The Rate of Exploitation of Workers at Bombardier, 2018, One of the Largest Private Employers in Quebec and in Toronto, Ontario: Or: How Unionized Jobs are Not Decent or Good

Introduction

In two others posts I presented a list of some of the largest employers in Toronto according to level of employment (see A Short List of the Largest Employers in Toronto, Ontario, Canada)  and Quebec (see  A Short List of the Largest Employers in Quebec According to the Number of Employees). 

I have tried to calculate the rate of exploitation of workers in various companies for these two areas, including  Air Canada  (The Rate of Exploitation of Workers at Air Canada, One of the Largest Private Employers in Canada) and the Royal Bank of Canada (Banque Royale du Canada)  (The Rate of Exploitation of the Workers of the Royal Bank of Canada (RBC), One of the Largest Private Employers in Toronto and in Canada). 

Bombardier, the aircraft manufacturer, is also on both lists for Toronto and Quebec. I will calculate the rate of exploitation for this capitalist company not only for this reason. In the documentary Company Town, one worke Jennifer Akkermanr, who was going to lose her job at the General Motors (GM) plant in Oshawa when it was to close on December 18, 2019) indicated that she liked her job when working for GM but that she was going to work for Bombardier. I calculated, using fairly rough data, the rate of exploitation of GM workers in order to show that workers who claim that they enjoy their jobs at GM, in effect (even if they are unconscious of it) are claiming that they enjoy their exploitative jobs at GM. 

I thought it appropriate to calculate the rate of exploitation of Bombardier workers to see to what extent the rates of exploitation of workers at GM and at Bombardier differed, if at all. 

I used data from 2018 rather than 2019 to calculate the rate of exploitation of Bombardier workers because, in 2019, there seemed to be no calculable rate of exploitation since in 2019 there was an actual profit loss. Unless there are specific reasons for including abnormal years, it is better to calculate the rate of exploitation using more normal data. Besides, any company that operates at a constant loss by failing to exploit workers will cease to exist after a certain period of time.

Of course, if the rate of exploitation is calculated for a number of years, then losses need to be included. I have not found any books or articles that deal with how to handle such losses in calculating the rate of exploitation for such a year. It is, in any case, probably better to include such years in a multi-year calculation of the rate of exploitation in order to gain a more accurate view of the rate of exploitation in the medium- and long-term. Perhaps some readers can provide suggestions on how to do so. 

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies in Toronto and Canada if they are available in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.

Surplus value (s) or Adjusted EBIT $969 million
Variable capital (v) or Adjusted Employee benefit costs $5,432 billion

To calculate the rate of surplus value, we need to divide “Surplus value (s) or Adjusted EBIT” by “Variable capital (v) or Adjusted Employee benefit costs.” 

So, with the adjustments in place, the rate of exploitation or the rate of surplus value=s/v=969/5,432=18%. 

That means that for every hour worked that produces her/his wage, a worker at Bombardier works around an additional 11 minutes for free for Bombardier.

In an 8-hour (480 minutes) work day, the worker produces her/his wage in 6 hours 47 minutes (407 minutes) and works 1 hour 13 minutes (73 minutes) for free for Bombardier. Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario and Employers as Dictators, Part One).

In an 8.67 hour or 8-hour 40 minutes (520 minutes) work day, the worker produces her/his wage in 7 hours 38 minutes (458 minutes) and works 1 hour 19minutes (79 minutes) for free for Bombardier.

In a 9-hour (540 minutes) work day, the worker produces her/his wage in 7 hours 38 minutes (458 minutes) and works 1 hour 22 minutes (82 minutes) for free for Bombardier.

In an 10-hour (600 minutes) work day, the worker produces her/his wage in 8 hours 28 minutes (508 minutes) and works 1 hour 32 minutes (92  minutes) for free for Bombardier.

In a 10.67 -hour or 10-hour 40 minutes (640 minutes) work day, the worker produces her/his wage in 9 hours 2 minutes (542 minutes) and works 1 hour 38 minutes (98  minutes) for free for Bombardier.

In a 12-hour (720 minutes) work day, the worker produces her/his wage in 7 hours 21 minutes (610 minutes) and works 1 hour 50  minutes (110 minutes) for free for Bombardier.

Again, the rate of exploitation measures the extent to which workers work for free, producing all the surplus value and hence all the profit for employers. However, even during the time when they work to produce their own wage, they are hardly free. They are subject to the power and dictates of their employer during that time as well. 

Do you think that these facts contradict the talk by the left and unionists of “”fair contracts” (see  Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One and  Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Three: Unifor (Largest Private Union in Canada) for this rhetoric of the largest unions in Canada, the Canadian Union of Public Employees (CUPE) and  Unifor) , “fair wages” and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized? If exploitation and oppression of workers is a constant in workers’ lives, even if they are only vaguely aware of it, should this situation not be frankly acknowledged by their representatives? Do such representatives do so? Do the left? If not, why not?  Do workers deserve better than neglecting the social context within which they live and work? Should such problems be addressed head on rather than neglected? 

Even if workers were not exploited, they would still be oppressed since they are used as things (means) for purposes which they as a collectivity do not define (see The Money Circuit of Capital). Does that express something fair? Management rights clauses (implied or explicit in collective agreements give management as representative of employers–and as a minority–the power to dictate to workers what to do, when to do it, how to do it and so forth–and is not the imposition of the will of a minority over the majority a dictatorship? (See  Employers as Dictators, Part One). Is that fair? Do union reps ever explain how a collective agreement somehow expresses something fair? Is that fair?

Is the following an example of what union reps mean by a “fair contract?”

COLLECTIVE AGREEMENT (2019-2022) BETWEEN Bombardier Inc. hereinafter referred to as “the Employer” AND Unifor

ARTICLE 3 MANAGEMENT RIGHTS

3.01 No provision of the Collective Agreement shall be interpreted as limiting the Employer in any way in the exercise of its management functions. These functions are performed in a manner consistent with all the provisions of this Agreement. It is the function of the Employer to administer and manage the company and lead the workforce. Without restricting the generality of the foregoing, its rights and functions include:

a) The responsibility for the management, operation, extension and curtailment of business and operations; the authority to direct, transfer, promote, demote, discipline and discharge employees for proper cause; the right to organize and supervise the work to be performed by the employees, to direct them in the course of their work, to maintain discipline, order and efficiency, to determine the products to be manufactured and their design, the methods, processes and means of manufacturing and operating, the type and location of machines and tools to be used, to determine production standards and the type and quality of materials to be used in manufacturing. Notwithstanding the above, these rights and functions do not prevent any employee who considers himself to have been unfairly treated to lodge a grievance in accordance with the provisions stated in this Agreement

Should workers not be discussing why management has these rights? Should workers not be discussing whether an unelected management should have such rights? Should workers not be discussing how to organize to abolish this dictatorship? Should workers not be criticizing any union rep who claims that a collective agreement somehow expresses a “fair contract?” A “good contract?” A “decent job?” A “good job?” All other such platitudes? 

Comparison of the Rate of Exploitation of Bombardier Workers to the Rate of Exploitation of Other Workers

The rate of exploitation of Bombardier workers is quite low relative to other workers (see the comparison of the rate of exploitaiton of various sets of workers in The Rate of Exploitation of Workers at WestJet Airlines Ltd.). Although there are other factors or determinants in establishing whether a private-sector employer is viable or not, a relatively low rate of exploitation is certainly one possible indication of its possible bankruptcy; there is little wonder that in 2019 Bombardier faced a loss of profit. Its efforts to restructure itself as a consequence undoubtedly involved possible attempts to increase the rate of exploitation. Perhaps a comparison of the 2018 rate and the 2022 or 2023 rate of exploitation would be appropriate at some point to see if such restructuring is reflected in an increased rate of exploitation. 

In relation to the rate of exploitation of General Motors (GM) workers, Bombardier workers are exploited less since the rate of exploitation of GM workers is 40 percent. Does that mean that Bombardier workers experience substantially more freedom than GM workers? Hardly. From the point of view of the continued existence of the workers at a certain standard of living (it does not mean that the standard of living that they receive is adequate). Higher rates of exploitation mean, among other things, that the need to work for a certain relative proportion of the working day is relatively unnecessary when compared to another set of workers in order to produce the value of the workers’ consumer goods (means of consumption). 

A low rate of exploitation means that the particular employer may be threatened with bankruptcy–and hence the workers may be threatened with unemployment. From Nick Potts (2009), “Trying to Help Rescue Value for Everyone,” in pages 177-199, Critique: Journal of
Socialist Theory, Volume 37, Issue Number 2, 177-19  page 192: 

Clearly if exploitation were to drop too low a crisis of profitability would occur.

This is hardly in their own immediate or short-term interests since they, in general need to work for an employer if they are to continue to live at a certain standard of living, This is a dilemma which private-sector workers and unions face (and, indirectly, public-sector workers and their unions) since attempts to change working conditions (such as the level of intensity or the length of the working day)  and pay may well have negative effects on the rate of exploitaiton and the rate of profit, leading to bankruptcy. Workers cannot resolve such dilemmas without challenging the class power of employers–and unions cannot either, despite all the chatter of “fair contracts,” “decent wages,” “good jobs,” “decent work,” and other such cliches. 

On the other hand, a high rate of exploitation does not mean that workers’s immediate interests are somehow met. In addition to having a greater proportion of labour or work going to the employer relative to the worker, the higher rate of exploitation may imply greater unemployment for workers since the issue of how this high rate of exploitation is achieved arises. If it arises due to massive increases in investment in constant capital relative to variable capital (and thereby increased in the productivity of labour), it may well occur that workers may become unemployed as the proportion of relative investment in c crowds out investment in v. 

Nonetheless, in the short term, a higher rate of exploitation in a particular company may initially result in somewhat stable employment as the company may be able to compete more effectively against other capitalist companies. To that extent, Jennifer Akkerman’s reference to ‘loving her job’ may contain a grain of truth–short-term employment stability. 

Alternatively, if the higher rate of exploitation occurs more or less throughout the economy, the workers who produce consumer goods (such as cars and trucks, as do GM workers), may find themselves unemployed as the commodities they produce remain unsold. 

It is ironic that it may be in the workers’ short-term interests to want a high rate of exploitation in order to achieve some form of employment stability; that this may clash with their long-term interests does not change the situation. The dilemma of not being exploited at all and being unemployed, of being highly exploited with some employment stabiity and being little exploited (but still oppressed) with the threat of unemployment hanging over workers’ heads hardly makes for a “good job” or “fair contracts.” 

It is time to challenge unions that persistently present, unconsciously if not concsiously, claims that they can somehow achieve any fair settlement, whether wages or working conditions, and whether through legislation or through collective bargaining and the resulting collective agreement. Thus, should not leftists persistently criticize such views as the following (

https://www.newswire.ca/news-releases/unifor-reaches-tentative-agreement-with-bombardier-aviation-851709617.html):

TORONTOJuly 30, 2021 /CNW/ – Unifor Local 112 and 673 have reached a tentative agreement with Bombardier Aviation. “I would like to congratulate the Local 112 and 673 bargaining teams for their hard work and dedication throughout these negotiations,” said Jerry Dias, Unifor National President. “Reaching a settlement with Bombardier brings us one step closer to resolving the labour dispute at Downsview. Our union can now focus all of its efforts on reaching an agreement with De Havilland.”

The three-year agreements cover approximately 1,500 union members employed by Bombardier Aviation at the Downsview plant.

“We could not have reached a fair settlement that addresses the union’s key priorities at Bombardier without the support and solidarity of our members throughout the bargaining process and on the picket lines,” said Scott McIlmoyle, Unifor Local 112 President. [my emphasis]

Have you ever read any justification by union reps for such terms as a “fair settlement,” “fair contract,” “fair collective agreement,” ‘fair wages,” and so forth? If not, why not? 

Should not union reps be obliged to answer such questions? 

Data on Which the Calculation Is Based

The calculation of the rate of exploitation is undoubtedly imperfect, and I invite the reader to correct its gaps. Nonetheless, the lack of any attempt to determine the rate of exploitation at the city level has undoubtedly reinforced social-reformist tendencies.

In the case of Bombardier, I have had some difficulty in reconciling numbers related to interest. I will show this below. 

But first, let us look at the general calculation: 

Surplus Value (Profit)

EBIT: Earnings before interest and taxes (or: Profitability: Revenues-Costs or Expenses) 
Revenues$ 16,236
Cost of sales 13,958
Gross margin 2,278 [16,236-13,958]
SG&A (Selling, General and Administrative Expenses) 1,156
R&D (Research and Development) 217
Share of income of joint ventures and associates (66)
Other expense (income)  (58)
EBIT before Special Items (Earnings before Interest and taxes) (2) 1,029 [2,278-1156-217+66+58=1029]
Special items 28
EBIT 1001 (1029-28=1001) 

Non-adjustment of EBT by Excluding Special Items from the Calculation

Clarification of the nature of the category “Special Items” in the Annual Report is as follows: 

Special items

Special items comprise items which do not reflect our core performance or where their separate presentation will assist users in understanding our results for the period. Such items include, among others, the impact of restructuring charges and significant impairment charges and reversals.

There exists several items in this category. To go over each item and decide whether it should be excluded or included (without further information) seems an exercise for those with accounting skills–I invite them to provide a rational for including any or all of the items; I exclude the category in its entirety from the calculation. 

Consequently, so far the EBIT is 1,001. Now, particular employers treat the need to pay interest as an expense–which it is from the point of view of the particular employer. Accordingly, there is an additional category: EBT, or Earnings Before Taxes: 

EBT (Earnings before taxes)
Interest
Financing expense 712
Financing income (106) [This is actual income received and hence is in parentheses since it is not really an expense but the opposite and must be subtracted from “Financing expense”.)
Net financing expense 606 (712-106=606)
EBT (Earnings before taxes) (EBIT (1001)-Net financing expense (606)) 395

Adjustments

I will treat, theoretically, the two categories “Financing expense” and “Financing income” separately, and only then will I make the necessary adjustements. 

Financing Expense

In Marxian theory, it is necessary to question whether some expenses are expenses for both the individual employer and for the class of employers (and fractions of their class, such as those who live on interest). When they are expenses at the macro level of the class of employers and not just at the micro level of the particular employer, the expense is deducted from total revenue. On the other hand, there are expenses that are expenses for the individual employer but are not expenses when looked at from the point of view of the class of employers; in such an instance, they are paid out from the surplus value produced or obtained by workers and are to be included in income before taxes.

For example, interest is such a category. 

As I wrote in another post: 

As explained in another post, interest in many instances can be treated as part of the surplus value produced and therefore added to net income since, although from the point of view of the individual capitalist it is an expense, from the capitalist economy as a whole it is derived from the production of surplus value. 

Accordingly, it is EBIT and not EBT that should form the basis for determining the surplus value produced since interest is derived from surplus value–although it is an expense from the point of view of the particular employer. 

Financing Income 

The category “Financing Income” is income that is a result of, among other things, investment in securities. Since, as I explained in the post on the rate of exploitation of General Motors workers,

Since the idea of calculating the rate of exploitation of particular employers is to determine the extent to which the particular employer exploits its workers, income derived from the exploitation of workers other than its workers should be excluded.

Accordingly, the amount included in this category does indeed need to be subtracted from EBIT since it is surplus value arising from the exploitation of workers other than Bombardier workers. 

Temporary Adjusted Earnings Before Income Taxes 895 (1001-106)

Further adjustments of EBIT must await the calculation of variable capital, or the total cost of producing the commodity labour power, or the capacity of labour power.

Variable Capital

Presumably, the following data form part of the category “Cost of Sales.” 

EMPLOYEE BENEFIT COSTS
Wages, salaries and other employee benefits $ 4,919 
Retirement benefits 464 
Share-based expense 74
Restructuring, severance and other involuntary termination costs 46 
Total $ 5,503

To explain the nature of the category “Share-based expenses.” it is first necessary to indicate the word form of the acronyms PSU, RSU and DSU:

PSU Performance share unit
RSU Restricted share unit
DSU Deferred share unit

The annual report indicates the nature of these: 

SHARE-BASED PLANS

PSU, DSU and RSU plans
The Board of Directors of the Corporation approved a PSU and a RSU plan under which PSUs and RSUs may be granted to executives and other designated employees. The PSUs and the RSUs give recipients the right, upon vesting, to receive a certain number of the Corporation’s Class B Shares (subordinate voting). The RSUs also give certain recipients the right to receive a cash payment equal to the value of the RSUs. The Board of Directors of the Corporation has also approved a DSU plan under which DSUs may be granted to senior officers. The DSU plan is similar to the PSU plan, except that their exercise can only occur upon retirement or termination of employment. 

It seems clear that the money allocated to the category is limited to select employees–unlike some annual reports, where it was unclear whether regular workers had access to share-based programs or not (see for example The Rate of Exploitation of Workers at WestJet Airlines Ltd.). The reasoning for including some (if not all) of it as part of surplus value is that this compensation is not mainly for the coordination of the work of others but for the exploitation of others–it is pure surplus value. 

If it was unclear whether the category was limited to those who exploit other workers, I merely calculated 10 percent of the total as forming surplus value, leaving 90 percent to form part of variable capital. In the case of Bombardier, though, the total amount of 74 million seems to be earmarked exclusively for key employees who exploit other workers. 

Accordingly, it is necessary to subtract 74 from “Employee benefit costs” and add it to EBIT: 

Adjusted EBIT or Surplus Value (Profit) 969 (895+74)
Temporarily Adjusted Employee benefit costs (variable capital, v) 5,429 (5,503-74)

Further Adjustment of Variable Capital (Wages and Benefits)

There is a list of items in the category “Other expense (income).” One of the items needs to be shifted to be included in the calculation of variable capital:

“Severance and other involuntary termination costs (including changes in estimates)” 3.

Since the shift is within the general category of “Expenses,” it does not affect the calculation of surplus value and hence profit; the category “Cost of sales” would increase by 3, from 13,958 to 13,961, and the category “Other expense (income)  (58)” would decrease by 3, from (58) to 55, with the result that the EBIT would not change. 

However, it does affect the calculation of variable capital and hence the rate of surplus value or the rate of exploitation. We now have sufficient information to calculate the rate of exploitation or the rate of surplus value.

Final Calculation (Based on Adjustments) of Surplus Value, Variable Capital (Salaries or Wages and Benefits) and the Rate of Surplus Value 

The result of all of these adjustments is: 

Surplus value (s) or Adjusted EBIT $969 million
Variable capital (v) or Adjusted Employee benefit costs $5,432 billion

To calculate the rate of surplus value, we need to divide “Surplus value (s) or Adjusted EBIT” by “Variable capital (v) or Adjusted Employee benefit costs.” 

So, with the adjustments in place, the rate of exploitation or the rate of surplus value=s/v=969/5,432=18%. 

That means that for every hour worked that produces her/his wage, a worker at Bombardier works around an additional 11 minutes for free for Bombardier.

In an 8-hour (480 minutes) work day, the worker produces her/his wage in 6 hours 47 minutes (407 minutes) and works 1 hour 13 minutes (73 minutes) for free for Bombardier. Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario  and   Employers as Dictators, Part One).

In an 8.67 hour or 8-hour 40 minutes (520 minutes) work day, the worker produces her/his wage in 7 hours 38 minutes (458 minutes) and works 1 hour 19minutes (79 minutes) for free for Bombardier.

In a 9-hour (540 minutes) work day, the worker produces her/his wage in 7 hours 38 minutes (458 minutes) and works 1 hour 22 minutes (82 minutes) for free for Bombardier.

In an 10-hour (600 minutes) work day, the worker produces her/his wage in 8 hours 28 minutes (508 minutes) and works 1 hour 32 minutes (92  minutes) for free for Bombardier.

In a 10.67 -hour or 10-hour 40 minutes (640 minutes) work day, the worker produces her/his wage in 9 hours 2 minutes (542 minutes) and works 1 hour 38 minutes (98  minutes) for free for Bombardier
In a 12-hour (720 minutes) work day, the worker produces her/his wage in 7 hours 21 minutes (610 minutes) and works 1 hour 50  minutes (110 minutes) for free for Bombardier.

I have used the lengths of the working day as 8, 8.67, 9, 10, 10.67 and 12  because the length of the working day varies. According to different sources:

Working hours are 8:00am – 4:40pm

12hr shifts

The hours that I worked were from 7:00 am to 7:00 pm Friday Saturday & Sunday and possibly coming in 2 hours early on Saturday & Sunday and or possibly staying late Friday thru Sunday depending whether or not we had a customer who had to leave early or late in the evening.

8-9 hours per day.

8 to 10 hours a day

I worked eight hours a day

The 2019-2022 collective agreement between Bombardier and Unifor Local 62 states:

ARTICLE 14 WORK SCHEDULES

14.01 The Employer determines the use of the different work schedules provided in article 14.08 according to the operational needs.

14.02 Unless otherwise stipulated in this Agreement, the normal work week is forty (40) hours.

14.03 The work week for employees on the first (1st) shift (schedule 1-A and 1-B) is of forty (40) hours distributed on five (5) consecutive days of eight (8) hours from Monday to Friday

The work week for employees on the first (1st) shift (schedule 1-C and D) is of forty (40) hours distributed over four (4) consecutive days of ten (10) hours from Monday to Thursday or Tuesday to Friday

… 

14.05 The work week for employees on the third (3rd) shift (schedule 3) is of thirty-six (36) hours, distributed on four (4) consecutive nights of nine (9) hours from Monday night to Friday morning, paid as forty (40) hours.

… 

14.06 The work week for employees on the weekend day shift (schedule 4-A et 4-B) is of thirty-six (36) hours, distributed on three (3) consecutive days of twelve (12) hours, as follows: Saturday, Sunday and Friday Saturday, Sunday and Monday, paid for forty-two (42) hours.

… 

14.07 The work week for employees on the weekend night shift (schedule 5) if of thirty-two (32) hours, distributed on three (3) consecutive evenings as follows: twelve (12) hours on Saturday and Sunday, and eight (8) hours on Friday [32 hours divided by 3=10.67 hours or 10 hours 40 minutes]. The employees are paid for forty (40) hours including the night premium.

Political Considerations and Conclusion 

Again, the rate of exploitation measures the extent to which workers work for free, producing all the surplus value and hence all the profit for employers. However, even during the time when they work to produce their own wage, they are hardly free. They are subject to the power and dictates of their employer during that time as well. 

