitalist organizing is a required for liberation from any form of domination – race, gender, sexuality, etc. As we discussed above, struggles for gender or race equality within a sexist or racist capitalist economy mean upward mobility for the oppressed group and downward mobility for the formerly privileged group, causing opposition, causing opposition from the latter.  In contrast, anti-classist, anti-capitalist organizing challenges the very existence of class and labor market hierarchies, and the existence of poverty amidst wealth.  It calls for economic human rights for everyone – regardless of gender, race, or class:  not just on the right not to be discriminated against, but also the right to a living wage job, affordable housing, and free health care and higher education.

These are policies that receive wide support among the American people, as evidenced in the strength of support for Bernie Sanders’ 2020 democratic socialist platform. In this platform, he put forth a vision of unity – a vision that “raised all boats” – based on opposing all forms of discrimination, and guaranteeing economic human rights.

In its more developed forms – such as in the solidarity economy movement – this anti-classist, anti-capitalist, feminist and anti-racist movement aims at transforming profit-only-motivated production by exploited wage workers to serve the needs of capitalist owners into socially responsible production by worker-owners which serves all stake-holders. Solidarity economy practices and institutions – which embody values of cooperation, equity, sustainability, democracy, and pluralism — are growing around the country and offer another, complementary path towards unity.

As for Kamala Harris, there was much excitement among progressives that she could have been the first woman and woman of color to be president. Identity politics, yes, but also, yes, two huge milestones. However, the inability of Kamala – and the Democratic establishment — to find a way to talk about and embody race, class and gender liberation without falling into the equal opportunity and identity politics traps may have contributed significantly to their defeats. It is our job on the left to affirm and embody multi-dimensionality in our politics – especially an insistence on the inclusion of class analysis, as well as an insistence on economic system change and in doing so, help build a transformational and liberatory unity for the 21st century U.S.

Julie Matthaei, Ph.D., is Professor Emerita of Economics, Wellesley College. Co-Founder and Board Member, U.S. Solidarity Economy Network. She is the author of several articles and books.

Labor Exploitation in the Era of the Neoliberal Policy Regime

Essay by Jack Rasmus

Capitalism is a dynamic and constantly evolving global system. Its economic and political relations were restructured coming out of World War II (1944-48) as US Capital assumed dominance among its capitalist peers and consolidated its hegemony—both domestically and globally.

Those post-World War II restructured relations prevailed with minimal change for several decades, until beginning to break down in the 1970s. The answer of US Capital to the breakdown and challenges—domestic and global— to its hegemony in the 1970s was once again to begin to restructure capitalist economic and social relations in the final years of the 1970s and early 1980s and continuing the process thereafter. That most recent restructuring has been called ‘Neoliberalism’ by economists and social critics.

The direct consequence of Neoliberal restructuring was the further expansion of US capital geographically—sometimes referred to as ‘Globalization’—as well as the deepening of the role of finance capital within the system—sometimes called ‘Financialization’.

While much has been written of these two consequences, less has been paid to another even more fundamental consequence of Neoliberal restructuring: the intensification of labor exploitation in both Absolute and Relative value terms that has occurred from the 1980s to the present.

Concurrent with the beginning of neoliberal restructuring the early 1980s, traditional methods of primary exploitation in production relations intensified throughout many key US industries. Much of the impetus behind the further intensification of exploitation in production relations—i.e. primary exploitation–has been the US capitalist state undertaking a more direct role during the neoliberal period assisting Capital’s exploitation of the work force. This more direct State assistance has occurred as a result of new legislation promoting capital investment and mobility, new government administrative rulings disadvantaging unions and workers, trade treaties favoring Capital at the expense of Labor, assisting the rise and spread of new technologies displacing labor, promoting new business models that intensify exploitation, and enabling a host of labor market changes that have resulted in a further rise in exploitation.

This neoliberal period trend toward a deeper cooperation between State and Capital resulting in a further rise in exploitation has not been limited to primary forms of exploitation in direct production relations between Capital and Labor. It has taken the form of an increase in forms of what might be called secondary exploitation as well—where the term secondary exploitation has been defined as exploitation in exchange relations as defined by Marx defined in Vol. 3 of Capital.¹

At first the idea of secondary exploitation involving exchange relations may seem a contradiction in terms, given Marx’s traditional model of exploitation of labor in production. But it isn’t. Whereas Marx in Vol. 1 of Capital described how exploitation occurred in the production process associated with Absolute and Relative Surplus Value, in Vol. 3 later he explained how the share of value paid to the worker in the form of wages (or what he called labor power) was being clawed back by Capitalists after the wages were paid. Both primary and secondary exploitation thus together accounted for a rise in total exploitation.  In practice in the neoliberal era both forms of exploitation—primary and secondary—have been intensifying and expanding as the Capitalist state has assumed a greater role in assisting both.

Value-Price Relationships—Short vs Long Run

While Marx’s categories of Absolute and Relative Surplus measure labor exploitation in terms of value produced by labor in production instead of market price, it is possible nonetheless to estimate exploitation in market price terms (i.e. exchange relations) with certain assumptions.

Marx assumed, like classical economists Adam Smith and others before him, that value constitutes a core proportion of market price, around which further market forces determine the observed price in the market. Market price thus contains a core of value equal to a percentage of the market price. The percentage may be either positive or negative. That is, the market price typically exceeds the value within it. It may be less on occasion but not for long. The more typical case is market price selling for more than the value-price segment within it.

In the short run observed market prices fluctuate around their value core. In the long run, however, value will equal market price as Marx himself assumed. This idea of a core of value within the observed selling price is an idea that was held by other classical economists during and before Marx’s time. While Marx in some ways radically transformed classical economics by introduce exploitation as the driving force of Capitalism, he still largely developed his ideas within the classical economics conceptual framework.

Like many of his classical economics predecessors, much of Marx’s conceptual framework and analysis of exploitation depends upon assumptions that occur only in the long run. Thus, in the long run the core of value within market price will average out such that value and price were one and the same. In the short run the two diverged. Exploitation of labor of course occurred in the short run of everyday production relations, where Capitalists acted to extend the work day and kept the extra value produced by the worker while keep the value and wage paid the worker constant. Or where Capitalists, given a fixed work day, intensified the output of the worker by introducing machinery, technology, etc. but also paying the work no more in wages.

The question hen follows whether nearly a half century of neoliberal policy in the USA is sufficient to define the ‘long run’? This article will assume so. That means concepts that include elements of both value and price—i.e. like wages, profits, and interest—will assume that value equals price.

Thus, if profits rise while wages do not then it is assumed exploitation has increased. Or if profits and interest remain stable but wages fall, it is similar assumed exploitation increases. Exploitation may even increase if wages rise but profits and interest rise at an even greater rate. Put another way, if one is to discuss exploitation of labor based on wages paid in production—or clawed back in exchange—then the assumption that value is equivalent to price applies and one can analyze exploitation by employing Marx’s exploitation concepts of Absolute or Relative surplus value and by adding to that his later discussion of exploitation using his idea of secondary exploitation—i.e. capitalists taking back wages previously paid to workers.

