In the article “Why Socialism?” I described some of the reasons why we, Reclaim Oneonta, reject capitalism in favor of socialism. One of the biggest, foundational issues we have with the capitalist system is the issue of wages. As a fact, our labor is being exploited. We are working much more than necessary, and being paid much less than what our work is worth.

We aren’t talking about inflation, or minimum wage, or just complaining. We’re talking about the way capitalism is designed.

First, it’s helpful to describe how and why the system of wages works. Your work creates value, because you turn your labor into a tangible contribution to society. Whether it’s building something, operating a machine, driving a truck, or filling out expense reports, everything is labor that adds to society in one way or another. When you get paid, it represents society’s contribution back to you. Your labor puts a certain amount of value into the system, so you are entitled to have that much value given back to you.

Imagine, you work for a chair making company. Each chair that you make is sold for $150. Your boss- the CEO- bought the materials for $40, and is paying you $15/hour to make the chairs. If you can make one chair in four hours, then it costs the CEO $60 of labour and $40 of materials to make a chair, or $100 in total. Sounds right so far, right?

Well, there’s actually an issue here. If the chair is worth $150, how is it that the CEO only spends $100 on it? To answer that, we have to break down where the value comes from.

The value of the materials is a consistent $40, so the only variable in the equation is your labor. The materials plus your labor equals a $150 chair, so naturally, your labor must be worth $110. You were only paid $60.

If your contribution added $110 of value, then that means your hard work created $110. You got $60 from the company. Where did the rest of that money go, if not to you?

The CEO has to keep a few things in mind. If they pay fully for the materials and the labor, there is no money left over and the CEO doesn’t make a profit. So of course, instead of contributing by working and creating their own value, the CEO decides to take from the profit of the workers. They don’t do this directly, because it would be much easier to spot and nobody would work for someone who is so obviously taking the money others worked for. Instead, they give you a certain amount of money per hour if you agree to give them your ability to do labor within that time. You say, “$15 an hour sounds reasonable.” But in reality, it amounts to much less than you deserve.

To recap, you do $110 worth of hard work in four hours. You get to keep $60 of it, and the other $50 goes to the CEOs paycheck. Well, what hard work did the CEO do? Nothing. That’s why they take from your paycheck instead of taking their share of the value, because they don’t add to the share of value in the first place. You create value, and the CEO takes it. There’s nothing fair about this.

The CEO is underpaying you. Stealing your labor.

This gets worse when you realize you’re not the only one who works at the company, and therefore not the only one being exploited. A CEO could easily employ dozens, or hundreds of workers in a factory. When you multiply everyone’s stolen wages and add that all up, you realize that the CEO is not only being paid for doing nothing and taking your paycheck away, but they are actually making much more than anyone at the company. How much more? 10, 15, maybe 20 times more?

In 2023, on average, 290 times more. All of that being paid for by wages that other people worked to create. They are the ultimate freeloaders. We create enough value as a society to permanently end hunger, homelessness, the climate crisis, and most violence, and still have plenty of resources left over for anything else. Yet this value, the value that workers create, is being soaked up and hoarded by the rich ruling class instead.

Let’s be clear, when you work, you create value. The value was your contribution to society, and you should have the benefits of all of that value. You worked for it. You created it. By all rights, you should have it. The CEO, however, takes a chunk of the value you created by not paying you enough, and claims credit for building half of the chair, even though you built it entirely. This means that instead of getting back all of what you put into the system, you only get half of what you worked for, and the CEO, who didn’t work at all, takes the other half of your labor value. Why are we working when the main chunk of our work goes towards benefitting the rich ruling class, and not the people in our society?

This is a huge foundational problem with the capitalist system. All of us are being exploited. This is by design, and the problem only gets worse as it progresses. The wealth gap is much higher than it used to be. In 1965, CEOs were paid 21 times more than their workers on average. Still quite the number, but not nearly as drastic as today’s 290. Today, the wealth gap is so extreme that it is even bigger than it was before the French Revolution. There is a problem and it is only getting worse.

This problem has to do with the concept of private property, and it is what allows the exploitation of workers. More on that in the next article.