Do you think that these facts contradict the talk by the left and unionists of “fair wages,” “fair contracts” (see  Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One for the rhetoric of the largest union in Canada, the Canadian Union of Public Employees (CUPE)) and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized? If exploitation and oppression of workers is a constant in their lives, even if they are only vaguely aware of it, should this situation not be frankly acknowledged by their representatives? Do such representatives do so? If not, why not?  Do workers deserve better than neglecting the social context within which they live and work? Should such problems be addressed head on rather than neglected? 

Even if workers were not exploited, they would still be oppressed since they are used as things (means) for purposes which they as a collectivity do not define (see The Money Circuit of Capital). Does that express something fair? Management rights clauses (implied or explicit in collective agreements give management as representative of employers–and as a minority–the power to dictate to workers what to do, when to do it, how to do it and so forth–and is not the imposition of the will of a minority over the majority a dictatorship? (See  Employers as Dictators, Part One). Is that fair? Do union reps ever explain how a collective agreement somehow expresses something fair? Is that fair?

Is the following an example of what union reps mean by a “fair contract?”

COLLECTIVE AGREEMENT (2019-2022) BETWEEN Bombardier Inc. hereinafter referred to as “the Employer” AND Unifor

ARTICLE 3 MANAGEMENT RIGHTS

3.01 No provision of the Collective Agreement shall be interpreted as limiting the Employer in any way in the exercise of its management functions. These functions are performed in a manner consistent with all the provisions of this Agreement. It is the function of the Employer to administer and manage the company and lead the workforce. Without restricting the generality of the foregoing, its rights and functions include:

a) The responsibility for the management, operation, extension and curtailment of business and operations; the authority to direct, transfer, promote, demote, discipline and discharge employees for proper cause; the right to organize and supervise the work to be performed by the employees, to direct them in the course of their work, to maintain discipline, order and efficiency, to determine the products to be manufactured and their design, the methods, processes and means of manufacturing and operating, the type and location of machines and tools to be used, to determine production standards and the type and quality of materials to be used in manufacturing. Notwithstanding the above, these rights and functions do not prevent any employee who considers himself to have been unfairly treated to lodge a grievance in accordance with the provisions stated in this Agreement

Should workers not be discussing why management has these rights? Should workers not be discussing whether an unelected management should have such rights? Should workers not be discussing how to organize to abolish this dictatorship? Should workers not be criticizing any union rep who claims that a collective agreement somehow expresses a “fair contract?” A “good contract?” A “decent job?” A “good job?” All other such platitudes? 

The collective agreement fosters the illusion that the workers are paid for the whole working day. Workers may indeed receive more wages under certain circumstances, but that means that the cost of production of their capacity for working for an employer increases (perhaps due to an accelerated use of their labour power). This consideration, however, is irrelevant here since the total wages, salaries and benefits is what matters, and any increase in v due to such considerations are included in the data.

Comparison of Rates of Exploitation 

The rate of exploitation of Bombardier workers is quite low relative to other workers (see the comparison of the rate of exploitaiton of various sets of workers in The Rate of Exploitation of Workers at WestJet Airlines Ltd.). Although there are other factors or determinants in establishing whether a private-sector employer is viable or not, a relatively low rate of exploitation is certainly one possible indication of its possible bankruptcy; there is little wonder that in 2019 Bombardier faced a loss of profit. Its efforts to restructure itself as a consequence undoubtedly involved possible attempts to increase the rate of exploitation. Perhaps a comparison of the 2018 rate and the 2022 or 2023 rate of exploitation would be appropriate at some point to see if such restructuring is reflected in an increased rate of exploitation. 

In relation to the rate of exploitation of General Motors (GM) workers, Bombardier workers are exploited less since the rate of exploitation of GM workers is 40 percent. Does that mean that Bombardier workers experience substantially more freedom than GM workers? Hardly. Higher rates of exploitation mean that the need to work for a certain length of the working day is relatively unnecessary when compared to another set of workers from the point of view of the continued existence of the workers at a certain standard of living (it does not mean that the standard of living that they receive is adequate). 

A low rate of exploitation means that the particular employer may be threatened with bankruptcy–and hence the workers may be threatened with unemployment. From Nick Potts (2009), “Trying to Help Rescue Value for Everyone,” in pages 177-199, Critique: Journal of Socialist Theory, Volume 37, Issue Number 2, page 192: 

Clearly if exploitation were to drop too low a crisis of profitability would occur.

This is hardly in their own immediate or short-term interests since they, in general need to work for an employer if they are to continue to live at a certain standard of living, This is a dilemma which private-sector workers and unions face (and, indirectly, public-sector workers and their unions) since attempts to change working conditions (such as the level of intensity or the length of the working day)  and pay may well have negative effects on the rate of exploitaiton and the rate of profit, leading to bankruptcy. Workers cannot resolve such dilemmas without challenging the class power of employers–and unions cannot either, despite all the chatter of “fair contracts,” “decent wages,” “good jobs,” “decent work,” and other such cliches. 

On the other hand, a high rate of exploitation does not mean that workers’s immediate interests are somehow met. In addition to having a greater proportion of labour or work going to the employer relative to the worker, the higher rate of exploitation may imply greater unemployment for workers since the issue of how this high rate of exploitation is achieved arises. If it arises due to massive increases in investment in constant capital relative to variable capital (and thereby increased in the productivity of labour), it may well occur that workers may become unemployed as the proportion of relative investment in c crowds out investment in v. 

Nonetheless, in the short term, a higher rate of exploitation in a particular company may initially result in somewhat stable employment as the company may be able to compete more effectively against other capitalist companies. To that extent, Jennifer Akkerman’s reference to ‘loving her job’ may contain a grain of truth–short-term employment stability. 

Alternatively, if the higher rate of exploitation occurs more or less throughout the economy, the workers who produce consumer goods (such as cars and trucks, as do GM workers), may find themselves unemployed as the commodities they produce remain unsold.

From Guglielmo Carchedi and Michael Roberts, “The Long Roots of the Present Crisis: Keynesians, Austerians, and Marx’s Law,” in World in Crisis: A Global Analysis of Marx’s Law of Profitability. Edited by Carchedit and Roberts: 

The question is whether an increase in the rate of profit due to a sufficiently high rate of exploitation is a step toward recovery.

A recovery presupposes the rise in the new value generated within the context of a rising ARP [average rate of profit]. A pro-capital distribution of value within the context of a falling ARP can revive the ARP, but this does not denote a recovery. This higher profitability hides the decreasing production of value and surplus value—that is, it hides the deterioration of the economy.

A more detailed way to approach this is is by considering the two basic sectors of the economy. Sector 1 produces means of production [Bombardier primarily belongs to this sector since it produces jets] , and sector 2 produces means of consumption [GM primarly produces in this sector–although a smaller proporition of vehicle production undoubtedly serves as means of production as well]. If one or both sectors innovate, usually the OCC rises and the ARP falls. All sectors realize tendentially the same, but lower, rate of profit. The capitalists might react to the lower ARP by lowering the level of wages, that is, by increasing the rate of exploitation across the board. This upsets the initial tendential equalization of the profit rates. But this equalization presupposes full realization [full sale of the commodities produced], which is impossible if stopping or reversing the fall in the ARP is to be achieved by raising the rate of exploitation.

Suppose wages are reduced by the same percentage, Δ symbol for a change in something], both in sector 1 and in sector 2, represented by the equation –Δv1 = –Δv2 [the percentage change decrease in variable capital is the same in both sectors 1 and 2]. Then, sector 1 gains Δs1 (corresponding to the fall in wages, –Δs1 [sic–which means that the quoter quotes exactly as written despite a possible error in the original: this should be the negative percentage change in v1]) [the percentage change increase in surplus value in sector 1 . Sector 2 on the one hand gains Δs2 (corresponding to the fall in wages, –Δv2) but on the other loses –(Δs1 + Δs2), the loss due to the unsold means of consumption to the workers both of sector 1 and of sector 2 [sector 2 loses because the levels of v1 and v2 have decreased with the result that they cannot purchase means of consumption equal to their loss]. On balance, sector 2 loses –Δs1, which is sector 1’s gain. Means of consumption for a value of Δs1 are unsold. This is overproduction in sector 2.

The ARP is unchanged (what is lost by one sector is gained by the other), but the two rates of profit differ: that in sector 1 has risen by Δs1, while that in sector 2 has fallen by the same quantity. The greater the fall in wages, the greater the fall of profitability in sector 2. This spells crisis in sector 2. Sector 1’s rate of profit rises. But this is not a sign of recovery in that sector. Sector 1’s rate of profit rises not because more value and surplus value is produced in it, but because surplus value is appropriated from sector 2 within the context of a hidden fall in the ARP. Wage cuts can, at most, postpone the crisis.

(I have some doubts about the theoretical accuracy of the above quote. The assumption of equal percentage increases in s and equal percentage decreases in v seems to assume a 100 percent rate of exploitation; if, however, the rate of exploitation is, say, 400 percent, s:v=4:1, so if s is 100, v is 25. If s increases in percentage terms by 25% to 125, a decrease in percentage terms of v by 25 percent is 6.25 (25 percent of 25 is 6.25). I will leave the issue to those who are better equipped in mathematics to determine its accuracy. Perhaps others can enlighten us by providing critical commentary.)

It is ironic that it may be in the workers’ short-term interests to want a high rate of exploitation in order to achieve some form of employment stability; that this may clash with their long-term interests does not change the situation. The dilemma of not being exploited at all and being unemployed, of being highly exploited with some employment stabiity and being little exploited (but still oppressed) with the threat of unemployment hanging over workers’ heads hardly makes for a “good job” or “fair contracts.” 

Conclusion

It is time to challenge unions that persistently present, unconsciously if not concsiously, claims that they can somehow achieve any fair settlement, whether wages or working conditions, and whether through legislation or through collective bargaining and the resulting collective agreement. Thus, should not leftists persistently criticize such views as the following (

https://www.newswire.ca/news-releases/unifor-reaches-tentative-agreement-with-bombardier-aviation-851709617.html):

TORONTOJuly 30, 2021 /CNW/ – Unifor Local 112 and 673 have reached a tentative agreement with Bombardier Aviation. “I would like to congratulate the Local 112 and 673 bargaining teams for their hard work and dedication throughout these negotiations,” said Jerry Dias, Unifor National President. “Reaching a settlement with Bombardier brings us one step closer to resolving the labour dispute at Downsview. Our union can now focus all of its efforts on reaching an agreement with De Havilland.”

The three-year agreements cover approximately 1,500 union members employed by Bombardier Aviation at the Downsview plant.

“We could not have reached a fair settlement that addresses the union’s key priorities at Bombardier without the support and solidarity of our members throughout the bargaining process and on the picket lines,” said Scott McIlmoyle, Unifor Local 112 President. [my emphasis]

Have you ever read any justification by union reps for such terms as a “fair settlement,” “fair contract,” “fair collective agreement,” ‘fair wages,” and so forth? If not, why not? 

Should not union reps be obliged to answer such questions? 


The Rate of Exploitation of General Motors Workers

I thought it would be politically relevant to try to estimate the rate of exploitation of General Motors (GM) workers for 2019 (since annual reports starting in 2020 would distort the picture because of the pandemic). I say politically relevant because of the closure of the GM Oshawa plant on December 18, 2019 and the subsequent making of the document Company Town, which dealt with the coming closure, the attitude of Jerry Dias, president of Unifor (the union that represents the workers at Oshawa) and the consequences of the closing of the factory.

However, GM annual reports (like many annual reports based in the United States), provide insufficient information to calculate the rate of exploitation. For example, there are no data on wages and salaries paid out (although there are for benefits).

Nonetheless, I searched for substitutes for the data. Undoubtedly, such calculations will be even more imperfect than the rates of exploitation I calculated for various large employers in Canada. It will undoubtedly only include bare statistics, without much refinement and with few adjustments. Still, such estimates may provide a ballpark figure of the extent of exploitation.

I invite others to criticize the data used and the manner of determining the rate of exploitation–by providing more accurate data and a more accurate manner of determining the rate of exploitation.

Where possible, I provide the website addresses where I found the information if the information is not drawn from the Annual Report.

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies (if they are available) in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.

We now have sufficient information to calculate the rate of exploitation of GM workers.

Adjusted Income before income taxes: $7.383 billion=s
Total wages and benefits $18.597 billion=v

To calculate the rate of surplus value or the rate of exploitaiton (they are the same thing), we need to divide “Adjusted Income before income taxes” (s) by “Total wages and benefits” (v).

So, with the adjustments in place, the rate of exploitation or the rate of surplus value=s/v=7.383/18.5976=40%.

That means that for every hour worked that produces her/his wage, a worker at GM works around an additional 24 minutes for free for GM.

In a 7-hour (420-minute) work day , the GM worker produces her/his wage in about 300 (5 hours) and works 120 minutes (2 hours) for free for GM. Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario  and   Employers as Dictators, Part One).

In an 8-hour (480 minute-work day), a GM worker produces her/his wage in 343 minutes (5 hours 43 minutes) and works for 137 minutes (2 hours 17 minutes) free for GM.

In an 9-hour (540-minute) day, a GM worker produces her/his wage in 386 minutes (6 hours 26 minutes) and works for free for 154 minutes (2 hours 34 minutes) for GM.

In a 10-hour (600-minute) day, a GM worker produces her/his wage in 429 minutes (7 hours 9 minutes and works for free for 171 minutes (2 hours 51 minutes) for GM.

In a 11-hour (660-minute) day, a GM worker produces her/his wage in 471 minutes (7 hours 51 minutes) and works for free for 189 minutes (3 hours 9 minutes) for GM.

In a 12-hour (720-minute) day, a GM worker produces her/his wage in 514 minutes (8 hours 34 minutes) and works for free for 206 minutes (3 hours 26 minutes) for GM.

Of course, during these times that the worker works to obtain an equivalent of her/his own wage, s/he is subject to the power of management and hence is also unfree during that time (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation and   Employers as Dictators, Part One).

Many GM workers in the United States (and in Canada) belong to a union. The Annual Report states:

At December 31, 2019 approximately 48,000 (50%) of our U.S. employees were represented by unions, a majority of which were represented by the International Union, United Automobile, Aerospace and Agriculture Implement Workers of America (UAW).

Despite belonging to a union, the GM workers are exploited–but to a relatively low extent–much lower than many other union workers. The highest calculated rate of exploitation so far has been Rogers Communications’ workers, at 209 percent (see the comparative rates in the post The Rate of Exploitation of Workers at WestJet Airlines Ltd.). Why that is would be a good area for research.

Political Questions

Do you think that these facts contradict the talk by the left and unionists of “fair wages,” “fair contracts” (see  Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Three: Unifor (Largest Private Union in Canada) for the rhetoric of the largest Unifor as the largest private-sector union in Canada, and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized?

What of the following, drawn from the November 5, 2020 collective agrement between General Motors of Canada Company and Unifor Local No 199 St. Catharines, Local No. 222 Oshawa and Local No. 636 Woodstock? Page 7:

Section IV

Management

(4) The Union recognizes the right of the Company to hire, promote, transfer, demote and lay off and to suspend, discharge or otherwise discipline employees for just cause subject to the right of any employee to lodge a grievance in the manner and to the extent as herein provided.

The Union further recognizes the right of the Company to operate and manage its business in all respects, to maintain order and efficiency in its plants, and to determine the location of its plants, the products to be manufactured, the scheduling of its production and its methods, processes, and means of manufacturing. The Union further acknowledges that the Company has the right to make and alter, from time to time, rules and regulations to be observed by employees, which rules and regulations shall not be inconsistent with the provisions of this Agreement.

This power of management is not mentioned at all in the National Unifor Bargaining Report. Like most union bargaining reports, it omits all negative aspects of working for General Motors (including being exploited and oppressed):

HIGHLIGHTS
• $1.1B to $1.4B in investments
• General wage increases
• $7,250 Productivity and Quality Bonus
• Inflation Protection Bonuses
• Improved New Hire Program
• Skilled Trades Adjustment
• Benefit improvements
• Three-year term
• Lump sum payment for pre-1994 retirees

A written summary also omits the continued power of GM management to exploit and oppress workers (page 1):

JOINT MESSAGE TO ALL GENERAL MOTORS MEMBERS

SECURING A MADE IN CANADA FUTURE

If there is a lesson learned from 2020 Auto Talks, it is that the future of Canada’s auto sector is bright and on a clear forward path.

Thanks to the hard work and determination of the Unifor-GM Master Bargaining Committee, we are proud to present a new collective agreement that follows the economic pattern negotiated at both Ford and FCA. This agreement includes a 5 per cent increase to hourly wages, a 4 per cent lump sum payment in 2021, along with $11,250 in bonuses.

The deal makes major improvements to the New Hire Program, including an accelerated path to full rate, and returns key benefits like the Legal Services Plan and the afternoon (5%) and midnight (10%) shift premium.

Skilled trades workers will see their 20% wage differential restored, new apprentices hired, and the pre-apprenticeship program re-instated for future hires. The new agreement also includes significant improvements to the benefits plan, modest (but still important) pension improvements, along with health and safety gains, retirement allowances and equity gains including 10 days of paid domestic violence leave and a new Racial Justice Advocate.

Along with these contractual improvements are commitments by the company to maintain and expand work at current Unifor facilities. GM will continue V6 engine and 6-speed transmission production over the life of the contract, and forecasted beyond.

Also, in a stand-alone letter GM has committed to explore new potential product programs and investment opportunities for St. Catharines, with input from them union[my emphasis. When I formed part of a negotiating team for Operating Engineers Local 858, in Prince George, British Columbia, the management team were able to shuffle off many items on the negotiating table by referring to a “consultation process” between the union and management–in effect eliminating such items for negotiations. The verb “explore” and the noun “input” are euphemisms for the right of management to simply do what it wants, with the proviso that it “consults” the union.] 

St. Catharines is well regarded as a leader in the GM powertrain division and will receive $109 million to in-source new transmission work for the Corvette, adding jobs, and make
upgrades to the small block V8 engine program. GM will continue V6 engine and 6-speed transmission production over the life of the contract, and further commits to seek out new
programs that sustain the facility over the long term.

The Woodstock PDC will receive $500,000 in additional upgrades. Aftermarket parts work at Oshawa will also continue, maintaining hundreds of jobs.

In addition, and pending ratification, GM has committed to invest up to $1.3 billion to restart pickup truck assembly at the Oshawa Assembly Complex, with an expected two-shift operation in the first half of 2022 (and the potential for a third).

These “highlights” teach the workers nothing about the limitations of collective bargaining and  collective agreements. They are designed to hide the concentration of major decision-making power in the hands of General Motors (such as the “right of the Company to determine the location of its plants” and the lack of such power by unionized workers.

The same could be said of the Local 222 Bargaining Report, which recommended voting for the collective agreement without any explicit indications of its limitation as indicated in the management rights clause of the collective agreement. Thus, the Report indicates among other things, the following (page 3):

Commitment to settling the 2020 GM/Unifor Master Agreement and Oshawa Local Agreement
•The production allocation is for the current life cycle. Currently, there is no future product commitment but the Company has expressed that the life cycle will be a minimum of three (3) years and that is well into the new Collective Agreement 2023.

•There will be no retirement incentives offered at the Oshawa Assembly Plant during the current life cycle of the product. In the event of a permanent reduction in force, the new hires at the Oshawa Assembly Plant will be laid off. Any employees hired prior to the 2020 Collective Agreement will flow back into the Oshawa OEM Stamped Products and Service Operation based upon Seniority.

Of course, workers have to subordinate their will to the will of employers in a society dominated by a class of employers, and so no union representatives can overcome this limitation; such a limitation is a class limitation, and it is at this level that such limitations need to be addressed. However, the class level is hardly a level that excludes the particular sections of the working class. Those particular sections are included in that general level, so at the local, regional or national level, the class issue can certainly be indicated and not simply ignored–which is what union reps do often enough these days. At the least, they could explicitly indicate the limitations of the collective-bargaining process and the collective agreements that result from that process.  Better yet, they could not only include such limitations, but they could point to ways in which such limitations might be overcome through regional, national and international tactics and stragegies. Most modern union reps, however, have no intention of doing so; indeed, they are likely unaware of the need to do so.

Data on Which the Calculation Is Based

The calculation of the rate of exploitation is undoubtedly imperfect, and I invite the reader to correct its gaps. Nonetheless, the lack of any attempt to determine the rate of exploitation at the city level has undoubtedly reinforced social-reformist tendencies. (in millions of U.S. dollars)

Total net sales and revenue  137,237

Total costs and expenses 131,756

Operating income 5,481 [137,237-131,756=5481]

Adjustments of Surplus Value (Profit)

It is necessary to make some adjustments to this since the annual report also refers to the following additional categories:

Automotive interest expense 782
Interest income and other non-operating income, net  1,469
Equity income (Note 8) 1,268

Starting with the category “Automotive interest expense,” it is necessary to make an adjustment.  It is necessary to add 782 (Automotive interest expense) to “Operating income” since (as I explained in another post):

In Marxian theory, it is necessary to question whether some expenses are expenses for both the individual employer and for the class of employers (and fractions of their class, such as those who live on interest); in such a case, the expense is deducted from total revenue. On the other hand, there are expenses that are expenses for the individual employer but are not expenses when looked at from the point of view of the class of employers; in such an instance, they are paid out from the surplus value produced or obtained by workers and are to be included in income before taxes.

Accordingly:

Temporarily adjusted income before taxes 5,481+782=6,263

Moving to the next category, “Interest income and other non-operating income, net,” since the idea of calculating the rate of exploitation of particular employers is to determine the extent to which the particular employer exploits its workers, income derived from the exploitation of workers other than its workers should be excluded. I did not think this through or consider this when I calculated the rate of exploitation of some other employers (such as Air Canada); I may or may not recalculate the rate of exploitation of such employers in the future–that depends on how much time I have to dedicate to writing other posts and engaging in my own research as well as my own personal commitments to my daughter and wife.

In the particular case of General Motors, I will exclude such income from the calculation since the income is derived from workers other than the workers of GM.

The last category, “Equity income,” seems to reflect net surplus value after expenses are subtracted from revenue. Note 8 elaborates:

Note 8. Equity in Net Assets of Nonconsolidated Affiliates

Nonconsolidated affiliates are entities in which we maintain an equity ownership interest and for which we use the equity method of accounting due to our ability to exert significant influence over decisions relating to their operating and fmancial affairs. Revenue and expenses of our joint ventures are not consolidated into our financial statements; rather, our proportionate share of the earnings of each joint venture is reflected as Equity income.