Non-Marxist Estimates of Capital-Labor Shares as Proxies for Exploitation

If one assumes the equivalency of value to price in the aggregate across all industries it is possible to estimate the change in the rate of exploitation over time that has occurred during the Neoliberal era by comparing the relative trends between wages and profits.

Several sets of capitalist government statistics approximate the relative trends in profits vs. wages over time.  One set is called Relative Income Shares. While Capital incomes are composed of more than just reported profits, the latter are the largest component of capital income.² Similarly, Labor incomes are composed of more than wages but wages are by far the greatest element of Labor’s relative share of income.

A second set of statistics that one may assume estimates the aggregate trends and relations between profits and wages at the level of market price is the data and statistical analyses of economist Emmanuel Saez who since 1998 has been estimating the relative shift in incomes to the highest 1% (and 0.1” and 0.01%) households vs. the ‘bottom’ 99%-90% households. While not perfectly congruent, the wealthiest 1% households may be assumed to represent the income of owners of Capital while the bottom 90% mostly the income of Labor. The class lines obviously blur when one estimates higher than the 90%, or 95% or more, or even in cases below the 90%. However, 90% is probably a workable compromise.

Yet a third statistical source that one may assume reflects the relative shift from wage incomes to profit incomes is the gains from productivity accruing unequally to Capital over the past half century. Productivity generates incomes and thus can be assumed also to represent a proxy variable for shift in income shares.

In all three aggregate examples, whether in nominal or inflation adjusted terms capital incomes have been rising the past half century at a faster rate than have wage incomes. Moreover, that rate appears to have been accelerating in most recent decades as well.

In short, relative income trends between Capital and Labor may serve as high aggregate level reflection of relative shifts between Profits and Wages over time. Concepts of profits and wage contain both value and market price elements. However, if one assumes the long run and that value and price are congruent then it is possible to assume value has been shifting to Capital from Labor and exploitation therefore rising.

However, none of these proxy measures for the aggregate shift tell us anything about the mechanisms or legislative means by which the shift—and exploitation of labor by capital—has occurred.  An early look at the mechanisms was one of Marx’s great contributions in Vol. 1 of Capital. This was his conceptual innovation to classical economics analysis, in the form of the concepts of Absolute and Relative Surplus Value. More specifically: Absolute Surplus Value in the form of the lengthening of the work day; Relative Surplus Value in the form intensification of worker output given a fixed work time per day, due largely by means of either business organization of production, motivation to produce more, and introduction of machinery and technology that raises productivity. Productivity meaning simply producing more output per worker.

The point is during the neoliberal policy regime era that began in the late 1970s and early 1980s, both the work day and productivity has risen steadily. Real wages and take-home disposable income of workers have not.  That has been one of the defining characteristics of Neoliberalism’s transformation of capitalist labor markets. It has meant both Primary Exploitation in Production—via lengthening of the work day (Absolute) and intensifying work (Relative)—as well as Secondary Exploitation in Exchange relations have been rising throughout the neoliberal period.

In addition, restructuring of labor markets be creating new business models like ‘gig work’ has also increased exploitation. It has lowered capitalist cost of goods by shifting that cost to the worker who now provides, for example, the use of his auto instead of the capitalist leasing taxis; or the hotel or office building service company having cleaning workers provide their own cleaning materials; or the apartment construction company having homeowners rent out their own homes. The gig models are many but, in all cases, the constant capital (to use Marx’s term) is not provided by the capitalist.  The introduction of the gig business model has also raised exploitation, albeit not in traditional forms of primary exploitation (lengthening work day or intensifying production). It might be considered a form of secondary exploitation.

What follows is a discussion of how during the neoliberal era both Absolute and Relative methods of primary exploitation have expanded. And so have the ways in which Secondary Exploitation has raised what might be called ‘Total Exploitation’ (primary & secondary).

Neoliberalism thus represents a period of capital-labor relations characterized by super-exploitation. And that super exploitation has been growing at an increasing rate in most recent decades after 2000.

Moreover, it is about to accelerate even faster with the dissemination of Artificial Intelligence technology solutions this decade and beyond. How AI will intensify exploitation of labor will be left, however, for a subsequent essay.

How Neoliberalism Raised Absolute & Relative Exploitation Since 1979

Capitalism’s Neoliberal era has witnessed a significant intensification and expansion of total exploitation compared to the pre-Neoliberal era.³ Under Neoliberal Capitalism both the workday (Absolute Surplus Value extraction) has been extended while, at the same time, the productivity of labor has greatly increased (Relative Surplus Value extraction) in terms of both the intensity and the mass of relative surplus value extracted.

Additionally, the capitalist state has enabled the growth of Secondary Exploitation in the following forms: a growing magnitude of Wage Theft (i.e. capitalist reclaiming of wages due or after paid); proliferation of forms of Household Debt Interest imposed on working class households (i.e. interest as a claim on future wages to be earned); a reclaiming of Deferred Wages to be paid upon retirement but reduced (State legislation replacing defined benefit pension plans with 401k individual pension plans); and the Capitalist State enabling of a rising share of total Inflation due to monopolistic Corporate Price Gouging (a rentier reclamation of wages paid in exchange). These forms of secondary exploitation are a short list of the most typical in terms of the volume of wage incomes clawed back after payment.

Neoliberal Era Absolute Value Exploitation

It is an important element of capitalist ideology to argue both the workday has been reduced during 20^th century capitalism. (Ideology here is used in the Marxist sense of “a conscious and intended misrepresentation of reality and truth by various class apparatuses in the interest of that class). The reduction of the work day may have been true during the early and mid-20^th century as Capital made concessions to Labor during the Great Depression of the 1930s and during the Second World War when it needed Labor’s cooperation. Fair Labor Standards legislation was passed in 1938 that required overtime time pay and minimum wages paid, both of which levied penalties on capitalists’ efforts to extend the work day.

Legislation allowing unionization after 1936 had the same effect, as even greater penalties were imposed by union contracts on overtime work and shift work and as disincentives to capitalist efforts to extend the work day.

During World War II capitalists seeking extra hours from their workforce were able to expand production not by extending the work day but by hiring millions of women workers—especially in war goods production— in lieu of imposing a longer mandatory work day. During the initial years of the war workers did voluntarily choose to work more hours to restore lost income from the depression years. But it was their choice. And as the war years continued, voluntary overtime slowed and then mostly phased out as the war ended.

In the immediate post-war period, the work day was further reduced by unions by negotiating contracts that required annual time off for vacations, holidays, paid sick leave, and other paid leave. By the end of the 1960s a typical vacation leave for an average union worker was three weeks paid vacation after five years of work. Holidays paid were typically 10 a year. Paid sick leave typically 6-12 days per year.  For perhaps a third of the work force at the peak of unionization at the end of the 1950s, the work day was thus reduced still further by negotiated paid time off in union contracts—along with strict prohibition of mandatory overtime work (and money disincentives to Capitalists in overtime and shift work when voluntary).