Since “Equity income” reflects the “proportionate share of the earnings of each joint venture,” it constitutes the net result of GM exploiting workers in joint ventures. Accordingly, it is necessary to make an adjustment. It is necessary to add 1,268 to Income before income taxes. The final adjustment is:

Adjusted income before taxes 7,531

Wages and Salaries (v)

Although there are statistics in the annual report for employee benefits, there are no statistics in it for wages or salaries.

I failed to find any direct information of total salaries, wages and benefits on the Net. The best that I could do was to find data about the total number of employees and then try to find data on the average wage/salary as well as average benefits and multiply the sum of the average wage/salary and benefits by the total number of employees.
To improve such calculations, I invite Sam Gindin, former research director to the Canadian Auto Workers (now Unifor) or Jim Stanford, former economist for the same union, to provide more accurate data (perhaps insider data?).
In 2019, there were 164,000 employees:
Employees At December 31, 2019 we employed approximately 95,000 (58%) hourly employees and approximately 69,000(42%) salaried employees.
This is consistent with the following:
This number, as I argued above, needs to be multiplied by the average cost of a GM worker, including benefits.  According to some, the average cost to use a GM worker in 2019 was about $63 US an hour. From   https://www.spglobal.com/marketintelligence/en/news-insights/trending/Fic7Dwvvxuh14hs9rmjwJw2, dated January 15, 2020:
GM’s average hourly labor costs are estimated to be … $63 in 2019.
I assume that this includes benefits. This amount is less than the amount estimated in 2006 (or perhaps 2009–it is unclear). From
Average Hourly Compensation 2006 (US Wages and Benefits)
Last updated on: 1/21/2009 6:47:00 AM PST
“The calculations show, accurately enough, that for every hour a unionized worker puts in, one of the Big Three really does spend about $73 on compensation. So the number isn’t made up. But it is the combination of three very different categories.

The first category is simply cash payments, which is what many people imagine when they hear the word ‘compensation.’ It includes wages, overtime and vacation pay, and comes to about $40 an hour. (The numbers vary a bit by company and year. That’s why $73 is sometimes $70 or $77.)

The second category is fringe benefits, like health insurance and pensions. These benefits have real value, even if they don’t show up on a weekly paycheck. At the Big Three, the benefits amount to $15 an hour or so.

Add the two together, and you get the true hourly compensation of Detroit’s unionized work force: roughly $55 an hour. It’s a little more than twice as much as the typical American worker makes, benefits included. The more relevant comparison, though, is probably to Honda;s or Toyota’s (nonunionized) workers. They make in the neighborhood of $45 an hour, and most of the gap stems from their less generous benefits.

The third category is the cost of benefits for retirees. These are essentially fixed costs that have no relation to how many vehicles the companies make. But they are a real cost, so the companies add them into the mix — dividing those costs by the total hours of the current work force, to get a figure of $15 or so — and end up at roughly $70 an hour.”

As to be expected, the estimated $63 an hour ($US) is certainly much higher than the estimated hourly wage of American auto workers. From Automotive Industry Labour Market Analysis: Wage Report (Canadian Skills Training and Employment Coalition, Prism Economics and Analysis, and the Automotive Policy Research Centre, October 2019), page 30:
Research done by the Center for Automotive Research (CAR) found that nominal wages for U.S. workers in the auto manufacturing sector increased by just over 6% from $28.49 in 2002 to $30.20 in 2018 but real wages fell by 23.5% (as cited in Haglund, 2019).

Think tank says UAW deals increased automakers’ labor costs

New contracts between the United Auto Workers union and Detroit’s three automakers substantially increased the cost gap between Detroit and foreign automakers with U.S. factories

ByThe Associated Press
January 15, 2020, 3:40 PM

Total labor costs include wages, health care, pensions and other expenses.

Center Vice President Kristin Dziczek calculated that GM’s labor costs would rise from $63 per hour before the new contract to $71.

GM’s average hourly labor costs are estimated to be $71 in 2023, up 12.7% from $63 in 2019 and up 29.1% from $55 in 2015, Dziczek said during a Jan. 15 webcast. Ford’s hourly labor costs would be $69 in 2023, up 13.1% from $61 in 2019 and up 21.1% from $57 in 2015. Fiat Chrysler’s costs would go up to $66 in 2023, up 20% from $55 in 2019 and up 40.4% from $47 in 2015.
Given the above, $63 an hour seems to be the average cost of a GM employee whereever s/he works. There will be no adjustments for this category despite the above calculated reduction of 173.5 from “Tranformation activities” due to some of that category involving separation benefits received by workers since, presumably, the $63 an hour includes such separation benefits.

Jim Stanford’s Disagreement with the Estimate of $63 an Hour Cost of Variable Capital V)

However, Jim Stanford would dispute such an hourly cost since he disputes the hourly cost of $75 (see How Much do Autoworkers REALLY Make? Surprise: It’s NOT $75 Per Hour!  http://unifor584retirees.ca/caw_retirees/pdf/hourly_labour_costs_09.pdf). He argues that workers receive between $43 and $44 hour.
Before I delve into this issue, let me preface it with the purpose of calculating the rate of exploitation. It is supposed to determine the proportion of hours worked that produce the value of the wage received by the workers in relation to the hours worked for no compensation and thus free for the employer. The wage is a composite of the actual wage rate and benefits and cannot be limited to the given wage rate.
Generally, the rate of exploitation is a class phenomenon, and the value of labour power or variable capital (v) and surplus value as its components are also class phenomenon. As Ben Fine states, in relation to the value of labour power, pages 104-105:
… for Marx the value of labour power is the consequence of an exchange between capital and labour, confronting each other as the two major economic classes. It is not simply the wage earned on the labour-market by one individual as opposed to another. …
the value of labour power is a more complex concept than the wage rate or earnings
of the typical worker.
Some of the costs of variable capital for employers are class costs, or the costs to the class of employers and apply across the board to all employers (or at least to a section of employers in a particular industry). Workers may not individually receive them, but some workers do; which workers depends on various conditions, such as the level of unemployment, the age of the workers, their health and so on. They need to be included in the value of labour power or variable capital even if no specific set of workers receive them as a benefit since they are costs for the employer being an employer of any set of workers whatsoever.
Stanford, however, excludes several categories which is included in the above $63 an hour–a category called “All-in Active Hourly Labour Cost.” The subcategories of this category and the corresponding amounts are: 
Overtime and shift premiums $3
Cost per hour worked of paid time off $8-9
Impact on hourly cost of layoffs & downtime $1-3
Cost per hour worked of SUB $1-3
Statutory taxes $3-4
Overtime and shfit premiums
Stanford excludes this subcategory from his calculation on the basis of the following:
Occasionally companies will require their workers to stay overtime, beyond normal working hours. Overtime is worked ins response to surges in consumer demand, to make up for production problems or bottlenecks, or in some cases because employers have decided it’s cheaper to work its existing staff extra hours than to hire new workers. In every case, it is the employer’s choice when overtime is worked.
Workers required to work overtime are paid a wage premium (usually 50%) for those hours. To a large extent (depending on the specific hours involved), overtime pay is mandated by labour law (although a labour contract can require overtime to be paid in some circumstances when it is not legally required).

In addition, in the auto industry and other manufacturing settings, it is standard practice to pay a shift premium for workers who staff evening and night shifts. (In CAW-represented auto plants, there is a 5% premium paid for evening shifts, and a 10% premium for overnight shifts, to reflect the added stress on family life of those working hours.)

Is the overtime premium part of one’s “hourly wage”? Few Canadians would conceive it that way – although those working overtime certainly appreciate the extra money. And remember: overtime is
something that occurs because employers desire it. 
According to Statistics Canada, in 2007 (most recent data), auto assembly workers in Canada worked an average of about 3.5 hours of overtime per week. This increased total average wage payments (weighted across all hours worked in the year) by around $2. Shift premiums added, on average, about another dollar per hour.
This argument is unconvincing. Overtime is supposed to not constitute compensation, he implies,  because it is not voluntary. Being voluntary or involuntary has nothing directly to do with the cost of workers. How workers conceive overtime also hardly determines whether it is a cost. As for shift premiums, the same logic applies; they too are costs. Stanford never indicates what overtime payments and shift premiums objectively are.
We can, however, get some idea of what they are by referring to the value of labour power as subject to a normal working day under average conditions. Since overtime work in effect extends the working day beyond the norm, it involves abnormal consumption of the labour power of workers. As Marc Linder (2000) argues ( “Moments are the elements of profit”: overtime and the deregulation of working hours under the Fair Labor Standards Act, pages 5-6):
Marx also furnished a general framework for understanding struggles over the length of the workday or workweek. On the surface, this struggle centers on the conflict between the buyer and the seller of a commodity which generates special problems because, unlike the situation with a general run-of-the-mill commodity, the body and mind of the human seller of labor power cannot be separated from its daily use by the buyer. Since the law of exchange of commodities, however, does not recognize any special rules for this particular exchange, the capitalist buyer tries to extract the greatest possible profit from the use of the worker’s labor power for the day’s or week’s worth he has bought. The question then becomes: how long is a workday or workweek? Since the human seller lives beyond the day, he must make sure that he sells his only commodity for a price high enough to enable him to reappear at work the next day with his labor power in a condition of strength and health that meets the standards set by his competitors. But the worker as a rational labor market participant must also exercise sufficient foresight to husband his only economic asset for a lifetime—or at least the standard working life of his type of labor. If the daily value of his commodity equals its lifetime value divided by 30 years or approximately 10,000 workdays, then he must make sure that overlong workdays and workweeks do not force him to expend so much additional energy that he uses up 1/5,000 or 1/3,333
of his lifetime supply for only 1/10,000 of its lifetime value. For this reason socialist unions regarded eight-hour laws as “life lengthening” acts.The worker therefore regards such overwork as crossing the line from the capitalist’s rightful use to plundering of his labor power and, as such, a breach of their contract and of the law of the exchange of commodities. His demand for a workday or workweek of normal length—defined by its compatibility with a healthy 30-year worklife—is as rightful as the capitalist’s demand that the worker work as long as possible each day and week. Because the capitalist is not a slaveholder, he has no (capital-) invested interest in the length of the worklife of his individual employees: “A quick succession of unhealthy and short-lived generations will keep the labour market as well supplied as a series of vigorous and long-lived generations.” Thus as long as the employer can find equivalent replacements in the labor market when he needs them, this private contractual dispute cannot be resolved between individual buyer and seller. The resulting “antinomy” of right against right27 must, Marx argued, be decided by “the respective powers of the combatants.” But since “in its merely economic action capital is the stronger side,” a class-wide settlement of the hours issue was possible only through “general political action,” which meant “legislative interference” under pressure from the working class.2* Consequently, the normalization of the workday and workweek appears historically as a struggle between the “aggregate capitalist, i.e., the class of capitalists, and the aggregate worker, or the working class.”
Overtime and shift work can be conceived as compensatory costs for abnormal consumption of workers–but they are costs of hiring workers, exploiting them and oppressing them.
Cost per hour worked of paid time off 
Stanford has the following to say on the matter in order to justify excluding this subcategory:
Now here is where it starts to get more complicated. “All-in hourly labour cost,” in the auto industry, is not calculated by dividing total compensation by the number of normal working hours in a year (as we have done above: 40 hours per week
times 52 weeks in a year equals 2080 working hours in a year).
Let us pause here. What Stanford calls “normal working hours” is not the statistic that can be used to calculate the rate of exploitation since it is not the number of actual hours worked. It is the actual hours worked that produces the equivalent of the total compensation received by workers that is relevant–and not some “normal working hours” that no workers actually work.
From Anwar Shaikh and E. Ahmet Tonak (1994), From Measuring the wealth of nations: The political economy of national accounts, page 178: 

By definition, Marxian labor value added is simply the number of hours worked by productive workers
Let us continue with Stanford’s views.
Instead, all-in hourly labour costs are calculated over a much smaller base of hours. Total
compensation costs are divided by the numbers of hours actually worked in a year. Actual hours worked, the denominator of this fraction, differs from the number of standard working hours in a year (2080) for several reasons:
  • Paid time off (for vacation and holidays)
  • Sick leave (CAW autoworkers do not receive any pay during the first days of
    an illness, after which they are compensated under a sickness and accident
    insurance scheme)
  • Time not worked due to layoffs or downtimeIt is simple mathematics that the lower is the number of hours actually worked,
    the higher is the apparent “all-in hourly labour cost.”

    The CAW has placed great emphasis over the years on negotiating more paid time off, as a deliberate strategy to try to protect employment levels against the effects of technological change and productivity growth, and to provide for needed time away from the physical and mental stresses of assembly line work. However, in recent contracts the amount of paid time off has been reduced by 80 hours per year (in the face of intense cost-cutting pressure from the employers). Today a CAW production worker with maximum seniority (over 20 years) qualifies for 6 weeks of paid time off (for vacation, scheduled mandatory vacation or “SPA,” and personal leave). A new hire qualifies for 2 weeks (the legal minimum). A worker with 5 or more years seniority qualifies for 4 weeks.

    Holidays (including regular statutory holidays and a week-long Christmas shutdown) reduce working time by another 15 days per year.

    Paid time off can be considered a form of compensation. It can also be considered a basic human and labour right – one that workers have fought for over the centuries, and that is essential to the quality of life of working people and their families. Of the paid time off received by CAW autoworkers, about half is required by law. The rest reflects additional time negotiated by the union. I doubt, however, that many Canadians consider their paid time off as part of their hourly wage. They conceptualize it separately, as time. Someone who earns $15 per hour, but is allowed to take a total of five weeks off per year (3 weeks vacation, and 10 days of statutory holidays), actually earns $16.60 for each hour they work (assuming they had no other time off the job for illness or layoff). But I have never heard someone adjust their hourly pay in that manner to reflect their entitlement (legal and otherwise) to paid time off.

    According to the methodology of all-in hourly labour cost, paid time off (since it reduces the denominator over which all-in labour costs are calculated) directly increases all-in hourly labour costs. Each week of paid time off (including the two weeks of vacation required per year under Canadian law, and the roughly two weeks of statutory holidays also required by Canadian law) translates into a roughly 2% increase in hourly labour cost.

Again, his argument is unconvincing. Although undoubtedly, for example, workers who receive a minimum wage, unionized workers and other workers are unlikely to conceive of paid holidays as part of their compensation, this hardly means that the paid holidays and vacaction do not form part of their compensation. Stanford himself admits this: “Paid time off can be considered a form of compensation.” Actual hours worked and the total amount of compensation received by workers are the relevant statistics for determining variable capital costs and not imputed hours worked during holidays and vacation (when workers are not subject to the direct power of employers).
Furthermore, even some union reps in the auto industry conceived vacation pay and other fringe benefits as part of the compensation package. From Frank Lovell (May-June 1968), “The Reuther-Meany Split,” in pages 36-58, International Socialist Review, page 51:
Reuther accurately reported the new wage scales as follows:”The average production worker will receive a 20-cents-an-hour wage increase upon his return to work plus a three per cent annual wage increase in the second and third years of the contract. These wage increases, together with the impact of the ‘roll up’ factor, will amount to an average of 58 cents an hour over the three-year period of the contract.”The average skilled trades worker will receive a 50-cent-an-hour wage increase upon his return to work plus a three per cent annual wage incrase in the second and third years of the contract. These wage increases, together with the impact of the ‘roll up’ factor, will amount to an average of $1.02 an hour over the three-year period of the contract.” (“Roll up” consists of increases in wage-related fringe benefits such as holiday pay, vacation pay, shift premiums, etc.[my emphasis]

Let us look at vacation pay and holiday pay. Essentially, it means that workers receive payment without having to work for their employer during that specific time. The amount of labour performed is thereby reduced to that extent than otherwise would be the case, with a flow of money (and indirectly commodities) going to the workers. The wage is not reproduced during that time, and no surplus value is produced either since no labour is performed.
Holiday pay and vacation pay are tied to work performed because those who do not work for the particular employer simply do not receive such holiday pay and (more obviously) vacation pay– but this condition seems too often to be overlooked. The payment of holiday pay and vacation pay is tied to the need for the worker to have actually worked for the particular employer.
The payment is tied to labour having been  performed, but not from any labour performed during the holiday or vacation. Since the workers receive the money and not the employer, the money represents the equivalent of higher wages and less surplus value available for the employer.
There is no logical reason why, when calculating the rate of exploitation, vacation pay, sick leave pay and holiday pay should not be included in the calculation.
The issue is not clear cut, but some Marxian works also include vacation pay, etc. as forms of compensation. From Edward Wolff (1987), Growth, accumulation, and unproductive activity: An analysis of the postwar U.S. economy, pages 61-62: 

Mean real labor compensation seems the most direct measure of the costs of reproducing labor power. Employee compensation is the sum of wages, salaries, and tips; fringe benefits such as health insurance, pension contributions, vacation pay, and the like;
Shaikh and Tonak also consider them to form part of compensation. From page 304: 
We use employee compensation (EC) because it includes wages and salaries of employees as well as employer contributions to social security. This is the appropriate base for estimates of variable capital, since it represents the total cost of labor power to the capitalist.
They reiterate their view on page 322:
Employee compensation being the sum of supplements and wages and salaries.
Impact on hourly cost of layoffs & downtime
Stanford reasons as follows in order to exclude this subcategory from the determination of the costs of employing workers:
The Impact of Downtime and Layoffs Even more far-fetched is the notion that time away from work resulting from illness, layoff, or plant shutdown should also be reflected in your “hourly wage.” Time off due to illness or layoff is not a contractual benefit; it is clearly beyond the control of both workers and their union. Suppose that workers are laid off for 8 weeks in a year because of slow sales. This reduces annual hours worked by 320 hours. That’s a reduction of as much as 20% in hours worked (after adjusting for paid time off) – causing a corresponding increase in the apparent hourly cost of fixed annual benefits (like the pensions, health premiums, and other benefits listed above). Based on the level of benefits described earlier, this amount of downtime (not unusual given recent experience) would add $3 per hour to all-in costs. A longer six-month layoff would add over $10 to the all-in hourly cost!
This seems like a double penalty: first workers experience the income loss and insecurity of being laid off for significant amounts of time. And then they are “charged,” in the form of a higher apparent “wage,” for the fact that they didn’t work for the complete year.
Differences in the number of hours worked account for a significant portion of differences in the all-in hourly labour costs between different companies. Chrysler Canada’s all-in labour cost calculation for 2008 (which has been widely debated in the course of current restructuring discussions) was based on a very low average level of hours worked per worker that year (just 1550 hours). That was significantly lower than the number of hours worked per worker at GM and Ford that year – and far, far lower than average hours worked at Toyota and Honda plants (which until recently have been running flat out). This difference in assumed hours worked accounts for about $2 per hour in all-in labour cost differences between Chrysler and the other two North American producers in Canada. And it accounts for $4 or more per hour of the all-in hourly labour cost differences between Chrysler and the non-union Canadian facilities.
Is a worker really “more expensive” because he or she didn’t work the full year, due to downtime associated with slow sales? Not really. This is not an issue of compensation. This is an issue of capacity utilization – a variable which is clearly a responsibility of management to optimize, and is beyond the control of workers and their union.
The hours not worked do not involve exploitation, and the hours not worked do involve payment without being under the direct control of the employer due to fixed costs, such as health insurance premiums. They are like vacation pay, holiday pay and sick-leave pay.
As for the decrease in hours worked, of course, if the number of hours decreases, with fixed benefit costs, the cost per hour employed will increase for the capitalists in general. This was seen indirectly when I calculated the rate of exploitation of Magna Internaitonal workers for 2020, during the pandemic (The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part Three, Updated, 2020). As I wrote in that post:
The substantial decrease in the rate of exploitation is likely due to the treatment of workers as “fixed costs” as the pandemic forced employers to retain workers despite the relatively extra costs associated with it (partly offset by federal, provincial and municipal supports).
The substantial decrease in the rate of exploitation for Magna International workers was likely largely due to a decrease in the production of surplus value, although there was also a decrease in the costs of workers for Magna International:
2020: So, with the adjustments in place: s=1081; v=2,509. The rate of exploitation or the rate of surplus value=s/v=1081/2,509=43%.2019: So, with the adjustments in place: s=2,258; v=2,862. The rate of exploitation or the rate of surplus value=s/v=2,258/2,862=79%.

Surplus value decreased by 1,177, or 52 percent ((1081-2258)/2258×100); variable capital decreased by 353, or ((2509-2862)/2862×100)=12 percent.
The substantial decrease in the rate of exploitation for Magna International workers is likely due to the fixed costs associated with keeping them on payroll while not exploiting them (because they did not work or perform labour).
Stanford’s justification or logic for discounting the increased costs of workers per hour worked seems to be: because the relation of payments to workers and hours actually worked is independent of the workers and their unions, these increased costs should not be calculated that way, he reasons:
Time off due to illness or layoff is not a contractual benefit; it is clearly beyond the control of both workers and their union.
The rate of exploitation is hardly to be calculated on the basis of what workers and their unions are able to control. The issue is: What does it cost for the workers to produce the value of the labour power or the capacity of workers to perform work relative to the value they produce for free?
I reject Stanford’s reason for excluding this subcategory.
Cost per hour worked of SUB $1-3
Standord reasons as follows for rejecting this subcategory:
Over the years auto unions have negotiated a range of income security programs to protect against the effects of the layoffs (which are regularly incurred in the auto industry due to market swings, new model launches, and other factors inherent to the auto industry). These are called supplementary unemployment benefits (SUB), and they top up the benefits received from public unemployment insurance programs.SUB costs are incorporated into all-in labour cost by attributing them to the hours which were actually worked (by those workers who were not laid off). Are SUB benefits a form of compensation? Yes, in a form. But it is not compensation received by the workers who are still working. SUB benefits are received by the workers who are laid-off (as a partial compensation for the cost they incur as a result of the lay-off). And by far the best way to reduce labour costs, in this context, is to put autoworkers back to work: they enjoy more income and security, the company pays out less SUB costs, and the cost per hour worked of all other benefits declines by several dollars.
Because of the extensive downtime experienced in most auto plants in recent years, SUB and related programs can add $3 or more to all-in hourly labour costs in CAW facilities.
The Canadian government website reads:

Supplemental Unemployment Benefit Program

Overview

Employers can use a Supplemental Unemployment Benefit (SUB) plan to increase their employees’ weekly earnings when they are unemployed due to a temporary stoppage of work, training, illness, injury or quarantine.

It is certainly true that those who continue to be exploited directly by GM do not receive the benefits of SUB-but exploitation is hardly just an affair of temporary changes in the distribution of work such that only those workers who happen to have seniority are exploited throughout the year. Layoffs in the auto industry have occurred often enough for unions to attempt to address the issue. From Robert Albritton (2022), A Japanese Approach to Stages of Capitalist Development: What Comes Next?:
For this reason, the continuation of even the partial commodification of labour-power, requires that the labour market be supported by all sorts of protections, guarantees, and stabilizing mechanisms. The auto industry in general took the lead in this respect with “productivity deals” that ensured wage increases in line with productivity increases and with “supplementary unemployment benefits” (SUBS) that protected worker’s income during the annual lay-offs in the auto industry, and with pension plans, early retirement, medical benefits, etc.
Unions obliged GM to pay laid off GM workers (not fired GM workers) a top-up to unemployment benefits. This is a condition for GM to exploit the collective labour of the particular bargaining unit and forms part of the cost of employing GM workers. To exclude this cost from variable capital would exclude the flow of additional money (and commodities) that temporarily unemployed workers receive from GM. Since variable capital is supposed to measure the amount of labour required to produce the equivalent of labour power as a commodity available on the market, and SUB is a condition for such availability in this situation, it should be included as part of variable capital that GM pays.
One historian has interpreted SUB as resulting in a “greater share of the pie” going to workers. From David Noble (1984), Forces of Production: A Social History of Industrial Automation, page 253:
Reuther embraced wholeheartedly the tempo of technology and the gospel of growth, and sought to halt job erosion through industrial expansion which would presumably raise the level of aggregate demand for labor. At the same time, he strove to secure for workers a larger share of the expanding pie, through guaranteed wage agreements and so-called progress-sharing agreements (as with American Motors), and to ease the plight of displaced workers, through supplementary unemployment benefits, advance notification clauses, and company-financed retraining programs (as with General Motors). [my emphasis]
I also reject Stanford’s reason for excluding this subcategory; SUB forms part of the costs of production of GM workers.
Statutory taxes $3-4
Stanford notes the following:

The all-in hourly labour cost methodology also considers various employmentrelated
taxes paid by employers to governments. In Canada, these statutory
costs include four major items:

  • Employer CPP premiums (up to a maximum of about $2050 per year
  • Employer EI premiums (up to a maximum of about $1000 per year)
  • Employer Health Tax (equal to about 2% of earnings)
  • WSIB premiums (variable rates, usually about 3% of earnings)These government payments amount to around $3-4 per normal working hour in
    Canadian auto plants.
He makes the following comment to justify excluding them from the cost of workers to GM:
These tax payments, while they fund important public programs, obviously do not
constitute compensation for workers.
If by compensation is meant “not received in the current year,” then it is true. However, costs in the present for employers can be deferred revenue for workers; in the case of the Canadian Pension Plan (CPP), Canadian employers must pay the same amount paid by employees, up to a maximum of contributions per year. I fail to see why this should not be included in the cost of variable capital to GM. Furthermore, if pension benefits paid out by GM or deferred government pension benefits are excluded from the current year, when would they ever be included in the calculation of the value of labour power?
Unemployment insurance is a little more difficult to assess (in Canada, the Canadian government euphemestically calls it employment insurance). Some if not the majority of GM workers may not access unemployment insurance benefits at all during their life. It may not ever therefore be a deferred form of revenue for them. However, it should be remembered that GM workers can access unemployment insurance if they are laid off (and they also can receive SUB) and thus the same logic applies as the subcategory for SUB.
(By the way, the unemployment insurance that workers receive should also be included in the calculation of variable capital, but this would require more detailed information about the absolute amounts, the number of GM workers laid off, the average period of time laid off and other data which I doubt is readily available. Perhaps those with more skill or with better access to data could provide details.)
Furthermore, the nature of insurance in general is such that payments or costs may not result in any flow back in the form of services rendered. How many reading this post have purchased insurance of one form or another (such as car insurance or travel insurance) only not to use it? It is a cost that may never be recouped and is grounded in the nature of the capitalist society–which is subject to unemployment in various sectors at different times. Costs paid by employers associated with unemployment insurance is a charge on the class of employers for funding former workers who have had their relationship to any particular employer severed (or who severed it themselves by quitting–although here in Canada workers must prove “just cause” for quitting in order to be eligible and must not have been fired for “just cause”).
For GM workers who are never laid off, unemployment insurance is obviously not a form of compensation for any GM worker–but it is still a cost of reproducing the value of labour power as a commodity (if not the particular set of workers called GM employees). It is part of the cost for GM of being able to exploit this particular set of workers.
The Employer Health Tax, according to the Ontario government website, is:

The Employer Health Tax (EHT) is a payroll tax on remuneration (for example, salaries, wages, bonuses, taxable benefits, stock options etc.) that employers in Ontario provide to current and former employees.

The purpose of this tax is to assist in providing the government with revenue to fund health care in Ontario.

The provision of certain services by the government without workers having to pay for them constitute part of the “social wage” of workers. In this particular case, sufficiently large employers are forced to pay for part of those services (smaller capitalist firms are exempt). These costs for the employer are necessary to ensure a certain level of health services and health of workers. I fail to see why they should not be considered part of the necessary costs that Ontario employers must pay if they are to exploit Ontario employees.
An indirect argument for including the EHT in the calculation of variable capital is provided by Wolff (cited above), page 78:
One further refinement should be added. Not only private consumption but also publicly provided consumption is required to reproduce the labor force. In particular, part of the government’s expenditures on education, health, fire protection, roads, and the like
contributes directly to the welfare of workers. Thus, in order to correctly estimate the necessary consumption of workers, government expenditures on productive goods and services, Gp, must be distributed among the beneficiaries of the expenditures.
As for Workers’ Compensation premiums paid by GM, although Shaikh and Tonak (1994) do not directly address this specific category, they do generally include “employer contributions to social security” in their calculation of the value of labour power. Page 108:
for wages we use “employee compensation” (EC), which includes wages and salaries of employees as well as employer contributions to social security. Employee compensation is the appropriate measure upon which to base our estimates of variable capital, since it represents the total cost of labor power to the capitalist.
Rodrigo Finkelstein (2015) more specifically argues that workers’ compensation premiums constitute the exchange value of workers’ injuries,”The Commodity Form of Safety Information,” in pages 610-623, triple C, Volume 13, Number 2, page 622:
Through injuries, diseases and deaths, workers transfer to the premium the value they themselves lose during the labour process by the destruction of their own use-value. Workers’ use-value—i.e. labour-power—uure [sic–this term indicates that something is quoted exactly as written despite it likely being an error]-appears in the value of every commodity as the premium.
Like shift premiums and overtime, workers’ compensation premiums can be conceived as compensation for accelerated use of workers’ labour power; unlike shift premiums and overtime, the money is not appropriated directly by individual workers but is mediated through a bureuacratic appropriation and distribution process that pools the accelerated use of  workers’ labour power at the provincial level in Canada.
(These premiums should not, however, be considered the accurate costs of accelerated use of the labour power of workers. Premiums are based on claimed employer-dictated work-related diseases, injuries and deaths, but actual employer-dictated work-related diseases, injuries and deaths is much higher (see Working and Living in a Society Dominated by a Class of Employers May Be Dangerous to Your Health).
It should come as no surprise that Stanford ignores workers’ compensation as a cost. Firstly, he considers the view that what is healthy for “the economy” is somehow also healthy for workers. This correspondence may to a certain extent arise because capitalists, ultimately, must rely on human bodies if they are to exploit them, and unhealthy bodies may be detrimental to their exploitation.
On the other hand, there obviously is a counter-tendency for employers to create working conditions that are dangerous for workers in one way or another (see my critique of Stanford’s attempt to treat the capitalist economy as if it were an economy primarily based on the production of products that workers, citizens, immigrants and migrants need–rather than a capitalist economy designed to obtain as much surplus value as possible–at the expense of workers in the posts Economics for Social Democrats–but not for the Working Class, Part Three: The Health and Safety of Workers and an Economy Dominated by a Class of Employers Are at Loggerheads and Economics for Social Democrats–but not for the Working Class, Part Four: Is There Such a Thing as a Responsible Employer in Relation to the Health of Workers?).
Stanford’s analysis of the real cost of the value of labour power matches his economics for social democrats. His economics of capitalism for “everyone” (the main title of a book he wrote) is really an economics for social reformists–and is hardly expressive of the interests of the working class.
Stanford’s dismissal of workers’ compensation premiums as part of the cost of the value of labour power reflects his social-democratic views.  Workers’ compensation premiums are linked to the determination of the value of the loss of various parts of the body, for example–equating money and the loss of human body parts. As Nate Holdren (2020),in Injury Impoverished: Workplace Accidents, Capitalism, and the Law in the Progressive Era remarks, page 5:
I remarked that it felt a little creepy that my hand had a dollar value. The lawyer laughed and agreed that it was creepy. He told me that there were tables that listed the value of all the different body parts. …  I repeated that it was a creepy idea that my body parts in particular had a dollar value, and that in general there were tables written down with the value of body parts calculated in advance. The lawyer replied that a lot of people got hurt at work and that the injuries and the payments for them were all a regular process.That meeting with the lawyer is where I first encountered what I now think of as the “tyranny of the table,” but it is both more and less than  tyranny. What I mean by the tyranny of the table is that within compensation laws human lives and human suffering have the fixed monetary values ascribed – no more than that, and not subject to discussion. What doesn’t fit into the values of the table? Nearly everything. All of the elements of a human being other than our paychecks.
Behind the numbers lie real human beings, with histories linked to other human beings in various ways. Workers’ compensation itself hides this reality behind the numbers, and Stanford’s cavalier dismissal of the payment of premiums by employers as part of the cost of the value of labour power reflects his own dismissal of the real and necessary experiences of many workers working for employers–and the diseases and injuries they experience that they suffer–and the deaths (the ending of any possibility of further human experience or any possibility of further human progress).
In Stanford’s haste at being a “progressive economist,” (he is the founder of the Progressive Economic Forum), he dismisses too hastily various costs that are relevant for characterizing the experience of workers in a capitalist society (such as the premiums paid to the Workers’ Compensation Board).
Although this post is about the rate of exploitation, it should never be forgotten that this rate of exploitation is linked to real people being used as things for the benefit of employers, with real negative consequences for members of the working class. Holdren points out how workers who work for an employer are often under the threat of being injured in one way or another, and if they are, their lives are often changed forever, page 1:
Nettie Blom worked in the laundry of a hotel in Yellowstone Park. On June 30, 1900, Blom was operating a machine called a mangle, which used steam-heated and steam-powered metal rollers to iron flat linens. The wet cloth stuck to her hand for a moment too long, and she was pulled into the machine. Blom’s hand was crushed and burnt. When a co-worker managed to free her from the machine, Blom’s hand looked like “boiled meat.” Three of her co-workers fainted at the sight. Blom suffered terrible pain and lost the use of her hand due to her injuries.
Stanford’s dismissal of workers’ compensation premiums as part of the value of labour power also hides the shift from what Holdren calls the tyranny of the trial to the tyrranny of the tables. The (unlikely) possibility of workers suing and winning a case against their employer constituted part of the tyranny of the trial historically, but gradually governments shifted the issue of health and safety compensation from the courts to government bureaucracies–Worker’s Compensaiton Boards. This shift from the workers’ financial point of view had the advantage that compensation would be forthcoming for proven injuries, disease or death–but it had the major disadvantage of eliminating any exposure of the real human damage and suffering that is so often connected to workplace injuries, diseases and death–an exposure that was at least minimally possible during a trial. In its place arose what Holdren calls the “tyranny of the table,” which depersonalized human injury and suffering at work. This is an important issue that the social-democratic left simply ignore or sidestep through the use of such euphemisms as “decent work,” “decent jobs,” “fair contracts” and the like. It is appropriate here to quote Holdren here more extensively about some of the implications of what the paying of premiums has involved for silencing workers’ grievances. Pages 115-118:
MORAL THINNING AND IMPOVERISHED INJURYIn order to standardize payments and thus create predictability for employers, compensation laws removed from the law arguments about injustice and narration of the individual effects of injury. This loss of deliberation changed the ethical grammar of the law, so to speak, deepening the eclipse of recognition, further impoverishing injury. The human meaning of injury had no place in the law. I call this phenomenon moral thinning: from murder to statistics. Non-financial harms also had no place under compensation laws. Pain and loss became newly worthless as the law provided no more space for people to narrate what it meant to lose a limb or a family member in an industrial accident. Injured wage earners became conceptually disembedded from their social and interpersonal contexts.

There is an element of moral thinning involved whenever the commodification of persons begins to occur, because commodification must ignore differences and particularities, setting aside whatever is unique or nonequivalent about them. Commodification tramples on singularity. This makes no difference when singularity makes no difference: the uniqueness of my morning cup of coffee does not matter; what matters is its instrumental use in my struggle toward wakefulness. The uniqueness of human beings, however, does matter: the reduction of human beings to abstract instrumental objects should trouble us. Recognition and commodification co-exist at best uneasily.

The moral thinning of injury under the tyranny of the table is more apparent when juxtaposed to the tyranny of the trial. Despite the many limits of the court-based system of employee injury law, that system did allow some space for fragments of the experiential truths of injury, which made possible elements of justice as recognition. As historian Kimberly Welch has put it, “[s]torytelling is omnipresent in human discourse.. . . Telling stories in court is an attempt to organize, interpret, and direct the world in which one lives, and the stories told in adversarial processes signal the narrator’s interpretation of how the world ought to operate.” The contending oughts embedded in legal stories made courts into places of normative deliberation, places where the contest of stories had explicitly moral and political stakes.

Access to that site of deliberation, and the recognition that came through that access, is likely part of what working-class people wanted from the court-based system of employee injury law. As historian James Schmidt has put it, injured plaintiffs and their families “came to court with a desire to talk about the miseries that had befallen them.” That telling intersected with other actors in court to produce what Schmidt calls “judicial morality plays.” Going to court was one kind of ritual through which people processed and, in important respects, produced the meaning of what Schmidt rightly calls industrial violence. There was, then, some space for this ritual use of law under the tyranny of the trial. With compensation laws, employee injury law was deritualized, no longer made available to working-class people in the same way.

To be clear, compensation laws never said that no other framework for valuing human beings existed in society, but these laws did not allow any other such framework to touch the legal response to employee injury. In the court system multiple systems of valuation could intersect, while under compensation laws non-pecuniary valuations of people, their experiences, their relationships, and their bodies had no legal space. The point is absolutely not to celebrate the tyranny of the trial, but to use the courts’ narrative and value plurality to highlight the moral thinning of injury under the tyranny of the table. In the court-based system of injury law at least it was possible to pose the questions of whether or not an injury was a wrong, and what it meant in the lives of the persons affected. There was no more space for these questions or for the answering stories of injury and its effects under the tyranny of the table.

Workers’ compensation premiums serve in part to hide the viciousness of a society dominated by a class of employers–a viciousness hidden by such social-democratic phrases as “decent jobs,” “decent work,” “fair contracts” and other euphemisms accepted by many on the so-called left these days. After all, they imply, working for an employer is not really all that bad; such is the moral thinning of social democrats these days. This is a class cost–Stanford’s dismissal of it notwithstadning.
Returning to the issue of the cost of workers, this cost of $63, of course, is probably less since GM workers in other parts of the world (such as in Mexico) would receive substantially less. However, without access to such detailed statistics, I will assume that the $63 per hour is still the average hourly wage for GM workers; perhaps Mr. Stanford (and Mr. Gindin) could provide more detailed statistics. Such statistics would be most welcome. 
Given a wage of $63 U.S. an hour, and given an estimated 1,800 hours of actual work per employee (see page 2 of Stanford’s article), and given 164,000 employees, the result is:

Total wages and benefits: $18.5976 billion

Calculation of the Rate of Exploitation

We now have sufficient information to calculate the rate of exploitation of GM workers (in billions of U.S. dollars)

Adjusted Income before income taxes: $7.383 billion=s
Total wages and benefits $18.5976 billion=v

To calculate the rate of surplus value or the rate of exploitaiton (they are the same thing), we need to divide “Adjusted Income before income taxes” (s) by “Total wages and benefits” (v).

So, with the adjustments in place, the rate of exploitation or the rate of surplus value=s/v=7.383/18.5976=40%.

That means that for every hour worked that produces her/his wage, a worker at GM works around an additional 24 minutes for free for GM.

In a 7-hour (420-minute) work day , the GM worker produces her/his wage in about 300 (5 hours) and works 120 minutes (2 hours) for free for GM. Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario  and   Employers as Dictators, Part One).

In an 8-hour (480 minute-work day), a GM worker produces her/his wage in 343 minutes (5 hours 43 minutes) and works for 137 minutes (2 hours 17 minutes) free for GM.

In an 9-hour (540-minute) day, a GM worker produces her/his wage in 386 minutes (6 hours 26 minutes) and works for free for 154 minutes (2 hours 34 minutes) for GM.

In a 10-hour (600-minute) day, a GM worker produces her/his wage in 429 minutes (7 hours 9 minutes and works for free for 171 minutes (2 hours 51 minutes) for GM.

In a 11-hour (660-minute) day, a GM worker produces her/his wage in 471 minutes (7 hours 51 minutes) and works for free for 189 minutes (3 hours 9 minutes) for GM.

In a 12-hour (720-minute) day, a GM worker produces her/his wage in 514 minutes (8 hours 34 minutes) and works for free for 206 minutes (3 hours 26 minutes) for GM.

I calculated the division between v and s according to the following:

I have used the lengths of the working day (and the corresponding division between v and s) as 7, 8, 9, 10, 11 and 12 and because the length of the working day varies. According to one source:

8 hours is normal. Many will average 7 or 9 per day.

8 hours per, except for the new models introduction period.The working hours varies depending upon the targeted productions orders.

Salaried, so come in between 6 and 9, leave within 8 or 10 hours.

Typical from 7:00am to 6:00 pm M-F with weekend work typical.
One week work over 70 hours

The hours where long 10-12 sometimes

I organized the division of the working day into v and s from the shortest working day to the longest.

Of course, during these times that the worker works to obtain an equivalent of her/his own wage, s/he is subject to the power of management and hence is also unfree during that time (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation and   Employers as Dictators, Part One).

Many GM workers in the United States (and in Canada) belong to a union. The Annual Report states:

At December 31, 2019 approximately 48,000 (50%) of our U.S. employees were represented by unions, a majority of which were represented by the International Union, United Automobile, Aerospace and Agriculture Implement Workers of America (UAW).

Despite belonging to a union, the GM workers are exploited–but to a relatively low extent–much lower than many other union workers. The highest calculated rate of exploitation so far has been Rogers Communications’ workers, at 209 percent (see the comparative rates in the post The Rate of Exploitation of Workers at WestJet Airlines Ltd.). Why that is would be a good area for research.

Political Questions

Do you think that these facts contradict the talk by the left and unionists of “fair wages,” “fair contracts” (see  Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Three: Unifor (Largest Private Union in Canada) for the rhetoric of the largest Unifor as the largest private-sector union in Canada, and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized?

What of the following, drawn from the November 5, 2020 collective agrement between General Motors of Canada Company and Unifor Local No 199 St. Catharines, Local No. 222 Oshawa and Local No. 636 Woodstock? Page 7:

Section IV

Management

(4) The Union recognizes the right of the Company to hire, promote, transfer, demote and lay off and to suspend, discharge or otherwise discipline employees for just cause subject to the right of any employee to lodge a grievance in the manner and to the extent as herein provided.

The Union further recognizes the right of the Company to operate and manage its business in all respects, to maintain order and efficiency in its plants, and to determine the location of its plants, the products to be manufactured, the scheduling of its production and its methods, processes, and means of manufacturing. The Union further acknowledges that the Company has the right to make and alter, from time to time, rules and regulations to be observed by employees, which rules and regulations shall not be inconsistent with the provisions of this Agreement.

This power of management is not mentioned at all in the National Unifor Bargaining Report. Like most union bargaining reports, it omits all negative aspects of working for General Motors (including being exploited and oppressed):

HIGHLIGHTS
• $1.1B to $1.4B in investments
• General wage increases
• $7,250 Productivity and Quality Bonus
• Inflation Protection Bonuses
• Improved New Hire Program
• Skilled Trades Adjustment
• Benefit improvements
• Three-year term
• Lump sum payment for pre-1994 retirees

A written summary also omits the continued power of GM management to exploit and oppress workers (page 1):

JOINT MESSAGE TO ALL GENERAL MOTORS MEMBERS

SECURING A MADE IN CANADA FUTURE

If there is a lesson learned from 2020 Auto Talks, it is that the future of Canada’s auto sector is bright and on a clear forward path.

Thanks to the hard work and determination of the Unifor-GM Master Bargaining Committee, we are proud to present a new collective agreement that follows the economic pattern negotiated at both Ford and FCA. This agreement includes a 5 per cent increase to hourly wages, a 4 per cent lump sum payment in 2021, along with $11,250 in bonuses.

The deal makes major improvements to the New Hire Program, including an accelerated path to full rate, and returns key benefits like the Legal Services Plan and the afternoon (5%) and midnight (10%) shift premium.

Skilled trades workers will see their 20% wage differential restored, new apprentices hired, and the pre-apprenticeship program re-instated for future hires. The new agreement also includes significant improvements to the benefits plan, modest (but still important) pension improvements, along with health and safety gains, retirement allowances and equity gains including 10 days of paid domestic violence leave and a new Racial Justice Advocate.

Along with these contractual improvements are commitments by the company to maintain and expand work at current Unifor facilities. GM will continue V6 engine and 6-speed transmission production over the life of the contract, and forecasted beyond.

Also, in a stand-alone letter GM has committed to explore new potential product programs and investment opportunities for St. Catharines, with input from them union[my emphasis. When I formed part of a negotiating team for Operating Engineers Local 858, in Prince George, British Columbia, the management team were able to shuffle off many items on the negotiating table by referring to a “consultation process” between the union and management–in effect eliminating such items for negotiations. The verb “explore” and the noun “input” are euphemisms for the right of management to simply do what it wants, with the proviso that it “consult” the union.] 

St. Catharines is well regarded as a leader in the GM powertrain division and will receive $109 million to in-source new transmission work for the Corvette, adding jobs, and make
upgrades to the small block V8 engine program. GM will continue V6 engine and 6-speed transmission production over the life of the contract, and further commits to seek out new
programs that sustain the facility over the long term.