In short, it is true the work day was reduced during the first two thirds of the 20^th century—by strong unions, union contract terms, and to some extent from government disincentives to extend the work day as a result of the passage of wages and hours legislation. But that trend and scenario toward a shorter work day was halted and rolled back starting in the late 1970s and the neoliberal era. The length of the Work Day has risen—not continued to decline—for full time workers under the Neoliberal Economic Regime.

Mandatory overtime—under threat of being fired—became a constant problem for workers in manufacturing. Unions began a long period of decline and decimation as a result of government and capitalist policies beginning in the 1970s, accelerating in the 1980s, and continuing thereafter. Union membership declined from a peak of 30%-35% of the workforce steadily every year to less than 10% by 2024. Major manufacturing industry unions—like auto, steel, meatpacking, trucking, communications, construction, mining in the early 1970s had 70% to 80% of their industry’s total workforce organized in unions.

But as Neoliberalism deepened under Reagan, offshoring of jobs, deindustrialization, deregulation of entire industries (transport, communications, etc.), and direct offensive by company hired anti-union law firms steadily decimated unions throughout the decade and after. As unions weakened, prohibitions in union contracts against mandatory overtime and shift work were weakened or removed. Union contracts providing penalties (i.e. time and half, double time, triple time pay) against employers extending the work day began to decline or disappear. Unions as the great bulwark against a longer work day weakened considerably from 1980 on during the Neoliberal era.

Simultaneously, after the 1980s legislative disincentives to businesses under the Fair Labor Standards Act (FLSA) extending overtime work weakened as well. Federal court decisions consistently ruled it was management’s right to order whatever mandatory overtime it wanted, subject now only to a more narrowly defined FLSA. The failure of both government and union contracts to discourage or prevent the extension of the work day worsened after the 1980s.

Eventually, millions of workers formerly eligible for overtime pay were further exempted from overtime pay penalties. By 2005 Capital had a virtual free hand to extend the workday—which it often did since it was less costly to have workers work many hours of mandatory overtime instead of hiring more workers.

But this was only the beginning of the Neoliberal trend toward expanding the work day and thereby extracting more value from Labor via Absolute exploitation.

In the 1980s involuntary part time employment also began to expand, as did temporary employment in the 1990s. Like mandatory overtime, now weakened unions were unable to withstand the Capitalist-Court offensive to expand part time and temp work.  The growth of part time and temp work coincided with the beginning in the 1980s of a massive offshoring of production work from the US and the corresponding rise of low paid service work jobs.  As formerly full-time jobs in manufacturing disappeared offshore, the gap was filled by the growth of low-paid, few benefits, service industry jobs providing fewer hours work per week. Caught in the de-industrialization of America’s economy that accelerated from the early 1980s on, workers had to seek two and sometimes three low paid service jobs in order to maintain living standards. That shift to what has been termed part time/temp ‘contingent labor jobs’ in effect meant an expansion of the work day once again for tens of millions of US workers in the US labor force.⁴ More part time work has meant actually longer work day for millions as they had to add second and third jobs to make ends meet.

By the early 21^st century as many as 50 million workers in the US worked part time, temp, and similar forms of work that required working at two or more jobs—i.e. an extension of their work day and work week.

This contingent labor trend would subsequently accelerate further after 2000 with the arrival of ‘gig’ work in the millions as well, which further extended the work day for full time Uber, Lyft and other gig transport workers. For the vast majority of Uber and Lyft drivers, their gig work is in addition to their noon-gig primary jobs. A similar development was the shift from employer provided traditional jobs to self-employed, unincorporated, independent contractor jobs that millions of workers have had to turn to. Unincorporated, self-employed, contract workers typically work a 7-day workweek and there are more than 10 million of them now in the US labor force.

If one includes commuting time as part of the work day, during the Neoliberal regime era it too has expanded the work day during the recent Neoliberal decades. For example, it is typical for workers today to commute 1 to 2 hours each way, each day, just to get to their workplace.⁵

Reduction of paid leave hours—that in former times reduced the work day on an annual basis—has been reversed since 1980 for tens of millions: paid vacation, holidays, sick leave have all been cut for millions of US workers since 1980.  This has been partly due to the decline of paid leave time in union contracts as union concession bargaining became widespread after 1980. But the trend toward less paid time off has also been exacerbated by the growth of part time, temp, and contingent service sector jobs. Part time workers don’t get paid vacations, perhaps get only 4 of 5 paid main national holidays, if any, and of course rarely receive any paid sick leave. Paid leave reduces the work day, as it did from the 1930s to 1970s. But the rollback of paid leave has reversed its former contribution to a reduction of the work day and week to a fraction of what it was.

Changing culture in America has also contributed to a rise in the work day. As the number of business professional industry workers has risen as a percent of the labor force, hours workers by professionals have risen as well.  In the tech industry, software and other engineers are expected to work long hours past 5pm, especially when a project is in full swing.

It’s not by accident that Silicon Valley, California companies like Apple provide in-house subsidized cafeteria facilities for their employees. Don’t leave the workplace to go home to eat. Stay and continue on the project with your work team into the evening. Some even have facilities where employees can take a quick nap. And free company on-site athletic or entertainment facilities. And all manner of fast food to keep awake.

It is generally understood that many creative workers, and not just those at Apple or in tech, are expected to work evenings and weekends on projects. Legal paraprofessionals for example.

And of course they are classified by their companies as ‘salaried’, so the long hours do not make them eligible for overtime pay. Since 2000 the capitalist state has allowed businesses to re-classify millions of formerly wage workers (eligible for overtime per the FLSA law), pay them salary instead and make them work longer hours.

And there is more. There are around 15 million K-12 teachers in the USA and virtually none work a normal workday. They are required to assume the tasks of counselors to students, after school tutors, assume former administrators’ duties, and spend hours after school day ends mediating with students’ parents, or learning numerous new required software programs required by administrators, and study without pay to take and pass credential programs as a condition of employment; and, of course, there’s the never-ending evening grading. Like tech professional workers, their workday has steadily expanded in recent decades as well.

Another work day expansion example is the growing practice in companies to hire college students and recent grads on unpaid internships. In such cases students work hours for no pay whatsoever.  In a growing list of industries, the practice is becoming a norm.

Not so widespread as the 100% exploitation rate of interns who work all day often with little or no pay, but nonetheless significant with regard to unpaid hours nonetheless, is the practice in the tech sector of requiring new job applicants to produce sample work identified by the company as a condition of being considered for eventual hire.

There’s also the major new cultural development in the ‘work from home’ trend that has been accelerated by the Covid19 health crisis. Millions have begun working remotely. Their hours of work are often not a typical 9 to 5 shift. Working remotely from home has meant longer hours and increasingly undefined work shifts for millions. Team members may be dispersed across time zones and even continents. Meetings therefore occur all hours of the day. Tens of millions were assigned to work remotely under Covid. Many of them will continue doing so. Their longer work days add to the total of expanded work hours for the working-class labor force in general.

The work day should not be understood as just a ‘day’ and its hours for an individual worker. If the normal and average was 8 hours for a given individual worker, and now he/she is working 9 hours, that extra hour should be multiplied by all such workers working a similar expanded work day. And their total expanded hours multiplied by the roughly 275 (23/mo x 12) actual work days in a year. In other words, a measure of a rising work day should be aggregated on an annual basis for the entire employed labor force. When that is done—aggregating hours by worker, by day, by year and adjusted for declining days off with pay—a picture of a rising average work day appears.