The Woodstock PDC will receive $500,000 in additional upgrades. Aftermarket parts work at Oshawa will also continue, maintaining hundreds of jobs.

In addition, and pending ratification, GM has committed to invest up to $1.3 billion to restart pickup truck assembly at the Oshawa Assembly Complex, with an expected two-shift operation in the first half of 2022 (and the potential for a third).

These “highlights” teach the workers nothing about the limitations of collective bargaining and  collective agreements. They are designed to hide the concentration of major decision-making power in the hands of General Motors (such as the “and the lack of such power (such as the “right of the Company to determine the location of its plants.”

The same could be said of the Local 222 Bargaining Report, which recommended voting for the collective agreement without any explicit indications of its limitation as indicated in the management rights clause of the collective agreement. Thus, the Report indicates among other things, the following (page 3):

Commitment to settling the 2020 GM/Unifor Master Agreement and Oshawa Local Agreement

•The production allocation is for the current life cycle. Currently, there is no future product commitment but the Company has expressed that the life cycle will be a minimum of three (3) years and that is well into the new Collective Agreement 2023.

•There will be no retirement incentives offered at the Oshawa Assembly Plant during the current life cycle of the product. In the event of a permanent reduction in force, the new hires at the Oshawa Assembly Plant will be laid off. Any employees hired prior to the 2020 Collective Agreement will flow back into the Oshawa OEM Stamped Products and Service Operation based upon Seniority.

Of course, workers have to subordinate their will to the will of employers in a society dominated by a class of employers, and so no union representatives can overcome this limitation; such a limitation is a class limitation, and it is at this level that such limitations need to be addressed. However, the class level is hardly some level that excludes the particular sections of the working class. Those particular sections are included in that general level, so at the local, regional or national level, the class issue can certainly be indicated and not simply ignored–which is what union reps do often enough these days. At the least, they could explicitly indicate the limitations of the collective-bargaining process and the collective agreements that result from that process.  Better yet, they could not only include such limitations, but they could point to ways in which such limitations might be overcome through regional, national and international tactics and stragegies. Most modern union reps, however, have no intention of doing so; indeed, they are likely unaware of the need to do so.

What do you think? Are union reps looking after the needs of the working class? If not, what can be done about it?

The Rate of Exploitation of Workers at Metro, One of the Largest Private Employers in Quebec, or: How Unionized Jobs Are Not Decent or Good Jobs

Introduction

In three others posts I presented a list of some of the largest employers in Toronto according to level of employment (see A Short List of the Largest Employers in Toronto, Ontario, Canada), Calgary  (see  A Short List of the Largest Employers Based in Calgary, Alberta, Canada, Based on the Number of Employees)  and Quebec (see  A Short List of the Largest Employers in Quebec According to the Number of Employees). Metro was the largest employer in terms of the number of employees in Quebec. 

What is Metro? 

The nature of Metro is set out in its Annual Report: 

COMPANY PROFILE

METRO INC. is a food and pharmacy leader in Québec and Ontario. As a retailer, franchisor, distributor, and manufacturer, the company operates or services a network of 950 food stores under several banners including Metro, Metro Plus, Super C, Food Basics, Adonis and Première Moisson, as well as 650 drugstores primarily under the Jean Coutu, Brunet, Metro Pharmacy and Food Basics Pharmacy banners, providing employment directly or indirectly to almost 90,000 people.

I have tried to calculate the rate of exploitation of workers in various companies, including  Magna International (see The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One); Magna International is one of the largest employers in Toronto. 

In this post, I calculate the rate of exploitation of Metro workers. 

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies (if they are available) in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.

Adjusted Results

Adjusted earnings before income taxes (surplus value, or s) $1110.62 (in millions of Canadian dollars–in all calculations unless otherwise indicated)
Wages, fringe benefits and employee benefits expense: $966.4 

The Rate of Exploitation of Metro Workers

To calculate the rate of surplus value, we need to relate “Adjusted earnings before income taxes” to “Wages, fringe benefits and employee benefits expense” So, with the adjustments in place:, s=1110.62; v=966.4. The rate of exploitation or the rate of surplus value=s/v=1110.62/966.4=115 percent.

That means that for every hour worked that produces her/his wage, a worker at Metro works around an additional 69 minutes (1 hour 9 minutes) for free for Metro. Alternatively expressed, for every hour worked that produces her/his wae, a worker at Metro works 28 minutes that produces her/his wage and 32 mintues for free for Metro. 

I calculate the division of the working day according to various lengths of the working day.  I use minutes rather and not just hours.

  1. For a 4 hour working day (240 minutes), Metro workers spend 112 minutes (1 hour 52 minutes) to obtain their wage for the day, and they spend 128 minutes (2 hours 8 minutes) in obtaining a surplus value or profit for Metro. 
  2. For a 5 hour working day (300 minutes), Metro workers spend 140 minutes (2 hours 20  minutes) to obtain their wage for the day, and they spend 160 minutes (2 hours 40 minutes) in obtaining a surplus value or profit for Metro. 
  3. For a 7 hour working day (420 minutes), Metro workers spend 195 minutes (3 hours 15 minutes) to obtain their wage for the day, and they spend 225 minutes (3 hours 45  minutes) in obtaining a surplus value or profit for Metro. 
  4. For an 8 hour working day (480 minutes), Metro workers spend 223 minutes (3 hours 43  minutes) to obtain their wage for the day, and they spend 237 minutes (3 hours 57 minutes) in obtaining a surplus value or profit for Metro. 
  5. For a 9 hour working day (540 minutes), Metro workers spend 251 minutes (4 hours 11 minutes) to obtain their wage for the day, and they spend 289 minutes (4 hours 49 minutes) in obtaining a surplus value or profit for Metro. 

Of course, during the time that the worker works to obtain an equivalent of her/his own wage, s/he is subject to the power of management and hence is also unfree during that time (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation and   Employers as Dictators, Part One).

Most Metro workers belong to a union. This is what the annual report has to say about labour relations: 

LABOUR RELATIONS

The majority of our store and distribution centre employees are unionized. Collective bargaining may give rise to work stoppages or slowdowns that could impact negatively the Corporation. We negotiate agreements with different maturity dates and conditions that ensure our competitiveness, and terms that promote a positive work environment in all our business segments. We have experienced some minor labour conflicts over the last few years but expect(3) to maintain good labour relations in the future.

Do you think that these facts contradict the talk by the left and unionists of “fair wages,” “fair contracts” (see  Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One for the rhetoric of the largest union in Canada, the Canadian Union of Public Employees (CUPE)) and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized?

If exploitation and oppression of workers is a constant in their lives, even if they are only vaguely aware of it, should this situation not be frankly acknowledged by their representatives? Do such representatives do so? If not, why not?  Do workers deserve better than neglecting the social context within which they live and work? Should such problems be addressed head on rather than neglected? 

Even if workers were not exploited, they would still be oppressed since they are used as things (means) for purposes which they as a collectivity do not define (see The Money Circuit of Capital). Does that express something fair? Management rights clauses (implied or explicit in collective agreements give management as representative of employers–and as a minority–the power to dictate to workers what to do, when to do it, how to do it and so forth–and is not the imposition of the will of a minority over the majority a dictatorship? (See  Employers as Dictators, Part One). Is that fair? Do union reps ever explain how a collective agreement somehow expresses something fair? Is that fair?

Is the following an example of what union reps mean by a “fair contract?”

Between METRO ONTARIO INC. C.O.B. AS METRO RIDEAU
and
UNIFOR AND ITS LOCAL 414 UNIFOR Union Canada
Effective from: February 18, 2017 to February 17, 2020

ARTICLE 6: MANAGEMENT RIGHTS

6.01 The union acknowledges the right of the company to manage and operate its business in all respects, to direct the working force and to establish and maintain reasonable rules and regulations.

6.02 The union acknowledges further that it is the function of the company to hire, promote, demote, transfer and lay-off employees and to suspend, discipline and discharge employees for just and sufficient cause. Any exercise of these rights in conflict or inconsistent with the provisions of this agreement shall be subject to the provisions of the grievance procedure set forth in Article 4.

How does the existence of a collective agreement turn the exploitative and oppresive situation of workers into one where they have a “fair contract” and “decent work?” Unions can limit exploitation and can control some aspects of their working lives, but in principle workers are things to be used by employers even with unions. This does not mean that a non-unionized environment is the same as a unionized environment. With unions that are independent of particular employers, that is to say, are real unions, there is an opportunity for workers to develop organizations of resistance against the power of particular employers.

Workers and not just unions, however, cannot resist the power of the employers as a class unless workers organize as a class, and furthermore they cannot change the situation unless they themselves realize the limitations of their own local, regional and national organizations when faced with the power of the class of employers (and the government that supports them), teach that to their members and are open persistently to criticism from below. In addition, unless they start to organize as a class with the aim of eliminating the class power of employers, they will be subject to a back-and-forth movement of reform and counter-reform (see Anti-Neoliberalism Need Not Be Anti-Capitalist: The Case of the Toronto Radical John Clarke, Part Four: The Welfare State and Neoliberalism, or The Infinite Back and Forth Movement of Capitalism). 

The ideology of unions–that somehow they can produce a “fair contract” and “decent work”–needs, though, to be constantly criticized. Workers deserve better than the acceptance of such ideology by the social-democratic or social-reformist left.

Data on Which the Calculation Is Based

The calculation of the rate of exploitation is undoubtedly imperfect, and I invite the reader to correct its gaps. Nonetheless, the lack of any attempt to determine the rate of exploitation at the city level has undoubtedly reinforced social-reformist tendencies.

I initially try to outline how the annual report calculates the Earnings Before Income Taxes (EBIT) and then makes some adjustments according to Marxian theory and on the basis of certain quantiative assumptions. 

Now, the calculation (in millions of Canadian dollars)

Sales 16,767.5 
Cost of sales (13,438.8) 
Gross margins 3,328.7 [16,767.5-13,438.8=3,328.7]

Operating expenses
Wages and fringe benefits (880.6)
Employee benefits expense (note 23) (85.8)
Rents and occupancy charges (529.2)
Retail network restructuring expenses (36.0)
Gain on divestiture of pharmacies 6.0
Others (481.6)
Total operating expenses 2007.2 (Add all the numbers in parentheses and subtract the 6.0 that is not=2007.2)

Since wages and benefits constitute variable capital (v), we should add them together:
Wages, fringe benefits and employee benefits expense: 966.4

Income net of operating expenses $1,321.5 [Gross margins-Total operating expenses=3,328.7-2007.2=1,321.5]

Depreciation and amortization

Fixed assets (note 11) (210.3) 
Investment properties (note 12) (0.7) 
Intangible assets (note 13) (75.4) 
Total (286.4) (=210.3+0.7+75.4)

Income net of depreciation and amortization 1035.1 [1,321.5-286.4=1035.1]

Financial costs, net
Current interest (2.9) 
Non-current interest (103.5) 
Interests on defined benefit obligations net of plan assets (note 23) (2.1) 
Amortization of deferred financing costs (2.9) 
Interest income 7.8 
Passage of time (0.2) 

Total net financial costs (103.8) (numbers in parentheses mean that the numbers were deducted from income as they are considered an expense from a particular capitalist’s point of view; those without parentheses are income and need to be subtracted since they are income) (2.9+103.5+2.1+2.9+0.2=111.6; 111.6-7.8=103.8)
Earnings before income taxes 931.3 (1035.1-103.8=931.3). 

The annual report, though, has “Earnings before income taxes” as 969.2. However, this number includes the following: 

Gain on disposal of a portion of the investment in an associate 36.4 (note 10)
Gain on revaluation and disposal of an investment at fair value 1.5 (note 10)

Note 10 indicates the following:

During the first quarter of 2019, the Corporation finalized the disposal of the entire investment at fair value in Alimentation Couche Tard Inc. (ACT).

It cannot be assumed that the value of property disposed of has nothing to do with the exploitation of Metro workers; the profit obtained from their exploitation might have been reinvested in the acquisition of ACT in the first place.

However, since such possible exploitation would have occurred earlier, I will exclude it from the calculations since the issue is the current rate of exploitation in 2019. 

36.4+15.=37.9; 969.2-37.9=931.3
Earnings before income taxes and before adjustments 931.3

Adjustments 

Adjustments of Surplus Value (Profit)

In Marxian theory, it is necessary to question whether some expenses are expenses for both the individual employer and for the class of employers (and fractions of their class, such as those who live on interest); where there is a coincidence of expenses for individual employers and the class of employers, the expense is deducted from total revenue.

Adjustment of Interest

On the other hand, there are expenses that are expenses for the individual employer but are not expenses when looked at from the point of view of the class of employers; in such an instance, they are paid out from the surplus value produced or obtained by workers and are to be included in income before taxes. For example, interest is such a category. 

As I wrote in another post: 

As explained in another post, interest in many instances can be treated as part of the surplus value produced and therefore added to net income since, although from the point of view of the individual capitalist it is an expense, from the capitalist economy as a whole it is derived from the production of surplus value. 

In addition, there are some so-called expenses that are allegedly salaries and other forms of income that are likely derived from surplus value; they have the form or appearance of wages or salaries but are really surplus value in disguise (such as the “salary” of CEOs). They need to be subtracted from expenses and added to “Earnings before income taxes.”  

Since interest forms part of surplus value, the total interest paid, 111.6, needs to be added to “Earnings before incomes taxes.” Accordingly: 

Temporality adjusted earnings before income taxes 1042.9 (931.3 + 111.6=1042.9)

Adjustment of Various Managerial Benefits

Various forms of income are available for senior managers and key employees that likely are derived exclusively from exploiting the rest of the workers. There are three categories in particular that apply here: stock option plan, peformance share unit plan and deferred share unit plan. Below, I quote from the annual report to show the nature of each plan as a plan for upper managerial employees of one form or another:

Stock option plan
The Corporation has a stock option plan for certain Corporation employees providing for the grant of options to purchase up to 30,000,000 Common Shares. As at September 28, 2019, a balance of 4,189,336 shares could be issued following the exercise of stock options.

Performance share unit plan (PSU)
The Corporation has a PSU plan. Under this program, senior executives and other key employees (participants) periodically receive a given number of PSUs. The PSUs entitle the participant to Common Shares of the Corporation, or at the latter’s discretion, the cash equivalent, if the Corporation meets certain financial performance indicators. 

Deferred Share Unit Plan (DSU)
The Corporation has a DSU plan designed to encourage stock ownership by directors who are not Corporation officers. Under this program, directors who meet the stock ownership guidelines may choose to receive all or part of their compensation in DSUs. 

Conveniently, the money for these managers is separately calculated for each category: 

Stock options: $2 million; PSUs: $6.6 million; DSUs: $6.2 million. Total: $14.8 million. This must be added to Earnings before income taxes. 

Temporarily adjusted earnings before income taxes 1057.7 (1042.9+14.8)

Adjustment for Rents and occupancy charges

As I wrote in another post: 

Another expense category is also relevant for making adjustments–the category “Rents and occupancy charges.” The rent of buildings, like the rent of equipment, is an expense both at the level of the firm and at the level of the economy as a whole. However, in the case of occupancy, rent also includes the capitalized value of land, and this capitalized value of land is derived from surplus value (see Jorden Sandemose (2018), Class and Property in Marx’s Economic Thought: Exploring the Basis for Capitalism). Again, without further information, it is impossible to tell or determine the proportion that is paid for the rental of buildings and the rental of land. I will assume that 10 percent of rent is due to the exclusive ownership of land (a non-produced means of production).

This 10 percent is equal to $52.92 million and must be added to the category “Earnings before income taxes.” Accordingly:

Adjusted Results

Adjusted earnings before income taxes 1110.62 (1057.7+52.92)
Wages, fringe benefits and employee benefits expense: 966.4

The Rate of Exploitation of Metro Workers

To calculate the rate of surplus value, we need to relate “Adjusted earnings before income taxes” to “Wages, fringe benefits and employee benefits expense” So, with the adjustments in place:, s=1110.62; v=966.4. The rate of exploitation or the rate of surplus value=s/v=1110.62/966.4=115 percent.

That means that for every hour worked that produces her/his wage, a worker at Metro works around an additional 69 minutes (1 hour 9 minutes) for free for Metro. Alternatively expressed, for every hour worked that produces her/his wae, a worker at Metro works 28 minutes that produces her/his wage and 32 mintues for free for Metro. 

According to a few people who have worked at Metro, the length of the working day is:

you will work up to 9 hrs or 4hrs

On a average day you work 8 hours

5-8hours/day

7 hours a day and 4 hours on weekdays.

I will calculate the division of the working day from the shortest to the longest in the above quotes accordingly. I use minutes and not just hours.

  1. For a 4 hour working day (240 minutes), Metro workers spend 112 minutes (1 hour 52 minutes) to obtain their wage for the day, and they spend 128 minutes (2 hours 8 minutes) in obtaining a surplus value or profit for Metro. 
  2. For a 5 hour working day (300 minutes), Metro workers spend 140 minutes (2 hours 20  minutes) to obtain their wage for the day, and they spend 160 minutes (2 hours 40 minutes) in obtaining a surplus value or profit for Metro. 
  3. For a 7 hour working day (420 minutes), Metro workers spend 195 minutes (3 hours 15 minutes) to obtain their wage for the day, and they spend 225 minutes (3 hours 45  minutes) in obtaining a surplus value or profit for Metro. 
  4. For an 8 hour working day (480 minutes), Metro workers spend 223 minutes (3 hours 43  minutes) to obtain their wage for the day, and they spend 237 minutes (3 hours 57 minutes) in obtaining a surplus value or profit for Metro. 
  5. For a 9 hour working day (540 minutes), Metro workers spend 251 minutes (4 hours 11 minutes) to obtain their wage for the day, and they spend 289 minutes (4 hours 49 minutes) in obtaining a surplus value or profit for Metro. 

It should be noted that I have used the verb “obtain” rather than “produce.” In Marxian economics, sales workers do not produce surplus value but rather transfer the surplus value already produced. This does not mean that these workers are not exploited capitalistically; they are used impersonally by the employer to obtain surplus value and a profit. Furthermore, things produced by others are used by employers such as Metro to control their working lives in order to obtain surplus value or profit.

Furthermore, some Metro workers do produce surplus value in that their labour involves transportation services; storage workers may perhaps also produce surplus value (this is a grey area for me). 

Of course, during the time that the worker works to obtain an equivalent of her/his own wage, s/he is subject to the power of management and hence is also unfree during that time (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation and   Employers as Dictators, Part One).

Most Metro workers belong to a union. This is what the annual report has to say about labour relations: 

LABOUR RELATIONS

The majority of our store and distribution centre employees are unionized. Collective bargaining may give rise to work stoppages or slowdowns that could impact negatively the Corporation. We negotiate agreements with different maturity dates and conditions that ensure our competitiveness, and terms that promote a positive work environment in all our business segments. We have experienced some minor labour conflicts over the last few years but expect(3) to maintain good labour relations in the future.

Do you think that these facts contradict the talk by the left and unionists of “fair wages,” “fair contracts” (see  Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One for the rhetoric of the largest union in Canada, the Canadian Union of Public Employees (CUPE)) and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized?

If exploitation and oppression of workers is a constant in their lives, even if they are only vaguely aware of it, should this situation not be frankly acknowledged by their representatives? Do such representatives do so? If not, why not?  Do workers deserve better than neglecting the social context within which they live and work? Should such problems be addressed head on rather than neglected? 

Even if workers were not exploited, they would still be oppressed since they are used as things (means) for purposes which they as a collectivity do not define (see The Money Circuit of Capital). Does that express something fair? Management rights clauses (implied or explicit in collective agreements give management as representative of employers–and as a minority–the power to dictate to workers what to do, when to do it, how to do it and so forth–and is not the imposition of the will of a minority over the majority a dictatorship? (See  Employers as Dictators, Part One). Is that fair? Do union reps ever explain how a collective agreement somehow expresses something fair? Is that fair?

Is the following an example of what union reps mean by a “fair contract?”

Between METRO ONTARIO INC. C.O.B. AS METRO RIDEAU
and
UNIFOR AND ITS LOCAL 414 UNIFOR Union Canada
Effective from: February 18, 2017 to February 17, 2020

ARTICLE 6: MANAGEMENT RIGHTS

6.01 The union acknowledges the right of the company to manage and operate its business in all respects, to direct the working force and to establish and maintain reasonable rules and regulations.

6.02 The union acknowledges further that it is the function of the company to hire, promote, demote, transfer and lay-off employees and to suspend, discipline and discharge employees for just and sufficient cause. Any exercise of these rights in conflict or inconsistent with the provisions of this agreement shall be subject to the provisions of the grievance procedure set forth in Article 4.

How does the existence of a collective agreement turn the exploitative and oppresive situation of workers into one where they have a “fair contract” and “decent work?” Unions can limit exploitation and can control some aspects of their working lives, but in principle workers are things to be used by employers even with unions. This does not mean that a non-unionized environment is the same as a unionized environment. With unions that are independent of particular employers, that is to say, are real unions, there is an opportunity for workers to develop organizations of resistance against the power of particular employers.

Workers and not just unions, however, cannot resist the power of the employers as a class unless workers organize as a class, and furthermore they cannot change the situation unless they themselves realize the limitations of their own local, regional and national organizations when faced with the power of the class of employers (and the government that supports them), teach that to their members and are open persistently to criticism from below. In addition, unless they start to organize as a class with the aim of eliminating the class power of employers, they will be subject to a back-and-forth movement of reform and counter-reform (see Anti-Neoliberalism Need Not Be Anti-Capitalist: The Case of the Toronto Radical John Clarke, Part Four: The Welfare State and Neoliberalism, or The Infinite Back and Forth Movement of Capitalism). 

The ideology of unions–that somehow they can produce a “fair contract” and “decent work”–needs, though, to be constantly criticized. Workers deserve better than the acceptance of such ideology by the social-democratic or social-reformist left.

The Rate of Exploitation of Workers at WestJet Airlines Ltd.

Introduction

In two others posts I presented the twenty largest employers in Toronto according to level of employment (see A Short List of the Largest Employers in Toronto, Ontario, Canada) and the twenty largest employers in Canada according to profit (see A Short List of the Largest Private Employers in Canada, According to Profit). The largest employer, in terms of employment, is the Canadian Imperial Bank of Commerce.

I have tried to calculate the rate of exploitation of workers by various employers, such as Magna International in an earlier post (see The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One); Magna International is one of the largest employers in Toronto.

I also calculated the rate of exploitation of Air Canada workers (see The Rate of Exploitation of Workers at Air Canada, One of the Largest Private Employers in Canada). This time I calculated the rate of exploitation of another airline: WestJet. 

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies in Toronto and Canada if they are available in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

I took the data from the 2018 annual report–the most accessible annual report. 

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.

We have the following:

The rate of exploitation or the rate of surplus value=s/v=232,658.7/997,313.3=23%. 

That means that for every hour worked that produces her/his wage, a worker at WestJet works around an additional 14 minutes for free for WestJet. 

In a 5.2 hour work day, the worker produces her/his wage in 4 hours 14 minutes (254 minutes) and works 58 minutes for free for WestJet.

Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario  and   Employers as Dictators, Part One). The same applies to the following. 

In an 8-hour work day, the worker produces her/his wage in 6.5 hours and works for 1.5 hours free for WestJet.

In an 8.5-hour day, the worker produces her/his wage in  6 hours 55 minutes and works for free for 1 hour 35 minutes for WestJet.

In a 10-hour day, the worker produces her/his wage in 8 hours 8 minutes and works for free for 1 hour 42 minutes for WestJet. 

Given this rate of exploitation and oppression, what are we to make of the following management rights clause in the collective agreement between WestJet and the Canadian Union of Public Employees (CUPE) Local 4070 (or, in French, Syndicat canadien de la fonction publique (SCFP))? 

ARTICLE 3 – MANAGEMENT RIGHTS

3-1.01 Except to the extent expressly limited or modified by a specific provision of this Agreement, the Company reserves and retains, solely and exclusively, all of the inherent rights, powers and authority to manage the business and direct its workforce and all the matters relating thereto. These rights, powers and authority include, but are not limited to hiring, assigning, promoting, demoting, classifying, transferring, lay-off, recall, suspending, discharging or otherwise disciplining Cabin Personnel; establishing and enforcing rules of conduct; maintaining order and efficiency; requiring Cabin Personnel to observe reasonable rules and regulations which may be promulgated by the Company, introducing new equipment; determining the location(s) of the workforce, operations, and facilities; planning, scheduling, directing and controlling operations.

3-1.02 The Union shall be advised of any changes to policies governing Cabin Personnel at least five (5) Days before such policies become effective unless the Parties mutually agree to a shorter advance notification period. This five (5) Day requirement will not apply when the Company is required by law to make immediate changes or in the event of emergency circumstances that reasonably require immediate change.

Is this management rights clause an example of the nature of “fair contracts” according to the major Canadian unions (such as CUPE, Unifor and NUPGE)? See  Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One: The Canadian Union of Public Employees (CUPE)Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Three: Unifor (Largest Private Union in Canada)  and Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Four: The National Union of Public and General Employees (NUPGE)(The Second Largest Union in Canada).      

Should not unions, even in the public sector, be teaching the limitations of collective agreements and collective bargaining? In the private sector, should they not also be teaching the workers that no collective agreement and no collective-bargaining process can abolish the exploitation of the workers–without driving the company out of business?

Or are unions silent on such limitations? Moreover, do they try to sell the idea to their members that the collective agreement is fair? 

What do you think? Given what you think, what should you be doing? Are you doing it? Why or why not? 

Data on Which the Calculation Is Based

I will calculate the rate of exploitation or the rate of surplus value for each approximate variation of the length of the working day (a more detailed explanation of how to calculate the rate of exploitation is provided in the post The Rate of Exploitation of the Workers of the Canadian Imperial Bank of Commerce (CIBC), One of the Largest Private Employers in Toronto and in Canada).

(in thousands of Canadian dollars)

Revenue 4,733,462
Operating expenses 4,578,235
Earnings from operations 155,227
Earnings before income taxes (EBT) 135,882

There is a difference of 19,345 between the category “Earnings from operations” and “Earnings before income taxes” (155,227-135,882=19345).

This difference can be accounted for on the basis of the category “Non-operating income (expense)”. 

Non-operating income (expense):
Finance income 29,421
Finance cost (57,027)
Gain (loss) on foreign exchange 2,966
Gain on disposal of property and equipment 4,049
Gain (loss) on derivatives 1,246

When you add the numbers that are without parentheses (that is to say, considered to be income) and subtract the numbers that are in parentheses (that is to say, considered to be an expense), then the net result is an expense of (19,345). 

Operating expenses need to be broken down further since expenses for maintaining workers as wage workers form one of the two considerations for the calculation of the rate of exploitation.

Expenses ($ in thousands)
Aircraft fuel 1,231,632
Salaries and benefits 999,381
Rates and fees 691,293
Sales and marketing 440,292
Depreciation and amortization 429,906
Maintenance 232,053
Aircraft leasing 139,703
Other 398,038
Employee profit share 15,937
Total operating expenses 4,578,235

Adjustments

In Marxian theory, it is necessary to question whether some expenses are expenses for both the individual employer and for the class of employers (and fractions of their class, such as those who live on interest); where there is a coincidence of expenses for individual employers and the class of employers,  the expense is deducted from total revenue.

On the other hand, there are expenses that are expenses for the individual employer but are not expenses when looked at from the point of view of the class of employers; in such an instance, they are paid out from the surplus value produced or obtained by workers and are to be included in income before taxes. For example, interest is such a category. 

As I wrote in another post: 

As explained in another post, interest in many instances can be treated as part of the surplus value produced and therefore added to net income since, although from the point of view of the individual capitalist it is an expense, from the capitalist economy as a whole it is derived from the production of surplus value. 

In addition, there are some so-called expenses that are allegedly salaries and other forms of income that are likely derived from surplus value; they have the form or appearance of wages or salaries but are really surplus value in disguise (such as the “salary” of CEOs). They need to be subtracted from expenses and added to “Earnings before taxes.”  

Adjustments of Non-operating income (expense) and Surplus Value (s)

I will treat this subcategory and its amount “Finance cost (57,027)”  as part of the surplus value produced by WestJet workers but paid out as interest to loan capitalists (banks, for example). The same applies to the other amounts within this category. The result is an additional $94,709 thousands (29,421+57,027+2,966+4,049+1,246=94,709). This amount needs to be added to “Earnings before income taxes (EBT),” 135,882, with the result: 

Temporarily adjusted Earnings before income taxes (surplus value (s) $230,591 thousands. 

Adjustments of Salaries and Benefits: Variable Capital (v)

Salaries and benefit plans can be further broken down:

Salaries and benefits plans 880,701
Employee share purchase plan 102,692
Share-based payment plans 15,988
Total salaries and benefits 999,381

The category “Employee share purchase plan” does not need any adjustment since it does indeed form part of the benefits of WestJet workers.

A note provides additional information:

Employee share purchase plan (ESPP)

The ESPP encourages employees to become owners of WestJet and provides employees with the opportunity to significantly enhance their earnings. Under the terms of the ESPP, employees may, dependent on their employment agreement, contribute up to a maximum of 10 per cent, 15 per cent or 20 per cent of their gross salary to acquire voting shares of WestJet at the current fair market value. The contributions are matched by WestJet and are required to be held within the ESPP for a period of one year. For the year ended December 31, 2018, our matching expense was $102.7 million.

The above $102,692 million is thus WestJet’s contribution to the purchase of WestJet stock.

I will assume that the employee share purchase plan forms part of the total income of WestJet workers. This assumption is justified since such a plan is designed, apparently, to replace a pension plan (and I have treated pension plans when calculating the rate of exploitation as part of salaries and benefits). From The Globe and Mail (May 14, 2019):

The questions from employee groups on the call quickly focused on the employee share-purchase plan. Instead of a pension plan, workers can invest as much as 20 per cent of their pay in WestJet stock and the company will match it. 

The employee share purchase plan amount does not change the calculation of v, but it does clarify why it should be included in the category “Total salaries and benefits.”

If the $102,692 is added to the amount of salaries and benefits, we obtain $983,393. 

Adjustments for Share Based Payment Plans

The same could only partially be said of the other category “Share based payment plans.” 

The following note elaborates on the nature of “Share-based payment plans”:

Share-based payment plans
We have three equity-settled share-based payment plans whereby either stock options, restricted share units (RSUs) or performance share units (PSUs) may be awarded to pilots, senior executives and certain non-executive employees. For the year ended December 31, 2018, share-based payment expense totaled $16.0 million.

“Share-based payment plans” is further broken down as follows:

Stock option plan 10,428
Key employee plan 5,039
Executive share unit plan 521
Total share-based payment expense 15,988

With no further detailed information about “Stock option plan,” and since pilots undoubtedly produce surplus value (they are exploited), I will assume that only ten percent of 10,428 is surplus value appropriated by senior management; this is also justified since pilots are likely to form most of the personnel in this category (although it is impossible to determine this with precision). Consequently, 10 percent of 10,428 is 1042.8 and is subtracted from “Total share-based payment expense” and added to “Earnings before income taxes (EBT).” The remaining 9,385.2 million is added to the category “Salaries and benefits plans” and the added amount from “Employee Share

Adjustments for Stock Option Plan

Temporarily adjusted Earnings before income taxes (surplus value (s): $231,633.8 thousands. 
Temporarily adjusted salaries and benefits: variable capital (v): $992,778.2 

Adjustments for Key Employee Plan

A note indicates the nature of the “Key employee plan”:

(d) Key employee plan
The Corporation has a key employee plan (KEP), whereby restricted share units (RSU) are issued to senior management and pilots of the Corporation.

Since pilots form part of this group, I will follow the same logic as for the group who receive stock options–10 percent of 5,039 is 503.9 and is subtracted from “Total share-based payment expense” and added to “Earnings before income taxes (EBT).”  The remaining $4535.1 ]  is added to the category “Salaries and benefits plans.

Accordingly: 

Temporarily adjusted Earnings before income taxes (surplus value (s): $232,137.7 thousands. 
Temporarily adjusted salaries and benefits: variable capital (v): $997,313.3

Final Adjustments: Executive Share Unit Plan

The category “Executive share unit plan” is different from the other two share-based payment plans.

A note indicates the nature of “Executive share unit plan”: 

(e) Executive share unit plan
The Corporation has an equity-based executive share unit (ESU) plan, whereby RSUs [restricted share units] and performance share units (PSU) may be issued to senior executive officers.

“Executive share unit plan” is probably compensation, not mainly for the coordination of the work of others but for the exploitation of others–it is pure surplus value. Accordingly, 521 is therefore completely subtracted from “Total share-based payment expense” and added to “Earnings before income taxes (EBT).” 

With this, final adjustments are possible and the rate of surplus value or the rate of exploitation can be calculated. 

Final Calculation (Based on Adjustments) of Surplus Value, Variable Capital (Salaries or Wages and Benefits) and the Rate of Surplus Value 

The result of all of these adjustments is: 

Adjusted earnings before income taxes (surplus value (s): $232,658.7 thousands. 
Adjusted total salaries and benefits: variable capital (v): $997,313.3

To calculate the rate of surplus value, we need to divide “Adjusted earnings before income taxes” (s) by “Adjusted total salaries and benefits” (v).

So, with the adjustments in place, the rate of exploitation or the rate of surplus value=s/v=232,658.7/997313.3=23%. 

That means that for every hour worked that produces her/his wage, a worker at WestJet works around an additional 14 minutes for free for WestJet. 

In a 5.2 hour work day, the worker produces her/his wage in 4 hours 14 minutes (254 minutes) and works 58 minutes for free for WestJet. Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario  and   Employers as Dictators, Part One).

In an 8-hour work day, the worker produces her/his wage in 6.5 hours and works for 1.5 hours free for WestJet.

In an 8.5-hour day, the worker produces her/his wage in  6 hours 55 minutes and works for free for 1 hour 35 minutes for WestJet.

In a 10-hour day, the worker produces her/his wage in 8 hours 8 minutes and works for free for 1 hour 42 minutes for WestJet. 

I have used the lengths of the working day as 5.2, 8 8.5 and 10 because the length of the working day varies. According to one source:

They have a flexible schedule for part time. Full time is required 40 hours. They do permit shift trading.

In my last role 8.5hrs, in prior roles it depended on my shifts etc.

8 to 10 hours per day

26 hours a week. Everyone starts out a part time.

The above lengths of the working day, translated into hours per day (assuming a five-day work week) are:

  1. 5.2 hours per day or 312 minutes
  2. 8 hours per day or 480 minutes
  3. 8.5 hours per day or 510 minutes
  4. 10 hours per day or 600 minutes 

Comparison of the Rate of Exploitation of WestJet Workers with Other Workers

The rate of exploitation of WestJet workers is quite low relative to other workers. Below I organize the rates of exploitation that I have calculated so far, from lowest to highest: 

  1. WestJet workers: 23%
  2. Telus workers: 58% 
  3. Air Canada workers: 70%
  4. Magna International workers: 79% (2019); 43% (2020) 
  5. Bank of Montreal (BMO): 92% 
  6. Bell Canada Enterprises (BCE): 100% 
  7. Canadian Imperial Bank of Commerce (CIBC): 120%
  8. Toronto-Dominion Bank (TD Bank): 123% 
  9. Royal Bank of Canada (RBC): 124% 
  10. ScotiaBank (Bank of Nova Scotia): 147% 
  11. Suncor Energy workers: 148% 
  12. Rogers Communication: 209% 

The divergences in the rate of exploitation are substantial: the absolute percentage difference between the rate of exploitation of WestJet workers and the rate of exploitation of Rogers Communications workers is 186%. 

Factors That Determine the Rate of Exploitation in Relation to Divergences in the Rates of Exploitation 

The rate of surplus value has three main factors which determine its level: 

1. The real wage (basket of commodities consumed by workers at non-changing prices). In the short term, the real wage is undoubtedly influenced by the class struggle–the level of organization of workers, the aims of such organization, the extent of the elimination of competition among workers and so forth. Even in the long run, it may be influenced through the incorporation of more and qualitatively more diverse commodities (historical and moral influence)–but this should not be exaggerated since real wages ultimately are limited by the rate of accumulation.

2.  The absolute level of the production of surplus value, determined by such factors as

a. the length of the working day. For example, if workers work 7 hours a day, with a rate of exploitation of 100%, then the worker produces her/his wage in 3.5 hours and produces a surplus value of 3.5 hours. If the working day increases to 7.5 hours, then the rate of exploitation increases, from 100% to 114% (s=4; v=3.5; s/v=4/3.5=1.14=114%). 

b. the intensity of work (which itself can be a function of other factors, such as the level of managerial organization, the principles of managerial supervision and technological conditions that force workers to work at an intensified level). The same number of hours may contain, relative to before, more labour. With a constant real wage, more surplus value is produced and hence a higher rate of exploitation. 

3.  Relative surplus value, determined by changes in technology (which alter the value of the commodities consumed by workers, reducing the value of the commodities consumed by workers, thereby increasing the remaining value as surplus value. For example, at the brewery where I worked, when I first started to work there, we could produce a maximum of 550 bottles of beer per minute, and when I quit, we could produce a maximum of 1,400 bottles per minute. The value of the bottles of beer undoubtedly decreased (although the price did not reflect this proportionately–taxes form a substantial portion of price). With lower values–and prices–for commodities consumed by workers, the workers perform less time producing the equivalent value of their wage and hence more time producing a surplus value, which therefore raises the rate of exploitation, s/v. Thus, with the technological change in beer production, the value of beer decreased. With the same level of worker beer consumption as before (the same real wage), the value of the commodity the workers sell (labour power–the capacity to perform labour for a certain period of time) decreases, leading to more value remaining for the employer–hence more surplus value and a higher rate of exploitation.  

To explain the divergences in the rate of exploitation at this micro level according to the above three factors or variables would require much more empirical work (and probably theoretical work to make required connections). I lack the capacity for this. If others can in any way improve on the calculation of the rate of exploitation, feel free to do so.

In any case, other factors undoubtedly influence the perceived or empirical rate of exploitation (as calculated by me). Thus, one major factor that would need to be included is the difference between the surplus value initially produced (or received by commercial and banking institutions) and the final distribution of surplus value. The production of surplus value and its distribution are unlikely to be the same since the proportion of investment in constant capital (c) and variable capital (v) will vary according to the kind of industry and level of technological development. I explain this in a comment to the post The Rate of Exploitation of Workers at Air Canada, One of the Largest Private Employers in Canada.  

Static Versus Dynamic Considerations of the Rate of Exploitation

The above comparative analysis definitely has limitations since it provides only a snapshot picture of rates of exploitation for different employers. When we consider the mobility of workers within and between industries, however, there may be a tendency towards an equalization of the rate of exploitation. This would require further empirical research, of course, as well as further theoretical considerations.

One author argues that there is a tendency towards equal rates of exploitation via worker mobility (he sometimes calls it labour mobility). He refers to Adam Smith’s theory of worker mobility. Adam Smith was a political philosopher and political economist who published the book The Wealth of Nations in 1776.

From Jonathan Cogliano (2021), “Marx’s Equalized Rate of Exploitation,” Working Paper Series, University of Massachusetts, page 20: 

One implication of the view put forward in sections 4 and 5 is that Marx fully adopts [Adam] Smith’s theory of the turbulent equalization of the whole of the advantages and disadvantages and re-purposes it into a turbulently equalizing rate of exploitation is that workers then know the degree to which they are exploited and move between sectors accordingly. Marx discusses how workers understand that they are exploited in his discussion of the struggle over the length of the working day, but he does not state explicitly that workers know their rate of exploitation (Marx 1976, pp.342-344). However, the wholesale adoption of Smith’s balancing whole of the advantages and disadvantages of labor implies that workers do know the degree to which they are exploited and migrate across sectors in response to changes or differentials across sectors.

Workers making decisions of how to allocate their labor across industries in this way does not require that workers base the decision on magnitudes measured in labor values— i.e. basing the decision on surplus value and the value of labor power. Workers’ movement across sectors as informed by money prices still induces the EQRE. As Foley (2016, pp.378- 380) discusses, surplus value captures overall surplus labor effort in the money form and if workers base their mobility decisions on the effort they expend and the wage they are paid then these movement decisions will tendentially induce the EQRE. This rests on some notion of a connection between labor effort and money value added

It would be necessary to consider both theoretically and empirically the dynamics of worker mobility in relation to the rate of exploitation to determine whether such a tendency in fact holds. Unfortunately, there is little research here in Toronto or indeed in Canada, as far as I can tell, concerning anything having to do with the rate of exploitation at the micro level and its interface with tendencies at the macro level.


The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part Three, Updated, 2020

Introduction

In two others posts I presented the twenty largest employers in Toronto according to level of employment (see A Short List of the Largest Employers in Toronto, Ontario, Canada) and the twenty largest employers in Canada according to profit (see A Short List of the Largest Private Employers in Canada, According to Profit).

I have tried to calculate the rate of exploitation of workers of workers in several capitalist companies: Magna International, Bell Canada Enterprises (BCE), ScotiaBank (Bank of Nova Scotia), Bank of Montreal (BMO), Telus, Royal Bank of Canada (RBC), Suncor Energy, Toronto-Dominion Bank (TD Bank),Rogers Communications Inc., the Canadian Imperial Bank of Commerce (CIBC) and  Air Canada,  (see for example The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One).

I thought it might be useful to begin the comparison of rates of exploitation of the same capitalist employer for different years. Although this fails to capture the dynamic of capitalist relations of production and exchange (being two snapshots at different times), it may provide further insight into the nature of capitalist society.

The structure of the post is as follows:

  1. I outline the nature of the rate of exploitation
  2. I then provide “Conclusion first,”
    a. the 2020 rate of exploitation is indicated
    b. the 2020 rate of exploitation is compared with the 2019 rate and some possible explanations of the differences are provided
    c. a long quote of a discussion around tactics and strategies between Sam Gindin (former research director of the Canadian Autoworkers Union (CAW) (now Unifor) and me relating to  union ideology.
    d. Further brief criticisms of Mr. Gindin’s political position
    e. Consideration of an Integram Bargaining Report produced by Unifor Local 444 (Integram is a division of Magna International), dated November 8, 2020 in relation to Mr. Gindin’s views
  3. How I calculated the rate of exploitation (including adjustments) as well as a justification for interpreting the substantial decrease in the rate of exploitation in terms of “fixed costs.”
  4. The conclusions as stated in 2.

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies in Toronto and Canada if they are available in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.

The Rate of Exploitation

So, with the adjustments in place: s=1081; v=2,509. The rate of exploitation or the rate of surplus value=s/v=1081/2,509=43%.

I will first consider this rate in relation to the workers in 2020, and then compare this rate with the 2019 rate of exploitation.

That means that for every hour worked that produces her/his wage, a worker at Magna International works around an additional 26 minutes for free for Magna International. Alternatively, in terms of money, $1 of wage or salary of a regular Magna International worker produces around $0.43 (43 cents) surplus value or profit for free.

  1. In an 8-hour work day (480minutes), the worker produces her/his wage in 336 minutes (5 hours  36 minutes) and works 144 minutes (2 hours 24 minutes) for free for Magna International.
  2. In an 9-hour work day (540minutes), the worker produces her/his wage in 378 minutes (6  hours 18 minutes) and works 162 minutes (2 hours 42 minutes) for free for Magna International.
  3. In an 10-hour work day (600 minutes), the worker produces her/his wage in 420 minutes (7  hours) and works 180 minutes (3 hours) for free for Magna International.
  4. In an 12-hour work day (720 minutes), the worker produces her/his wage in 503 minutes (8  hours  23 minutes) and works 217 minutes (3 hours 37 minutes) for free for Magna International.

Comparison of the 2019 Rate of Exploitation with the 2020 Rate of Exploitation

2020: So, with the adjustments in place: s=1081; v=2,509. The rate of exploitation or the rate of surplus value=s/v=1081/2,509=43%.
2019: So, with the adjustments in place: s=2,258; v=2,862. The rate of exploitation or the rate of surplus value=s/v=2,258/2,862=79%.

The absolute decrease in s is substantial: 1,177, and the rate of decrease is 52% (1081-2,258)/2,258=-1,177/2,258).

By contrast, the absolute decrease in v is much less: 353, and the rate of decrease is (2509-2862)/=2509=-353/2862=12%.

The substantial decrease in the rate of exploitation is likely due to the treatment of workers as “fixed costs” as the pandemic forced employers to retain workers despite the relatively extra costs associated with it (partly offset by federal, provincial and municipal supports).

There may, of course, be other causes of the decrease in the rate of exploitation, such as problems pertaining to supply of inputs, but I will leave that issue aside.