When considering the work day in this aggregate manner, yet another key trend adds to the extended work day. That trend is the growing number of previously retired workers re-entering the labor force and employment. The fastest growing segments of the US labor force are workers having to return to work after having retired. The 66–70-year-old segment is returning at a faster rate than all age groups younger; and the 71–75-year-old segment faster than the 66-70. Their total hours of work add to the 16- to 65-year-old major age groups of the labor force. When averaged out for both 65 and under and 66 and older, the work day is expanded yet further.

Capitalist government statistics do not include the estimation of the average work day on a social aggregate level. There is no aggregate social average estimation of the work day. The statistics on remote work hours are currently grossly underestimated. The average weekly hours data by the US Labor Department is a statistic for full time workers only, thus missing the 50+ million or so part time, temp and gig work hours.  Studies estimating the fast-growing category of gig work are limited to those working gig as their first job only, thus leaving out the many who do gig work as a second and third job. Overtime hours for contingent workers is not calculated in government stats either; only for full time. Nor is the extended hours worked by the tens of millions on salary pay estimated. In short, official statistical estimates on the length of the work day or work week are simply not reflective of the entire labor force at large.

Nevertheless, governments and media continue to report the fiction that the work day reduced in the earlier 20^th century has not changed in recent decades under the Neoliberal regime era when, in fact, on an social aggregate class basis the work day has been rising at least since the late 1970s and with it the rate of exploitation in an Absolute Surplus Value sense.

Neoliberal Era Relative Value Exploitation

Rising productivity is a key marker for growing exploitation of Labor. If real wages have not risen since the late 1970s but productivity has—and has risen at an even faster rate in recent decades—then the value reflected in business revenues and profits of the increased output from that productivity has accrued almost totally to Capital.

Simply defined, productivity occurs when the output of goods or services rises when the total hours worked remains constant; or when the output remains unchanged after a reduction of hours worked. Or when both conditions combined exist—i.e. number of workers and hours worked are reduced but total output nevertheless rises.

In the early centuries of Capitalist production, productivity rose mostly by means of reorganizing work more efficiently—usually by adding specialization and more division of labor to the production process.  For example, in an 18^th century wagon shop with six workers employed, each could do all the tasks required for making one wagon per week, for a total of six wagons output by the work force of six workers.  But by specializing tasks—i.e. one worker making wheels which he does best, another making the wagon body fastest, another the yoke for the horses, etc.—the wagon shop produces 7 wagons in the week instead of 6. The one extra wagon represents a rise in productivity of 1/6^th or roughly 16% just by reorganizing the work flow. If the workers aren’t paid any more for their now specialized, even more skilled labor, then the capitalist has increased his surplus value. Productivity means more output. But if workers’ wages do not proportionately rise that means more Surplus Value for the capitalist to use Marx’s value terms.  But since we are assuming value is equivalent to price in the long run, it means Surplus Value in the form of Profit rises while wages do not.

Marx recognized by the mid-19^th century machinery had become the most powerful means driving productivity. But Productivity is a double-edged sword.  Machinery intensifies labor and increases its input of value into the product. Imposing the ‘strictest discipline’on the worker, the worker now works more at the pace of the machine, rather than vice-versa as in the case of hand tools used by the worker in earlier centuries.

Machinery increases the volume of output of goods while it simultaneously reduces the number of workers (and thus total hours of work) needed to produce that greater volume of output of goods. Machinery thus raises productivity and raises value. But if workers do not get a share of that greater total value from productivity in the form of higher wages, then the capitalist in effect accrues for himself virtually all the relative surplus value (i.e. profits in market terms) from the increase in productivity from machinery.

In other words, the key ‘marker’ for rising productivity enabled by machinery is the associated decline of jobs and especially hours of work.  Changes other than the introduction of machinery may add to the rise in productivity—i.e. changes in the form of business organization, more intense capitalist ‘motivation’ programs targeting workers, more training of the workforce to raise skills that add to productivity, economies of scale, etc.  But it is the introduction of machinery that is primary and the biggest contributor to productivity.

Productivity data for the US economy in the Neoliberal era’s last four decades shows that is precisely what happened: Where productivity surged, jobs and hours worked were reduced while workers’ compensation (wages and benefits) stagnated or declined. This pattern was especially apparent in manufacturing sector in the last two decades, from 2000 to 2019—a development that not surprising followed the big surge in New Technology and the ‘Dot.com’ boom of 1995-2000.⁶

Technology in the neoliberal period is what has accelerated the productivity of machinery. One should think of ‘machinery’ as not just a physical device like a lathe or drill press or even robotic welding machines that are common now on auto assembly lines. Today is it technology in the form of software code that is central to the definition of ‘machine’.

Productivity in the US economy during the Neoliberal regime from 1979 to 2016 rose roughly 75%, about the same rate as during the previous 30 years starting in 1948 when records were first kept.⁷ However, over the same period from 1979 to 2016 workers’ compensation (wages and benefits) for all production and non-supervisory workers—who have comprised on average over the Neoliberal period roughly 80% of the US labor force—rose a mere 17.5%, according to the Economic Policy Institute’s (EPI) analysis of government data.⁸ Since benefits’ share of total compensation is typically around one-fourth, the estimated strictly wage part of that 17.5% was around 13%.⁹

So, wages have risen only about one-sixth of the productivity increase.  But perhaps only half of that total 13% real hourly wage increase went to the top 5% of the production & nonsupervisory worker group, according to EPI¹⁰ (Economic Policy Institute, February 2020). That means for the median wage production worker, the share of productivity gain was likely 10% or less. The median wage and below production worker consequently received a very small share in wages from productivity over the forty years since 1979. It virtually all accrued to Capital.

In Marx’s analysis, the rise in productivity—i.e. producing more with fewer hours worked by labor in production—is represented in his innovative concept he called the ‘Organic Composition of Capital’ (OCC). It is the ratio of constant capital (physical machinery, technology expanded today) to variable capital (labor input, resources consumed in production, etc.). Productivity rises when constant capital displaces the number and hours worked by labor. Productivity is thus the representative proxy for the increase in Relative Value exploitation.

According to the US Labor Department, there were 106 million production & nonsupervisory workers at year end 2019—out of the approximately 150 million total nonfarm labor force at that time. Had they entered the labor force around 1982-84, they would have experienced no real wage increase over the four decades.¹¹

In the goods producing sector of the US economy—manufacturing in particular—the reduction in employment and total hours of work has been particularly severe.  In just the two decades from 2000 to 2019 the US share of global goods production has remained stable at around 25%, but employment in manufacturing of goods has fallen from approximately 18.3 million to around 12.7 million or about 33% or one third.

If manufacturing employment since 2000 had grown apace with the growth of the general labor force, from 110 to 150 million, over the two decades, the total employment since 2000 in US manufacturing should have risen to 24 million (18.3m in 2000 + another 5.7m).  In other words, the actual manufacturing jobs at 12.7m by 2019 it might be argued declined by almost half, or 12 million, from what it should have been over that twenty-year period.