It should be emphasized that the exploitation of workers pertains to the production of a surplus beyond the production of the value equivalent of their own costs of production. Even during the time the workers require to produce their wage, they are oppressed by employers since they are subject to the will of the employer (or her representatives) and to the control over their labour.

Political Considerations

The rapid decrease in the rate of exploitation of workers of Magna International with the onset of the pandemic will likely call for an opposite pressure to increase exploitation directly through intensification and an extension of the working day and changes in technology and organization of the production process. Pressures to increase tax breaks for such capitalist employers (and corresponding reduction in state expenditures for welfare measures) may also arise. Of course, some workers will not just lay down and accept such counter-pressures.

Why is it that workers have to put up with this situation? Should they not be organizing not only to resist exploitation and oppression and increased pressures related to those phenomena but also to abolish such pressures? Not according to the social-democratic or social-reformist left. Such organizational efforts, for them, are undoubtedly unrealistic. New structures are supposedly to arise without criticizing the old structures.

Thus, for social democrats like Sam Gindin (former research director for the Canadian Auto Workers (CAW) (now Unifor), challenging the ideology of “decent jobs or work,” “fair contract,” “fair collective agreement,” “fair deal,” “fair wages” and other abstract phrases (rhetoric) is relatively unimportant. New material structures more relevant to the lives and experiences of working people are somehow to arise without constantly challenging the existing social structures–and the corresponding ideology that justifies such structures.

Frankly, I doubt that such new material structures will arise without a persistent and constant challenging of the ideological rhetoric rampant among the left in general and unions in particular.

I will include a rather long quote from a previous post. It is a conversation between Sam Gindin (a self-claimed “leader” of radical workers here in Toronto despite his probable own explicit denial of such a title) and me:

Re: A Good or Decent Job and a Fair Deal
Sam Gindin
Sat 2017-02-18 8:05 AM
Something is missing here. No-one on this list is denying that language doesn’t reflect material realities (the language we use reflects the balance of forces) or that it is irrelevant in the struggle for material effects (the language of middle class vs working class matter And no one is questioning whether unions are generally sectional as opposed to class organizations or whether having a job or ‘decent’ pay is enough. The question is the autonomy you give to language.

The problem isn’t that workers refer to ‘fair pay’ but the reality of their limited options. Language is NOT the key doc changing this though it clearly plays a role. That role is however only important when it is linked to actual struggles – to material cents not just discourse. The reason we have such difficulties in doing education has to do with the limits of words alone even if words are indeed essential to struggles. Words help workers grasp the implications of struggles, defeats, and the partial victories we have under capitalism (no other victories as you say, are possible under capitalism).

So when workers end a strike with the gains they hoped for going in, we can tell them they are still exploited. But if that is all we do, what then? We can – as I know you’d do – not put it so bluntly (because the context and not just the words matter). that emphasize that they showed that solidarity matters but we’re still short of the fuller life we deserve and should aspire to and that this is only possible through a larger struggle, but then we need to be able to point to HOW to do this. Otherwise we are only moralizing. That is to say, it is the ideas behind the words and the recognition of the need for larger structures to fight through that primarily matter. Words help with this and so are important but exaggerating their role can be as dangerous as ignoring it.

What I’m trying to say is that people do, I think, agree with the point you started with – we need to remind ourselves of the limits of, for example, achieving ‘fair wages’. But the stark way you criticize using that word, as opposed to asking how do we accept the reality out there and move people to larger class understandings – of which language is an important part – seems to have thrown the discussion off kilter.

On Sat, Feb 18, 2017 at 7:00 AM, Frederick Harris <arbeit67@hotmail.com> wrote:

I was waiting to see whether there was any dispute concerning either the primary function of language or its material nature. Since there has been no response to that issue, I will assume that the view that the primary function of language is to coordinate social activity has been accepted.

What are some of the political implications of such a view of language? Firstly, the view that “But material conditions matter more” has no obvious basis. If language coordinates our activity, surely workers need language “to reproduce themselves.”

The question is whether coordination is to be on a narrower or wider basis.

Let us now take a look at the view that a contract (a collective agreement) is fair or just and that what workers are striving for is a decent or good job.

If we do not oppose the view that any collective agreement is fair to workers and that the jobs that they have or striving to have are decent jobs, then are we saying that a particular struggle against a particular employer can, in some meaningful sense, result in a contract that workers are to abide by out of some sense of fairness? Does not such a view fragment workers by implicitly arguing that they can, by coordinating their action at the local or micro level, achieve a fair contract and a good job?

If, on the other hand, we argue against the view that the workers who are fighting against a particular employer cannot achieve any fair contract or a decent job, but rather that they can only achieve this in opposition to a class of employers and in coordination with other workers in many other domains (in other industries that produce the means of consumption of workers, in industries that produce the machines and the raw material that go into the factory, in schools where teachers teach our children and so forth), then there opens up the horizon for a broader approach for coordinating activity rather than the narrow view of considering it possible to achieve not a fair contract and a decent job in relation to a particular employer.

In other words, it is a difference between a one-sided, micro point of view and a class point of view.

As far as gaining things within capitalism, of course it is necessary to fight against your immediate employer, in solidarity with your immediate fellow workers, in order to achieve anything. I already argued this in relation to the issue of health in another post.

Is our standard for coordinating our activity to be limited to our immediate relation to an employer? Or is to expand to include our relation to the conditions for the ‘workers to reproduce themselves’?

“They turn more radical when it becomes clear that the system can’t meet their needs and other forms of action become necessary -”

How does it become clear to workers when their relations to each other as workers occurs through the market system? Where the products of their own labour are used against them to oppress and exploit them? Are we supposed to wait until “the system can’t meet their needs”? In what sense?

I for one have needed to live a decent life–not to have a decent job working for an employer or for others to be working for employers. I for one have needed to live a dignified life–not a life where I am used for the benefit of employers. Do not other workers have the same need? Is that need being met now? If not, should we not bring up the issue at every occasion? Can any collective agreement with an employer realize that need?

Where is a vision that provides guidance towards a common goal? A “fair contract”? A “decent” job? Is this a class vision that permits the coordination of workers’ activities across industries and work sites? Or a limited vision that reproduces the segmentation and fragmentation of the working class?

Fred

I guess workers’ explicit consciousness of their own exploitation and oppression and their discussion of such experiences is to arise only after the emergence of “larger structures to fight through.” It is, however, likely that such “larger structures” will simply mimic the “narrower” structures if both are not criticized. How is the CLC (the Canadian Labour Congress)  substantially different from union structures in terms of challenging the class power of employers? Or is Mr. Gindin referring to the larger structures, such as the class power of employers?

My own experience with union reps has been that they assume the necessity and legitimacy of the class power of employers–and do not do anything to raise the issue of the legitimacy of the class power of employers, the exploitation of workers and their oppression among their own members; their aim is to improve the working conditions without questioning at all such class power, exploitation and oppression. I have been a union member, a union rep (union steward and member of a collective-bargaining committee), a member of the executive of a union and a rep for an Equity and Social Justice Committee. I have seen up close the assumptions and limitations and unions–and have tried to address such limitations when and where I could.

The false nature of Mr. Gindin’s political position stands out when he claims the following:

Which brings me back to the point that the problem is not [Wayne] Dealy [union director for the Canadian Union of Public Employees (CUPE) Local 3902] or Sean [Smith,  Unifor Local 2002 Co-Ordinator and Toronto Airport Workers Council (TAWC) activist”] or others but OUR Collective inability to provide them with an effective alternative politics…They can be criticized but only if we do so with humility and part of criticizing ourselves. [my emphasis] 

Is there evidence that Mr. Gindin criticizes his own views? Are union reps (and union members) really conscious of the exploitative and oppressive nature of the class power of employers as such? If so, what are they doing about it? I fail to see evidence of it. I also fail to see evidence of Mr. Gindin engaging in self-criticism. He implicitly assumes that he knows what workers need–and that is not an explicit and real consciousness of their exploitation and oppression–with or without unions, collective bargaining and collective agreements

Let us look at an Integram Bargaining Report produced by Unifor Local 444 (Integram is a division of Magna International), dated November 8, 2020 (see  https://d3n8a8pro7vhmx.cloudfront.net/uniforlocal444/pages/43/attachments/original/1604838387/Integram_Ratification_Bulletin.pdf?1604838387).

It contains such enlightening items as the following:

Our members are their most vital asset that sets the supplier bar in this industry and deserves proper compensation through pay and benefits that award them for their labour and aids the company in retaining their highly skilled workforce. [my emphasis]

I find this language both typical of union reps–and disturbing. As I pointed out above, it is likely that Magna International treated the workers as a “fixed cost” in order to retain them during the worst moments of the pandemic. However, to read a union rep write that Magna workers are “an asset” surely is both disturbing and in need of criticism. Should any human being be considered and treated as an “asset?” Consider any member of your family. Would you want them to be treated as “an asset?”

That they are “assets” is real enough–to be exploited by Magna International (and all other private companies)–but should we not be criticizing this? Is Mr. Gindin in any specific way? Apparently not–since radicals are supposed to only criticize such views in “material cents.” Perhaps Mr. Gindin can provide an example of this in his own concrete practice? I see no concrete examples of his recommendations–they are so vague.

Where is Mr. Gindin’s “humility?” Where is his “self-criticism?”

Let us continue with this Integram Bargaining Report:

deserves proper compensation through pay and benefits that award them for their labour

This is ideology frequently expressed by union reps. “Proper compensation” is a synonym for “fair wages” and, indirectly, a “fair contract.” The union rep clings to the appearance of workers selling their “labour” [labour is an activity that requires a material link between that labour and the means to be used–without those means, there is only a capacity for labour or labour-power. As Marx remarked, in Capital: A Critique of Political Economy, volume 1, page 277:

When we speak of capacity for labour, we do not speak of labour, any more than we
speak of digestion when we speak of capacity for digestion. As is well known, the latter process requires something more than a good stomach.

Workers lack the conditions for the realization of their capacity for labour–just as many in the world lack the conditions for the use of their digestive tract–they lack food. The Unifor union rep., by identifying labour with the commodity which the worker sells, simply ignores the difference between a capacity and the conditions for its exercise–and such neglect of the conditions is hardly in the interests of workers.

How workers sell “labour” that is already linked to the means of production owned by (Magna) Integram (and hence under the control of Integram is a mystery. Furthermore, by identifying compensation with labour, the exploitation of workers by Magna Integram is excluded, and the internal or necessary relation between the wage and the profit of Magna Integram becomes broken.

Does Mr. Gindin criticize this approach so typical of union reps? Not at all. Rather, he criticizes those who engage in such criticism. For him, radicals are to indulge such beliefs. After all, it is only “discourse” and has no “autonomy.” This dismissal of ideological struggles is itself arrogant and lacks humility. Mr. Gindin somehow knows what workers need without even considering in any detail how union reps aid to legitimate the existing class power of employers by constantly using such language.

Where has Wayne Dealy provided any criticism of collective agreements (not the particular provisions of collective agreements) publicly? Sean Smith? Frankly, I find it astounding that such arrogance displayed by Mr. Gindin in his assumption that we are not to engage in criticism of union reps’ views is paraded as “humility” and “self-criticism.”

Let us listen to what Mr. Gindin called “Our Tracy” (McMaster, a union steward for Local 561 of the Ontario Public Service Employees Union (OPSEU); who was also vice-president of the local union at one point):

Collective bargaining is limited and imperfect, but a fuck-ton better than none.

I have hardly denied that collective bargaining is better than none. I have belonged to several unions in my life, and I certainly would prefer to belong to a union when working for an employer than not belonging to one. However, I do not take seriously her claim that “Collective bargaining is limited and imperfect.” I see no evidence that Ms. McMaster takes such a view seriously. Where is the evidence that she has inquired into “the limitations and imperfections” of collective bargaining? Rather, for Ms. McMaster, collective bargaining provides an imperfect but ultimately fair contract.

Perhaps Mr. Gindin can provide evidence to the contrary it. I doubt that he will–or can.

Mr. Gindin’s tactics are as follows: Let us try to convince such union reps of our views. Frankly, I think such an effort is, for the most part, a waste of time. Of course, there are exceptions, and it is necessary to use one’s judgement under specific circumstances and in relation to specific union reps. However, my judgement was and is that it Ms. McMaster would never be really convinced of the “limitations and imperfections” of collective bargaining.

Rather than indulging such union reps, it is in the interests of workers to criticize them and to expose their lack of a critical approach to collective bargaining.

Let us continue to look at this Bargaining Report:

Your bargaining committee achieved Pay Raises, Benefits Improvements, Lowering the new higher grid, Buy-out packages, and Signing Bonus. A healthy contract that reflects a greater worth in our Integram members.

Such achievements, of course, are in the interests of the workers. But why call it a “healthy contract?” Apparently, this is a synonym for a “fair contract”–and I have shown that Canadian unions persistently use such language to justify both the collective-bargaining process and collective agreements (see, for example,   Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One: The Canadian Union of Public Employees (CUPE)  or Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Three: Unifor (Largest Private Union in Canada)). No collective agreement can express something legitimate–unless the necessary exploitation and oppression of workers by employers (including Magna Integram) is somehow legitimate.

In the Bargaining Report, there then follows a list of items that were obtained by the bargaining committee. Not one word of the “limited and imperfect” nature of the collective agreement or the collective-bargaining process. Not one word on the management rights clause, implicit or explicit in the collective agreement. Do not workers persistently experience the power of management in a variety of ways? Why the silence over such experiences? Does the collective agreement address such power? Or does it only address the limited areas defined by collective-bargaining legislation?

For Mr. Gindin, though, to question the “language” used by union reps, as well as the omission of any criticism of the limitations of collective bargaining and collective agreements, expresses merely “moralizing.”

I will leave Mr. Gindin with his fake humility and his fake self-criticism. I will continue to engage in “discourse analysis”–that is to say, with a criticism and exposure of the limited nature of unions, collective bargaining and collective agreements.

Data on Which the Calculation Is Based

The calculation of the rate of exploitation is undoubtedly imperfect, and I invite the reader to correct its gaps. Nonetheless, the lack of any attempt to determine the rate of exploitation at the city level has undoubtedly reinforced social-reformist tendencies.

Now, the calculation:

In millions US dollars:

Sales $32,647
Costs and expenses $31,641

Cost of goods sold 28,207

Material $19,750
Direct labour 2,498
Overhead 5,959

Depreciation and amortization 1,366
Selling, general & administrative 1,587
Interest expense, net 86
Equity income (189)
Other expense, net 584
Income from operations before income taxes $1,006

[28,207+1,366+1,587+86+584=31,830; 31,830+1006=32,836; 32,836-189=32,647]

Adjustments

As I indicated in the 2019 post, a couple of adjustments are necessary.

Adjustment on Cost Side of Direct Labour and Corresponding Adjustment of Income  from Operations Before Taxes

I wrote in the 2019 post:

On page 37 [of the 2019 annual report], there is a reference to pension benefits. I assume that this category belongs to “direct labour” since it forms part of the deferred wages of workers that is paid in the current year (but then again, it is unclear whether the category of direct labour includes this, but since it is subtracted from net income, this leads me to believe that it is not included in that category). This should be added to direct labour. Hence, direct labour would be: 2,815+47=2,862, “Costs and expenses” would be $37, 255 “Costs of goods sold”would be $34,069, and “Income from operations before taxes” should be adjusted downward accordingly.

Now the 2020 “Pension and post-retirement benefits” is  (11).

This US $11 million should be added to “Cost and Expenses,” “Direct labour” and subtracted from “Income from operations before taxes.” Accordingly:

Temporarily Adjusted Costs and Expenses: $31,652
Temporary Adjusted Costs of Goods Sold: $28,218
Adjusted Direct Labour Costs: $2,509
Temporarily Adjusted income from operations before income taxes: $995

Adjustment of income from operations before income taxes due to interest expense, net

Another adjustment relates to interest. As I indicated in my post about the 2019 rate of exploitation of workers at Magna International:

An adjustment should probably be the treatment of the payment of interest: despite being an expense from the point of view of the individual capitalist, it probably forms part of the surplus value. It should be added to “Income before income tax expense.”

Accordingly, it is necessary to add $86 “Interest expense, net” to “Income from operations before income taxes” and subtract it from “Cost and expenses.”

(“Equity income” is already subtracted from costs since it is not really a cost at all but rather income.)

Adjusted Cost and Expenses $31,566
Adjusted Direct Labour $2,509
Adjusted income from operations before income taxes $1081

The Rate of Exploitation

So, with the adjustments in place: s=1081; v=2,509. The rate of exploitation or the rate of surplus value=s/v=1081/2,509=43%.

I will first consider this rate in relation to the workers in 2020, and then compare this rate with the 2019 rate of exploitation.

That means that for every hour worked that produces her/his wage, a worker at Magna International works around an additional 26 minutes for free for Magna International. Alternatively, in terms of money, $1 of wage or salary of a regular Magna International worker produces around $0.43 (43 cents) surplus value or profit for free.

The following provides information about the length of the working day:

  1. There are 3 shifts. 9 hours a shift.
  2. Typical 8 – 12 hours per shift.
  3. 8-12 hrs, 7 days a week, with very last minute overtime mandating, and i mean literally as your punching out theyll tell you that you have to stay for another 4+ hours. No work life balance and management could care less because theyre at home on the weekends. Better positions come with 100% more stress, more responsibilities that others pass off cause they dont want to do it, 1000s of strings attached and literally no way to avoid getting screwed by them. Constant harassment and belittling by management and engineers and if you report it, youre facing constant retaliation and impending termination. If your not part of the HR posse or the “good ol’ boys club”, youre nothing but a rug for them to walk across. So, if you value your sanity, health and family, this is not a place to work.
  4. I have been there for 3 years until i quit and half of the plant is doing either 10 or 12 hours 7 days a week
  5. Article 17 (page 51) of the collective agreement between Magna International and Unifor Local 2009AP: Employees normally work an eight-hour day, five days per week

Accordingly:

  1. In an 8-hour work day (480minutes), the worker produces her/his wage in 336 minutes (5 hours  36 minutes) and works 144 minutes (2 hours 24 minutes) for free for Magna International.
  2. In an 9-hour work day (540minutes), the worker produces her/his wage in 378 minutes (6  hours 18 minutes) and works 162 minutes (2 hours 42 minutes) for free for Magna International.
  3. In an 10-hour work day (600 minutes), the worker produces her/his wage in 420 minutes (7  hours) and works 180 minutes (3 hours) for free for Magna International.
  4. In an 12-hour work day (720 minutes), the worker produces her/his wage in 503 minutes (8  hours  23 minutes) and works 217 minutes (3 hours 37 minutes) for free for Magna International.

Comparison of the 2019 Rate of Exploitation with the 2020 Rate of Exploitation

2020: So, with the adjustments in place: s=1081; v=2,509. The rate of exploitation or the rate of surplus value=s/v=1081/2,509=43%.
2019: So, with the adjustments in place: s=2,258; v=2,862. The rate of exploitation or the rate of surplus value=s/v=2,258/2,862=79%.

The absolute decrease in s is substantial: 1,177, and the rate of decrease is 52% (1081-2,258)/2,258=-1,177/2,258).

By contrast, the absolute decrease in v is much less: 353, and the rate of decrease is (2509-2862)/=2509=-353/2862=12%.

Factors or Determinants of the Rate of Exploitation and Its Changes

Normally, when there is a change in the rate of exploitation, whether positive or negative, we should look at the general factors that govern the production of surplus value.  In general, there are three ways of changing the rate of exploitation:

  1. changing the real wage (the absolute amount and variety of commodities consumed by workers);
  2. changing the absolute amount of surplus value produced either by
    1. changing the length of the working day intensity of labour or
    2. changing the intensity of labour length of the working day
  3. changing (in fact, increasing) the relative amount of surplus value produced, generally through new technology, thereby decreasing the value of the commodities produced that form the real wage consumed by workers (with a fixed or constant working day and a constant amount of commodities consumed by workers, but with less labour time required to produce them, the amount of labour time required to reproduce the workers’ wages is reduced and more labour time constitutes surplus value).

As Ben Fine  and Alfredo Saad-Filho (2016) describe the factors with a view to increasing the rate of exploitation by employers in their book Marx’s Capital, pages 36-37:

Assume, now, that real wages remain unchanged. The rate of exploitation can be increased
in two ways….

First, e [the rate of exploitation[ can be increased through what Marx calls the production of absolute surplus value. On the basis of existing methods of production – that is, with commodity values remaining the same – the simplest way to do this is through the extension of the working day. …

There are other ways of producing absolute surplus value. For example, if work becomes more intense during a given working day, more labour will be performed in the same period, and absolute surplus value will be produced. The same result can be achieved through making work continuous, without breaks even for rest and refreshment. The production of absolute surplus value is often a by-product of technical change, because the
introduction of new machines, such as conveyors and, later, robots in the production line, also allows for the reorganisation of the labour process. This offers an excuse for the elimination of breaks or ‘pores’ in the working day that are sources of inefficiency for
the capitalists and, simultaneously, leads to increased control over the labour process (as well as greater labour intensity) and higher profitability, independently of the value changes brought about by the new machinery.

The desired pace of work could also be obtained through a crudely applied discipline. There may be constant supervision by middle management and penalties, even dismissal, or rewards for harder work (i.e. producing more value).

The above are general conditions for the determination of the rate of exploitation and its changes. The specific change observed in the rate of exploitation of workers at Magna International are unlikely due to these general conditions. Rather, the decrease in the rate of exploitation in 2020 relative to 2019 is likely due to the specific economic conditions that accompanied the pandemic.

One Possible Explanation for the Substantial Decrease in the Rate of Exploitation

Part of the explanation for the  substantial decrease in the rate of exploitation was probably the treatment of workers at Magna International, in part, as “fixed costs.”

Initially, Magna International laid off many of “its” workers, but it also sought to retain them by paying them additional money beyond that flowing from the government initially through federal  unemployment insurance (although it may have also been a function of provisions in the collective agreement concerning layoffs).

Magna International did lay off around 2,000 workers in Ontario during the initial wave of COVID. From https://lfpress.com/business/local-business/magna-cuts-production-2000-local-staff-amid-fallout-from-covid-19:

Magna cuts production, 2,000 local staff amid fallout from COVID-19

Magna, one of the largest automotive employers in the London region, has laid off about 2,000 workers locally as the fallout from the COVID-19 pandemic sweeps through the manufacturing sector.