Of the 6 million jobs lost in manufacturing, at least half was due to manufacturing sector production workers displaced by machinery, most of which was enabled by technological enhancement of ‘machinery’ in the 1990s and after.¹² If output of goods did not fall in US manufacturing during the period 2000-2019, which is the case, then all the gains of productivity over the period can be assumed to have accrued to Capital.

The US share of total world manufacturing output around 2000 was approximately 25%. Twenty years later it was still 25%, but that’s 25% of an even greater total world manufacturing output. And that greater absolute output of the 25% share in the US was produced by 6 million (i.e. 1/3 fewer) US workers in manufacturing.

The reduction of approximately 6 million manufacturing jobs amounts to 12.4 billion fewer hours worked per year in the US during those decades. One third fewer workers are left to produce the same 25% output.¹³ Multiply that 12.4 billion fewer hours worked per year by 20 years, and multiply that total in turn by an estimated average hourly wage of $20/hour and one gets a massive cost saving for Capitalists in US manufacturing brought about by displacing 6 million workers with new technology enhanced machinery and other related methods of organization of work, upgraded worker skills changes, etc.

Costs are reduced in production (more workers laid off) while more units of output are also produced and sold with the smaller work force—i.e. productivity rises. Both the wage cost cutting and the additional output increase profits. And that occurs with no real wage increases and the total ‘wage bill’ reduced by as much as one-third due to the layoffs.

In addition to the market value of the output and the cost savings to Capital from producing it with 6 million fewer workers, Capitalists were able to recoup even more wage and benefit costs from the 12.7m workers that still remained employed in manufacturing between 2000 and 2019.

Introduced on a wide scale starting in the early 1980s and continuing throughout the neoliberal period, union concession bargaining intensified. Workers who still had jobs in manufacturing, (especially auto, steel, and throughout basic manufacturing) agreed in contract renewals to cut wages and benefits previously negotiated. They ‘conceded’ in other words to management demands in bargaining to give back wages in order to maintain their jobs. Job security became more important than wages during the neoliberal era (until just recently) as capitalists offshored jobs in the millions and/or laid off millions due to displacing workers with new technology. And concessions were not just agreeing to wage cuts. In the course of concession bargaining, companies also shifted costs of health insurance premiums to workers and reduced pension benefit costs, sometime even dumping their pension plans altogether. In other words, wage and benefit cutting has been deep and rampant throughout manufacturing during the post-2000 period, perhaps even more intensely than during the initial two decades of the neoliberal period, 1980-2000.

Under the Neoliberal policy regime since 1979 the dual trend of rising productivity and its virtual total capture by Capital, accompanied by falling real wages, by nominal wage cuts in bargaining, and by benefit costs cut for the 12 million workers still with jobs. And total wage and benefit reduction to zero for the 6 million workers who lost their jobs. Fewer jobs, reduced wages and benefits, greater volume of output in the US 25% share—translated into rising productivity that wasn’t shared with the labor force.

The profits that that productivity and cost reductions produced—with no corresponding increase in wage income for workers as a group–translates into an increase in labor exploitation to an unprecedented degree.

Expanding Capital’s Share of Value Via Secondary Exploitation

Absolute and Relative forms of raising exploitation occurs in the act of production. Lengthening the work day and work week without raising hourly or weekly real wages means Capital accrues to itself the value of the increased output of goods and services created by workers working longer.  The rise in productivity, the gains of which are not shared with Labor, also translates into more value produced, sold, and realized by Capital while the real wage is kept constant or falls.

But what if Capital’s total share of value has been growing over the first four decades of the neoliberal era not only by lengthening the work day and/or by productivity gains not shared with the same? What if Capital may also increase its share of total value by reclaiming (clawing back) part of part of the value created in production that was initially paid out in wages?

The forms by which Capital has done this increasingly over the course of the Neoliberal period is what Marx called Secondary Exploitation (SE). Value may be created in production, according to Marx. But a share of that total value created is paid out in wages to workers. SE represents Capital taking back by manipulating exchange relations, with the help of the Capitalist state, some of that value paid in the form of wages.

Secondary Exploitation (SE) is not a question of value being created in exchange relations. It’s about capitalists reclaiming part of what they paid initially in wages. It’s about how capitalists maximize Total Exploitation by manipulating exchange relations as well as production relations.

The lack of attention to the analysis of exchange relations in general may in part also be due to Marx’s own relatively light treatment of analysis of exchange relations in Vol. 1 of Capital.  Marx had planned several volumes of Capital but only published one, where the focus was on Capital and value in an abstract and general sense. Marx had planned in subsequent volumes to proceed from the general to the particular, i.e. from value to price and exchange. Capitalist prices—i.e. exchange relations— were left unfinished and unpublished in the form of his notes and commentaries in Vols. 2 and 3 of Capital. (Marx vol 2, 339-50; vol 3, 609-10).

Marx had thus not worked out all the details to his satisfaction on how to explain the relationships between Value and Price; that is, explain empirically beyond general theoretical statements.  Classical economists before Marx believed that market prices fluctuated according to market supply and demand and other forces, but also around a core of value determined by labor content. This core they called ‘natural price’.  Marx’s view was similar. Marx’s value is similar to classicalists’ concept of ‘core natural price’. In the sphere of exchange other forces determined market price as well, but those market forces (supply and demand) represented price that fluctuated around a value price core.¹⁴ In the long run the core and market converged.

Marx discuses Secondary Exploitation (SE) in Vol 3 of Capital as rooted in exchange when he discusses the exploitation of workers as consumers in home mortgage lending by interest bearing capitalists (aka bank capital). Credit in home lending leads to a “great swindle”, as he put it. The capitalist credit system is a means by which wages are reclaimed by bank capitalists in excess of any normal valuation of housing. As Marx said: “This is secondary exploitation which runs parallel to the primary exploitation taking place in the production process itself.”¹⁵

The key operative term here is ‘parallel’ in the course of discussing Interest, which is just a price as well—i.e. the market price for money.  Reclaiming wages by means of charging usury level interest is a form of exploitation in exchange relations.  Regardless where it first originated, value exists both in the sphere of exchange, in the money form, even if “unassisted by the process of production (…) It is the capacity of money, or of a commodity, to expand its own value independently of reproduction.”¹⁶

Thus, the potential exists, per Marx, for capitalists to create ways to reclaim value via manipulating exchange relations not just production relations. That is, by reclaiming part of value embedded in market prices (in this case wage which is the price of labor) after having previously paid workers wages in production.

Secondary Exploitation is therefore about ways capitalists ‘claw back’ wages previously paid and in doing so add further to the capitalists’ share of surplus value produced by workers in production. There are at least five major forms by which SE has been growing during the Neoliberal Era and expanding Capital’s share of total exploitation.

Forms of Secondary Exploitation in Exchange

The first is what is called Wage Theft. A second way capitalists reclaim wages is by issuing working class households Credit with which to purchase goods for which interest is paid out of future wages. A third is via generating Monopolistic Price Gouging. A fourth way is when workers pay into retirement benefit systems out of their wage incomes but never get to receive the full retirement benefits equivalent to what they paid into the systems. Monthly retirement benefits might be considered as Deferred or Social wages. Here the capitalist state via legislation and administrative rules has played a key role in enabling the reduction in and even suspension of retirement benefit Deferred wage payments. The fifth also involves the capitalist State, which raises Taxes on gross wages paid by workers to the government and then redistributes it back to capitalists in the form of direct subsidies to corporations and/or via tax cut legislation on corporations, businesses, and capitalist investors.

Marx raised the idea of SE by noting how the capitalist Credit System, through charging excess interest, clawed back a big part of wages originally paid.  Interest payments on working class debt were a claim in the present by capitalists on wages to be paid for labor power in the future.  The amount ‘reclaimed’ is not insignificant. Household debt in the USA today—which is mostly working-class debt in the form of mortgages, medical debt, student debt, credit card debt, and installment debt—as of mid-year 2021 totaled $15.4 trillion. That’s up by 50%, from $10.1 trillion as recently as 2013.¹⁷

As of 2024 that’s now more than $17 trillion. According to the business research source, Trading Economics, US working class households are among the most indebted in the world. A median family income household, for example, has a ratio of debt to income of 54% in 2024.

In his reference to interest bearing capital reclaiming future wages through interest, Marx also noted a similar swindle goes on in retail.  This suggests SE works via market prices and inflation in general, not just via the market price of money—i.e. interest rates.

Decades ago, the American Marxist, Paul Sweezy, raised the argument that monopoly pricing amounted to ‘profits by deduction’—i.e. another way of saying surplus value and profits were expanded by means of monopoly pricing by capitalists. In other words, monopoly pricing enabled capitalists to reclaim some portion of wages paid by raising prices higher than a normal market would have.  Capitalists reclaiming some part of wages paid thereby added further to their original level of surplus value/profits extracted from workers in the production process.¹⁸

But both Marx and Sweezy only saw the tip of the iceberg that would become the scope and the eventual magnitude of Secondary Exploitation during the Neoliberal period, especially by the third decade of the 21^st century.

Not only by manipulating prices do capitalists reclaim wages via the capitalist credit system or by monopoly pricing. To credit and monopoly inflation are added additional methods of Secondary Exploitation such as Wage theft and, with the aid of the Capitalist state, legislating a massive Tax Shift from capitalists to the working class.

The primary methods of wage theft employed by capitalists have been well documented by others. The methods have included capitalists not paying the required minimum wage; not paying overtime wage rates as provided in Federal and state laws; not paying workers for the actual hours they work; paying them by the day or job instead of by the hour; making workers pay their managers for a job; supervisors stealing workers’ cash tips; making illegal deductions from workers’ paychecks; deducting their pay for breaks they didn’t take or for damages to company goods; supervisors arranging pay ‘kickbacks’ for themselves from workers’ pay; firing workers and not paying them for their last day worked; failing to give proper 60 day notice of a plant closing and then not paying workers as required by law; denying workers access to guaranteed benefits like workers compensation when injured; refusing to make contributions to pension and health plans on behalf of workers and then pocketing the savings; and, not least, general payroll fraud.¹⁹

Many of these examples of Wage Theft were estimated quantitatively in this writer’s 2005 book, The War at Home: US Corporate Offensive from Reagan to George W. Bush. The totals for the failure to pay overtime wages alone amounted to $38.2 billion in 2004 plus another $22.8 billion for failing to pay legally required minimum wages.²⁰ And that’s just for one year. The total has risen thereafter every year.

Payroll fraud is another widespread form of wage theft in America. It occurs when companies fail to make required by law payments to government programs like Medicare and social security, to unemployment benefits funds, to workers compensation insurance, or to government payroll or income taxes.

A favorite method of fraud in wage theft occurs when capitalists try to avoid making such payments to provide benefits (unemployment, disability, etc.). They arbitrarily declare their workers are ‘independent contractors; that is, they’re businesses not workers. So, they don’t have to pay into government funds for unemployment, disability, and the like. These funds pay ‘wages’ when workers are laid off or disabled. There are now 10 million workers in America classified as independent unincorporated contractors, most improperly so classified. Falsely classifying workers this way has other benefits for companies besides avoiding paying wages in various forms: independent contract workers can’t form unions by law, they aren’t covered by various job safety, no discrimination, and other protective legislation, and they can be worked hours without limit at no overtime pay rate. No fewer than 82% of the 100,000 truck drivers delivering goods to and from US ports, for example, have been legally re-classified as independent contractors. In other words, government administrative rules make it easier for businesses to ‘game’ the system and avoid making wage contributions to safety net funds.

The occupations most heavily affected by the many forms of wage theft Secondary Exploitation are often the lowest paid:  non-union truck drivers, construction workers (especially undocumented immigrant day laborers) paid by the day job instead of by hour or paid in cash ‘off the books’ (or not paid at all). Restaurant workers often have their tips income paid into a company ‘pot’ after which they often fail to receive their actual tips earned. Even legal minimum wage laws administered by the state allow businesses to pay restaurant workers a sub-minimum wage of only $2.13 dollars an hour.²¹

Janitorial workers, installer independent contractors of various occupations, agricultural workers, poultry workers without unions doing ‘sweatshop’ slaughterhouse work, entry level retail sales workers, landscape and home repair workers, freelance workers of all kinds, and, in general, immigrant workers in all occupations—of which there are approximately 10 million in the USA—are the frequent targets of employer wage theft.

Another surprising and growing category of young workers whose wages are not even paid anything are young interns at tech companies, who work over summers for no pay at all. Or else are ‘hired’ by employers to work a probation period of 3-6 months, then let go, and replaced with another batch of young, often college graduates, desperately trying to find a place to start a work career and work for nothing. A variant of this is the widespread practice in the tech industry when hiring skilled workers. The company requires them, as part of the interview process, to produce work assigned by the company. The company keeps the work and doesn’t hire the worker. This has become a kind of ‘in-house’ subcontracting. Workers spend hours preparing the assignment and aren’t paid for their labor at all.

In addition to forms of wage theft, credit exploitation, and monopoly pricing as methods of wage reclamation, Secondary Exploitation also occurs with regard to what might be called deferred wage theft.

In the case of deferred wages, the capitalist State colludes with capitalists to enable them to claw back in part, or sometimes in whole, their prior contributions to workers’ pension and retirement funds. Benefit contributions are a form of deferred wages. Companies make payments into the funds, in lieu of providing an equivalent additional wage payment. Wage increases are typically reduced by the increase cost and contributions to pensions and healthcare funds by workers, especially if they’re non-union employers. So, benefit payments are just wages by another name. Pension plan contributions are wages deferred until retirement, in other words.

Capitalists ‘reclaim’ deferred wages by dumping their pension plans on the US government agency, the Pension Benefit Guarantee Corporations (PBGC). The PBGC then takes over the pension fund. The company no longer has to make contributions to it. The PBGC then pays out pension benefits to workers at only 55 cents on the dollar on average. Big abusers since 2000 include airline, steel, and other large companies. Capitalists often feign bankruptcy as the excuse to offload their funds on the PBGC. Their stock prices then rise sharply and their management gets nice bonuses.  Capitalists give the PBGC the equivalent of 55 cents which the PBGC pays out in pension benefits; capitalists in effect ‘take back’ 45 cents on the dollar.

Another more brazen way in which workers’ deferred wages in the form of pension benefits is stolen 100% is via corporate raiders—usually Private Equity firms—taking over a company just to get at the cash in its pension fund. This practice was rampant in the 1980s. They even made movies about it (Wall Street) during the decade.

It works like this: the corporate raiders (i.e. finance capitalists) borrow from banks or rich speculator-partners and buy up the company in question’s stock, take over its Board of Directors and management. They then distribute the pension fund cash reserves back to partners and shareholders from whom they originally borrowed money in order to buy up the company. Once they’ve raided the pension fund and the company’s best assets, they sell off or abandon what’s left.

Workers’ deferred wages embedded in the pension fund, to be paid out upon retirement, are lost completely in this example. Workers don’t even get the 55 cents portion of their contributions back. Their deferred wage is in effect re-distributed among the finance capitalist raiders.

Yet another form of Secondary Exploitation is associated with what might be called ‘Social Wages’ theft. Similar in ways to private pensions, capitalist retirement payments to workers also take the form of legally required payroll tax contributions into the US social security system. Those contributions might be considered ‘social wages’, another form of deferred wages. Workers pay into the social security retirement system throughout their work lives via a payroll tax of 6.2% of their gross wages on earnings up to $174,000 a year of their annual income. Companies also pay 6.2% into the social security retirement trust fund. Managers, highly skilled workers, and others who earn more than $174,000 a year stop having to pay once their wage income level hits $174000. Capitalists who earn income from stocks or sources other than salary or wage, don’t pay anything at all into the social security fund.

Secondary Exploitation occurs with regard to the social wage/retirement benefit in several ways: first, in recent years, eligibility to receive social security benefits has tightened so that many disabled workers don’t receive it at all; second, the age limit for eligibility for benefits has risen, which means workers pay into it longer and, retire later, so receive benefits over a shorter period.  All this is made possible by capitalist politicians in Congress who legislate the reductions in benefits.²² By reducing the benefits (deferred wages due) for workers upon retirement, politicians avoid having to make the higher income groups pay more—i.e. raise the $174,000 ‘cap’; or make wealthy owners of capital also pay the 6.2% on all their non-wage capital earnings.  During the Trump administration companies were also allowed to suspend their 6.2% payroll tax contribution for months even though workers had to continue paying their 6.2%.

Perhaps the most massive form of capitalist State assistance to Secondary Exploitation is the increasingly ‘inverted’ federal tax system itself.  Since the advent of Neoliberalism, the total tax burden has shifted from capitalists, their corporations, businesses, and investors to working class families.

In the post-World War II era the payroll tax has more than doubled as a share of total federal tax revenues, to around 45% by 2020. During the same period, the share of taxes paid by corporations has fallen from more than 20% to less than 10%. The federal individual income tax as a percent of total federal government revenues has remained around 40-45%. However, within that 40-45%, another shift in the burden has been occurring—from capital incomes to earned wage incomes.

If one thinks of tax revenues as the ‘price of government’ services, then the shift in taxation represents a massive social level wage reclamation by Capital—through the medium of the capitalist State-of that share of taxes deducted from their wages. The capitalist State serves as the conduit through which taxes are raised on the working class in general, and then redistributed to Capital in the form of tax cuts.

A recent most egregious example has been the Trump administration’s 2018 tax cut, almost all of which accrued to wealthy households, non-corporate businesses, and corporations in the amount of $4.5 trillion over ten years, 2018-28. The lion’s share of that tax redistribution to Capital went to US multinational corporations, whose corporate tax rate was cut from 35% to 10.5% among other measures. Corporate and non-corporate US domestic businesses’ tax rate was reduced from 35% to 21%.²³

In 2025 many of the Trump tax provisions are up for renewal and those who have been the primary beneficiaries are proposing to make them permanent. It’s been estimated by the Congressional Budget Office this will cost the US Treasury another $5 trillion over the next decade.

Not just Trump, but every president since 2001 the US capitalist State has been engaged in a massive tax cutting program mostly benefiting capital incomes. The total tax cuts have amounted to at least $17 trillion since 2001: Starting with George W. Bush’s 2001-03 tax cuts which cut taxes $3.8 trillion (80% of which accrued to Capital incomes), through Obama’s 2009 tax cuts and his extension of Bush’s cuts in 2008 for another two years and again for another 10 years in 2013 (all of which cost another $6 trillion), through Trump’s massive 2017 tax cuts that cost $4.5 trillion, and Biden’s 2021-22 tax legislation that added another $2 trillion at minimum—the US Capitalist state has reduced taxes by at least $17 trillion!

In other words, the capitalist State has functioned increasing as a ‘tax clearing house’ redistributing the price of government (taxes) by reducing the burden on corporations and investors while raising the relative share of taxation onto the US working class via the payroll tax and other individual income tax changes.

This is a de facto redistribution of wages earned—from which taxes are paid—from Labor to Capital. It’s a de facto form of Secondary Exploitation mediated through the capitalist state during the Neoliberal era by which wages are increasing reduced by raising taxation and then given back to Capital by reducing its relative tax burden.

The tax shift has been possibly the greatest factor in growing income and wealth inequality in the USA which has reached chronic and historic levels. The capitalist corporation has served as the main conduit for a massive redistribution of income between classes in the US under the Neoliberal period, now accelerating even faster.

Reduction in corporate tax rates (and expanding loopholes as well) have allowed US corporations to distribute since 2010 more than $15 trillion to their shareholders in just stock buybacks and dividend payouts. Under Trump the distributions exceeded $1.2 trillion every year, 2017-19.²⁴ In 2021 under Biden the combined distributions hit a record $1.5 trillion, with more than $900 billion in stock buybacks and another $500-$600 billion in corporate dividend payouts to shareholders. And has continued to well exceed $1-1.5 trillion every year after.

The trend toward the increasing of Secondary Exploitation has been occurring in parallel with the simultaneous rise in Primary Exploitation as well. Both the work day has lengthened as has relative exploitation as technology has driven productivity gains, accelerating profits that haven’t been shared with Labor since at least the advent of the neoliberal era in the late 1970s. The combined result of primary and secondary exploitation has been that Total Exploitation has continually risen throughout the Neoliberal era. In addition, the rise in the hours of work has reduced the number of hours available for household production and services, further squeezing workers.²⁵

These three forms of exploitation derived from Marx’s model—i.e. Absolute, Relative and Secondary are not the final story. While signs are that all three are continuing to intensify, more forces promising to drive exploitation of labor are emerging.  Capitalist business will continue to evolve new business models that shift the cost of elements of constant capital onto to workers—as evident with the gig business model. The ‘social media’ business model is another example of something similar. Social Media companies like Facebook, Google and others have in effect shifted the cost of goods in production onto the consumer. They effectively steal the data from consumer-users which they then resell in their products back to consumers. Their ‘cost of production’ is thus greatly reduced and revenues and profits thereby increased. No doubt more innovative capitalist business models will appear.

But Artificial Intelligence revolution may accelerate the rate of exploitation of Labor to an even greater degree. Forecasts by Goldman Sachs research two years ago was AI will eliminate 300 million jobs within the next decade. That means even faster acceleration of productivity and therefore capitalist profits as massive layoffs occur as AI is implemented in processes of production. AI will prove a double-edged exploitation sword as well. It will result in Secondary Exploitation of workers as consumers in exchange relations. But AI as a driver of even greater exploitation is another story for another analysis.

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¹ Marx, Capital vol. 3, p. 609. Many contemporary American-Anglo Marxists argue that exploitation of Labor only takes place only in production and during the use of ‘productive labor’ by capitalists.  But as early as the Grundrisse, Marx emphasized the dialectical relationship between production and exchange and between both forms of their respective relations. Therefore, value can be reclaimed, or ‘clawed back’, secondarily from exchange relations as well, “which runs parallel to the primary exploitation taking place in the production process itself.”

² The others being rent and interest incomes, as well as what’s called business income in the US NIPA which are really profits for non-corporate businesses.

³ For this writer’s analysis of Neoliberal economic policy, the restructuring of late Capitalism under Neoliberalism, and its function restoring American hegemony over its domestic working class, as well as over US capitalist competitors, see Jack Rasmus, The Scourge of Neoliberalism: US Economic Policy from Reagan to Trump, Clarity Press, 2020.

⁴ US multinational corporations that offshored US union manufacturing jobs directly added to the work day in yet another way: workers they employed in their offshored operations typically worked ten- and twelve-hour work days and 6 days a week. Capitalists thus raised the average work day in the US indirectly as well as directly offshore.

⁵ This trend abated somewhat in the Covid-post Covid period in certain industries like Tech and professional business jobs. However, data is still unclear whether these professionals end up working more evenings and weekends.

⁶ The Tech surge associated with Internet & networking led to over-investment and the ‘Dot.com’ bust and recession of 2001 that began in the tech sector but soon spilled over to manufacturing and then, lastly, the services sector.

⁷ https://voxeu.org/article/link-between-us-pay-and-productivity

⁸ https://www.epi.org/productivity-pay-gap/, Economic Policy Institute, August 2021.

⁹ Wages are adjusted for inflation and seasonality in the Economic Policy Institute analysis.

¹⁰ https://www.epi.org/publication/swa-wages-2019/, Figure C, Change in Real Hourly Wages by Percentiles, State of Working America Wages, Economic Policy Institute, February 2020.

¹¹ US Dept. of Labor, Bureau of Labor Statistics, Employment Situation Report, Table B-1, January 2020,

¹² It is probably accurate to assume, as Economic Policy Institute economists do, that a good part of the manufacturing jobs lost since 2000 were also lost as a consequence of free trade agreements negotiated by the US. Most trade-related job losses were due to the NAFTA (US-Mexico-Canada) trade deal, plus another group of lost jobs due to US corporations’ offshoring of jobs to China and Asia in the first decade of the 21st century.

¹³ Assuming all jobs were full time, which means on average 2080 hours worked per year. Of course, not all hours were immediately reduced by 12.4B in the first year, 2000, but undoubtedly ramped up over time.

¹⁴ In Vol. 1 Marx assumes, for reasons of exposition, that value (core price) and (market) price are equal in the long run. In the long run, therefore, wage equaled Socially Necessary Labor Time equaled Labor Power equaled Wage. All in the long run of course which is what Vol. 1 is all about.

¹⁵ Marx, Capital, Vol. 3, International Publishers, 1967p. 609.

¹⁶ Marx, Capital, Vol. 3, p. 392.

¹⁷ New York Federal Reserve Bank, ‘Household Debt & Credit Report’, Q32021, November 2021. The deb ranges from $10.67 for mortgages at an interest rate ranging from 3% to 10% at one end to nearly $1T in credit card debt averaging 16%. 54% of all US households have credit card debt averaging $5,500 per person, for which they’ll pay more than $6000 in interest. That more than 100% interest charge is Marx’s ‘great swindle’ reference. That $6,000 amounts to a claim on future wages in the form of interest payments.

¹⁸ Paul Sweezy, ‘Some Problems in the Theory of Capital Accumulation’, Monthly Review, May 1974, pp 38-55. As Sweezy recognized, industry characteristics influence the degree of exploitation; in the case of monopoly the greater the industry concentration, the capital-labor ratio the quality and productivity of the fixed capital stock, etc., the greater the magnitude and intensity of exploitation on average.

¹⁹ Kim Bobo, Wage Theft in America, The New Press, 2011.

²⁰ Jack Rasmus, The War at Home: The Corporate Offensive from Ronald Reagan to George W. Bush, Kyklos Productions, 2006, pp. 169 & 164.

²¹ 17% of minimum wage workers in the USA are currently ‘sub-minimum’ restaurant workers, especially waitpersons and women as single head of household. In America, sub-minimum (less than $7.25) wages can be paid not only to tipped restaurant workers, but to disabled workers, and teenagers. Employers simply mis-classify many workers as such in order to pay them below the federal minimum.

²² In the latest development in 2020, their proposals were to raise the minimum wage to start receiving benefits from current 67 to as high as 70 or 72.

²³ This writer has estimated that the capitalist State since 2000 has cut taxes by at least $15 trillion, at least 80% of which has accrued to corporations, investors, and wealthiest households. For the calculations see Dr. Jack Rasmus, “The Trump $4.6 Trillion Tax Cut—Who Pays?”, Counterpunch, November 13, 2017, which includes the estimated $4.6 trillion pending in Trump tax cuts starting 2018.

²⁴ For the cumulative more than $12 trillion in buybacks and dividends since 2009, see S&P Dow Jones Indices, Quarterly S&P 500 totals ($bn) chart, published in Financial Times, July 16, 2019, p. 11 and online, August 1, 2020

²⁵ Yet another way in which to envision secondary exploitation – albeit difficult to quantify given the absence of a direct market price – is unpaid household production and services labor.  In many cases, unpaid household labor may be assumed to enable the realization (sale) of value for goods produced by other direct labor in production for the market.  Child care services are but one prime example. The prevailing average price for market provided child care services might be assumed to represent the price for unpaid family provided household child care services. A methodology would then be necessary to estimate how much of that average price is ‘clawed back’ to capitalists who do not pay for child care benefits for their directly employed labor.

 

Dr. Jack Rasmus is the author of The Scourge of Neoliberalism: US Economic Policy from Reagan to Trump, Clarity Press, 2020; The Viral Economy & Its Aftermath, Lexington Books, 2023; and other books. He has also written several stage plays. He hosts the weekly radio show, Alternative Visions, out of New York on the Progressive Radio Network and teaches economics at St. Marys College in Moraga, CA. He was formerly a corporate economist/market analyst and, before that, was a local union president and organizer.  He may be contacted at: rasmus@kyklos.com. Copyright 2024, Jack Rasmus.