Article content

Magna, one of the largest automotive employers in the London region, has laid off about 2,000 workers locally as the fallout from the COVID-19 pandemic sweeps through the manufacturing sector.

The Canadian auto parts giant has closed its two St. Thomas plants, Presstran and Formet, employing a combined 1,500 to 2,000, as well as Qualtech in London, which employs about 275.

“Both Formet and Presstran will be temporarily suspending operations today . . . Qualtech will also temporarily suspend its operations,” read a statement from Scott Worden of Magna’s corporate communications department.

“Magna is committed to both the health and financial well-being of our employees. We will be providing additional payments to employees beyond the minimums provided under the federal Employment Insurance program.”

The closings are not unexpected, and may not last long, as the Detroit Three automakers, Toyota and Honda have all closed plants for up to two weeks across North America as a result of the coronavirus.

Presstran is a stamping plant and Formet supplies several different parts to many automakers, including truck frames to GM plants in the U.S. Qualtech supplies seating systems.

“Magna continues to closely monitor developments related to coronavirus (COVID-19) with a focus on the health and safety of our employees and our operations. In addition, we are in daily communication with our customers, many of which have recently announced partial or full temporary production suspensions at plants in Europe and North America,” read an additional statement from Tracy Fuerst, vice-president of corporate communications at Magna.

The automaker said it will continue to follow World Health Organization protocol on cleaning the workplace and limiting contact with between people.

“We continue to assess our operations on an individual basis and are beginning to temporarily suspend manufacturing operations at a number of our manufacturing divisions around the world . . . many of our facilities are expected to suspend operations with production status re-evaluated week to week,” said Fuerst.

Further evidence for treating Magna International workers as fixed costs comes from Annual Information Form, Magna International Inc., March 25, 2021, page A-17:

Despite inevitable temporary layoffs of employees in light of the suspension of production during the first half of 2020, we took a number of steps to minimize the impact felt by our employees, including: maintaining employee benefits coverages through the temporary layoff period; …

We also engaged emergency government support programs primarily for employees to maintain compensation levels and/or benefits for a certain period, where applicable. The countries in which Magna engaged such programs included Canada, the United States, the United Kingdom, Germany, Austria and China. These programs allowed participating employees to remain on our payroll while inactive or furloughed due to mandatory stay at home orders, with Magna receiving full or partial reimbursement for such inactive labour.

The view that workers were treated more as fixed costs (probably out of fear that Magna International would lose such workers to other employers if they were not treated as fixed costs) is supported by the relatively limited decrease in v when compared to s.

Treating workers as “fixed costs” under the conditions of the pandemic is understandable since workers are not linked politically or legally to particular employers; they can work for another employer (if they can find another employer who will hire them). See Do Workers Work for a Particular Employer or for the Class of Employers? Part One: A Limitation of Some Radical Left Critiques of Capitalist Relations of Production and Exchange (A.K.A. Capitalism) and  Do Workers Work for a Particular Employer or for the Class of Employers? Part Two: Critique of Unions and the Social-Reformist or Social-Democratic Left).

This treatment of workers as fixed costs (to retain them over the short term) and the resulting decrease in the rate of exploitation is consistent with abnormal conditions that capitalist employers generally try to avoid since, on the one hand, they own means of production (c) that fail to absorb surplus value and, hire relatively more workers (v) than can be exploited under given conditions. From Karl Marx, Capital: A Critique of Political Economy. Volume 2, The Process of , page 111:

The point is simply that under all circumstances the part of the money that is spent on means of production – the means of production bought in M-mp [money used to purchase means of production, such as computers and other machines, raw material, buildings and other produced commodities necessary for labour to be performed] means of production – must be sufficient, i.e. must be reckoned up from the start and be provided in appropriate proportions. To put it another way, the means of production must be sufficient in mass to absorb the mass of labour which is to be turned into products through them. If sufficient means of production are not present, then the surplus lahour which the purchaser has at his disposal cannot be made use of; his right, to dispose of it will lead to nothing. If more means of production are available than disposable labour, then these remain unsaturated with labour, and are not transformed into products.

In effect, in terms of the pandemic, Magna International purchased too much labour power (the capacity to use the means of production and to produce value–a capacity sold by workers) and too many means of production. Not all of the labour power purchased could be exploited, and not all the means of production owned by Magna International could absorb labour and hence surplus labour and surplus value.

There may, of course, be other causes of the decrease in the rate of exploitation, such as problems pertaining to supply of inputs, but I will leave that issue aside.

It should be emphasized that the exploitation of workers pertains to the production of a surplus beyond the production of the value equivalent of their own costs of production. Even during the time the workers require to produce their wage, they are oppressed by employers since they are subject to the will of the employer (or her representatives) and to the control over their labour.

Conclusion

The rapid decrease in the rate of exploitation of workers of Magna International with the onset of the pandemic is likely due to the temporary) overinvestment in the purchase of labour power relative to the inability of management to use the means of production to exploit the workers. This situation will likely now call for an opposite pressure to increase exploitation directly through intensification and an extension of the working day and changes in technology and organization of the production process. Pressures to increase tax breaks for such capitalist employers (and corresponding reduction in state expenditures for welfare measures) may also arise. Of course, some workers will not just lay down and accept such counter-pressures.

Why is it that workers have to put up with this situation? Should they not be organizing not only to resist exploitation and oppression and increased pressures related to those phenomena but also to abolish such pressures? Not according to the social-democratic or social-reformist left. Such organizational efforts, for them, are undoubtedly unrealistic. New structures are supposedly to arise without criticizing the old structures.

Thus, for social democrats like Sam Gindin (former research director for the Canadian Auto Workers (CAW) (now Unifor), challenging the ideology of “decent jobs or work,” “fair contract,” “fair collective agreement,” “fair deal,” “fair wages” and other abstract phrases (rhetoric) is relatively unimportant. New material structures more relevant to the lives and experiences of working people are somehow to arise without constantly challenging the existing social structures–and the corresponding ideology that justifies such structures.

Frankly, I doubt that such new material structures will arise without a persistent and constant challenging of the ideological rhetoric rampant among the left in general and unions in particular.

Where is there evidence that Mr. Gindin has contributed to the creation of material structures that question the fundamental economic, political and social structures characteristic of a society dominated by a class power of employers by indulging in the beliefs of union reps? Does the organization Green Jobs Oshawa, to which Mr. Gindin contributes, do so? Where is the evidence that it does?

What are Mr. Gindin’s fellow social democrats like Herman Rosenfeld (who worked in the education department of the Canadian Auto Workers (CAW) (now Unifor) doing to fight against the exploitation of workers and oppression of Magna workers? Mr. Rosenfeld wrote an article, criticizing the existence, practically, of a company union at Magna, CAW Local 88, comparing it to the independent union Unifor Local 2009 AP. The independent union is certainly preferable to a company union, but even an independent union at the local level of a particular employer in effect assumes the legitimacy of the power of employers as a class (see my criticism in the post    Do Workers Work for a Particular Employer or for the Class of Employers? Part Two: Critique of Unions and the Social-Reformist or Social-Democratic Left).

The false nature of Mr. Gindin’s political position stands out when he claims the following:

Which brings me back to the point that the problem is not [Wayne] Dealy [union director for the Canadian Union of Public Employees (CUPE) Local 3902] or Sean [Smith,  Unifor Local 2002 Co-Ordinator and Toronto Airport Workers Council (TAWC) activist”] or others but OUR Collective inability to provide them with an effective alternative politics…They can be criticized but only if we do so with humility and part of criticizing ourselves. [my emphasis] 

Is there evidence that Mr. Gindin criticizes his own views? Are union reps (and union members) really conscious of the exploitative and oppressive nature of the class power of employers as such? If so, what are they doing about it? I fail to see evidence of it.

I also fail to see evidence of Mr. Gindin engaging in self-criticism. He implicitly assumes that he knows what workers need–and that is not an explicit and real consciousness of their exploitation and oppression–with or without unions, collective bargaining and collective agreements.

:

.

For Mr. Gindin, though, to question the “language” used by union reps, as well as the omission of any criticism of the limitations of collective bargaining and collective agreements, expresses merely “moralizing.”

I will leave Mr. Gindin with his fake humility and his fake self-criticism. I will continue to engage in “discourse analysis”–that is to say, with a criticism and exposure of the limited nature of unions, collective bargaining and collective agreements.

.

The Rate of Exploitation of Workers at Bell Canada Enterprises (BCE), One of the Largest Private Employers in Toronto

Introduction

In two others posts I presented the twenty largest employers in Toronto according to level of employment (see A Short List of the Largest Employers in Toronto, Ontario, Canada) and the twenty largest employers in Canada according to profit (see A Short List of the Largest Private Employers in Canada, According to Profit).

I have tried to calculate the rate of exploitation of workers of Magna International in an earlier post (see The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One); Magna International is one of the largest employers in Toronto. I also calculated the rate of exploitation for Air Canada workers and the Canadian Imperial Bank of Commerce (CIBC) workers. 

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies in Toronto and Canada if they are available in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.

Adjusted Net Income: 5587.3=s
Adjusted Total labour Costs: 5611.7=v

The rate of exploitation or the rate of surplus value=s/v=5587.3/5611.7=100% (after rounding).

That means that for every hour worked that produces her/his wage, a worker at BCE works around an additional hour for free for BCE. Alternatively, in terms of money, $1 of wage or salary of a regular BCE worker produces around $1 surplus value or profit for free. 

In terms of varying lengths of the working day: 

  1. In a 7.5-hour work day (450 minutes), the worker produces her/his wage in 225 minutes (3 hours  45 minutes) and works 225 minutes (3 hours 45 minutes) for free for BCE.
  2. In an 8-hour work day (480 minutes), the worker producer her/his wage in 240 minutes (4 hours) and works 240 minutes (4 hours) for free for BCE.
  3. In a 10-hour work day (600 minutes), the worker producers her/his wage in 300 minutes (5 hours) and works 300 minutes (5 hours) for free for BCE.
  4. In a 12-hour work day (720 minutes), the worker produces her/his wage in 360 minutes (6 hours) and works 360 minutes (6 hours) for free for BCE.

Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is also unfree during that time (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation and   Employers as Dictators, Part One).

Do you think that these facts contradict the talk by the left and unionists of “fair wages,” “fair contracts” (see  Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One for the rhetoric of the largest union in Canada, the Canadian Union of Public Employees (CUPE)) and “decent work?” Do they ignore the reality of life for workers, whether unionized or non-unionized? If exploitation and oppression of workers is a constant in their lives, even if they are only vaguely aware of it, should this situation not be frankly acknowledged by their representatives? Do such representatives do so? If not, why not?  Do workers deserve better than neglecting the social context within which they live and work? Should such problems be addressed head on rather than neglected? 

Even if workers were not exploited, they would still be oppressed since they are used as things (means) for purposes which they as a collectivity do not define (see The Money Circuit of Capital). Does that express something fair? Management rights clauses (implied or explicit in collective agreements give management as representative of employers–and as a minority–the power to dictate to workers what to do, when to do it, how to do it and so forth–and is not the imposition of the will of a minority over the majority a dictatorship? (See  Employers as Dictators, Part One). Is that fair? Do union reps ever explain how a collective agreement somehow expresses something fair? Is that fair?

Is the following an example of what union reps mean by a “fair contract?”

COLLECTIVE AGREEMENT
BETWEEN
UNIFOR
AND
BELL CANADA

CRAFT AND SERVICES EMPLOYEES
EFFECTIVE FEBRUARY 23, 2017 

ARTICLE 8 – MANAGEMENT RIGHTS

8.01 The Company has the exclusive right and power to manage its operations in all respects and in accordance with its commitments and responsibilities to the public, to conduct its business efficiently and to direct the working forces and without limiting the generality of the foregoing, it has the exclusive right and power to hire, promote, transfer, demote or lay-off employees, and to suspend, dismiss or otherwise discipline employees.

8.02 The Company agrees that any exercise of these rights and powers shall not contravene the provisions of this Agreement.

Should workers not be discussing why management has these rights? Should workers not be discussing whether an unelected management should have such rights? Should workers not be discussing how to organize to abolish this dictatorship? Should workers not be criticizing any union rep who claims that a collective agreement somehow expresses a “fair contract?” A “good contract?” All other such platitudes? 

Data on Which the Calculation Is Based

The calculation of the rate of exploitation is undoubtedly imperfect, and I invite the reader to correct its gaps. Nonetheless, the lack of any attempt to determine the rate of exploitation at the city level has undoubtedly reinforced social-reformist tendencies.

Now, the calculation: 

In millions of Canadian dollars:

Page 113:

Operating revenues 23,964

Costs
Operating costs 13,858
Severance, acquisition and other costs 114
Depreciation 3,496
Amortization 902
Finance costs
Interest expense 1,132
Interest on post-employment benefit obligations 63
Other expense 13
Total costs: 19,578

Net income: 4386 [23,964-19,578=4386] [the 3253 is after taxes; if you add taxes, you get 4386 as well]

Operating costs need to be broken down further since costs for maintaining workers as wage workers form one of the two considerations for the calculation of the rate of exploitation.

Labour costs
Wages, salaries and related taxes and benefits 4,303
Post-employment benefit plans service cost (net of capitalized amounts) 247
Other labour costs 1,005
Less:
Capitalized labour 1,032
Total labour costs: 4,523

Adjustments

In Marxian theory, it is necessary to question whether some expenses are expenses for both the individual employer and for the class of employers (and fractions of their class, such as those who live on interest); in such a case, the expense is deducted from total revenue. On the other hand, there are expenses that are expenses for the individual employer but are not expenses when looked at from the point of view of the class of employers; in such an instance, they are paid out from the surplus value produced or obtained by workers and are to be included in income before taxes.

Adjustment of Total Labour Costs

Capitalized Labour

It is necessary to consider the category “Capitalized labour” since it is not treated as a labour cost by BCE whereas here it will be so treated. Capitalized labour involves the following:

CAPITALIZED LABOR means all direct costs of labor that can be identified or associated with and are properly allocable to the construction, modification, or installation of specific items of capital assets and, as such, can thereby be written down over time via a depreciation or amortization schedule as capitalized. 

I have chosen to treat capitalized labour as part of labour costs since it is current labour that is involved in the operations of BCE; the work performed by workers in installing and assembling machinery includes surplus value.

Temporarily Adjusted Total labour Costs: 5555

Severance, acquisition and other costs

It is necessary to make adjustments for this category since part of the money expended relates to costs destined to be received by workers. To take this into account, it is necessary to break the category down further.

Severance 63
Acquisition and other 51
Total severance, acquisition and other costs 114

I assume that “Acquisition and other” are non-labour expenses.
In a note, it states:

Severance costs consist of charges related to involuntary and voluntary employee terminations. In 2018, severance costs include a 4% reduction in management workforce across BCE.

Given that the severance package for management is likely to be much higher than for regular employees, the 4 percent reduction in the management workforce likely results in a higher percentage of severance pay to that 4 percent. It is impossible to determine with precision how much higher. I will assume 10 percent. The reason for taking into consideration such a difference is that the severance for management is likely to be a function of its exploitation of other workers and not its own exploitation.

Ten percent of 63 is 6.3; therefore, this 6.3 needs to be added to net income and subtracted from 63.
Temporarily adjusted Net income: 4392.3

This shift from considering part of severance pay from a cost to a part of net income also changes the total costs by reducing it by 6.3. Therefore:

Temporarily adjusted Total Costs: 19,571.7

The remaining severance is 56.7. This needs to be added to the category “Post-employment benefit plans service cost” since it forms part of the income of workers and costs for BCE. Accordingly:
Adjusted Total labour Costs: 5611.7

Adjustment of Finance Costs

Another adjustment relates to interest. As I indicated in my post about the rate of exploitation of workers at Magna International:

An adjustment should probably be the treatment of the payment of interest: despite being an expense from the point of view of the individual capitalist, it probably forms part of the surplus value. It should be added to “Income before income tax expense.”

As for the category “Interest on post-employment benefit obligations,” from the point of view of BCE, it is an expense or cost because, presumably, BCE had to borrow money (and pay interest) to meet its financial obligations to its retired workers; this interest comes from the surplus value produced by the workers and is therefore included as part of profit.

Accordingly, both “Interest expense” and “Interest on post-employment benefit obligations” are deducted from “Total costs” and added to “Net income,” and “Total costs” are therefore also adjusted.

Operating revenues 23,964
Adjusted Total Costs: 19,571.7- 1,132 – 63=18,376.7
Adjusted Net Income: 5587.3=s
Adjusted Total labour Costs: 5611.7=v

The Rate of Exploitation

The rate of exploitation or the rate of surplus value=s/v=5587.3/5611.7=100% (after rounding).

That means that for every hour worked that produces her/his wage, a worker at BCE works around an additional hour for free for BCE. Alternatively, in terms of money, $1 of wage or salary of a regular BCE worker produces around $1 surplus value or profit for free. 

The length of the working day at BCE, like most places, varies. Here are a sample of working days from the Internet:

I worked, on average, twelve hours a day.
I worked about 8 hours a day on the average.
10 hours per and about 50 hours weekly and was paid for only 37.5 weekly.

The collective agreement between Bell Canada and Unifor Atlantic CommunicationLocals (Unifor ACL) states: 

(c) Employees whose standard hours of work are eighty (80) hours in a scheduling period, will normally work either ten (10) scheduled tours of eight (8) hours. Employees whose standard hours of work are seventy-five (75) hours in a scheduling period, will normally work ten (10) scheduled tours of seven and one-half (7.5) hours. …

(d) Tours can be scheduled for a maximum of ten (10) hours with mutual agreement between the employee and their direct supervisor.

(e) Longer tours, to a maximum of twelve (12) hours per tour, may be scheduled with the mutual agreement of the employee(s), their direct supervisor, Labour Relations and the Council. Such special
arrangements must be committed to in writing and signed by the parties prior to implementing. These arrangements can be cancelled by any party with eight (8) weeks notice.

Since Bell workers are exploited 100 percent, the calculation of the number of hours they work to produce the equivalent value of their wage and the number of hours they work for free for Bell is relatively easy.

  1. In a 7.5-hour work day (450 minutes), the worker produces her/his wage in 225 minutes (3 hours  45 minutes) and works 225 minutes (3 hours 45 minutes) for free for BCE.
  2. In an 8-hour work day (480 minutes), the worker producer her/his wage in 240 minutes (4 hours) and works 240 minutes (4 hours) for free for BCE.
  3. In a 10-hour work day (600 minutes), the worker producers her/his wage in 300 minutes (5 hours) and works 300 minutes (5 hours) for free for BCE.
  4. In a 12-hour work day (720 minutes), the worker produces her/his wage in 360 minutes (6 hours) and works 360 minutes (6 hours) for free for BCE.


The Rate of Exploitation of Workers at ScotiaBank (Bank of Nova Scotia)

Introduction

In two others posts I presented the twenty largest employers in Toronto according to level of employment (see A Short List of the Largest Employers in Toronto, Ontario, Canada) and the twenty largest employers in Canada according to profit (see A Short List of the Largest Private Employers in Canada, According to Profit). The largest employer, in terms of employment, is the Canadian Imperial Bank of Commerce.

I have tried to calculate the rate of exploitation of workers of Magna International in an earlier post (see The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One); Magna International is one of the largest employers in Toronto.

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies in Toronto and Canada if they are available in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.

We have the following:

Adjusted Income before income taxes $11,724=s
Adjusted Total salaries and total benefits $7,989=v

The rate of exploitation or the rate of surplus value is s/v; therefore, s/v is 11,724/7,989=147 percent.

This means that, in terms of money, $1 of wage or salary of a regular bank worker results in $1.47 Canadian dollars surplus value or profit for free. Alternatively, for every hour worked, a Scotiabank worker works 88 minutes (or 1 hour 28 minutes) for Scotiabank for free.

I will calculate the rate of exploitation or the rate of surplus value for each approximate variation of the length of the working day (a more detailed explanation of how to calculate the rate of exploitation is provided in the post  The Rate of Exploitation of the Workers of the Canadian Imperial Bank of Commerce (CIBC), One of the Largest Private Employers in Toronto and in Canada).

  1. 7-hour work day: Scotiabank workers spend  170 minutes (2 hours 50 minutes)  to obtain their wage for the day, and they spend 250 minutes (4 hours 10 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  2. 7.5-hour work day: Scotiabank workers spend 182 minutes (3 hours 2 minutes) to obtain their wage for the day, and they spend 268 minutes (4 hours 28 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  3. 8-hour work day: Scotiabank workers spend 194 minutes (3 hours 14 minutes) to obtain their wage for the day, and they spend 286 minutes (4 hours 46 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  4. 9-hour work day: Scotiabank workers spend 219 minutes (3 hours 39 minutes) to obtain their wage for the day, and they spend 321 minutes (5 hours 21 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  5. 9.5 hour work day (to cover a 47.5 hour work week spread out in five days): Scotiabank workers spend 231 minutes (3 hours 51 minutes0 to obtain their wage for the day, and they spend 339 minutes (5 hours 39 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  6. 12-hour work day: Scotiabank workers spend 291 minutes (4 hours 51 minutes) to obtain their wage for the day, and they spend 429 minutes (7 hours 9 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  7. 15-hour work day: Scotiabank workers spend 364 minutes (6 hours 4 minutes) to obtain their wage for the day, and they spend 536 minutes (8 hours 56 minutes( in obtaining a surplus value or profit for free for Scotiabank.

Scotiabank workers do not belong to a union. Would their becoming unionized turn their situation into one where they had a “fair contract” and “decent work?” I think not. Unions can limit exploitation and can control some aspects of their working lives, but in principle workers are things to be used by employers even with unions. This does not mean that a non-unionized environment is the same as a unionized environment. With unions that are independent of particular employers, that is to say, are real unions, there is an opportunity for workers to develop organizations of resistance against the power of particular employers.

The ideology of unions–that somehow they can produce a “fair contract” and “decent work”–needs, though, to be constantly criticized. Workers deserve better than the acceptance of such ideology by the left.

Data on Which the Calculation Is Based

Now, the calculation:

In millions of Canadian dollars:

2019

Revenue

Interest income

Loans $ 29,116
Securities 2,238
Securities purchased under resale agreements and securities borrowed 502
Deposits with financial institutions 928

Total interest income: 32,784

Expenses

Interest expense

Deposits $13,871
Subordinated debentures  294
Other 1,442

Total interest expense: 15,607

Net interest income 17,177

Non–interest income 

Card revenues 977
Banking services fees 1,812
Credit fees 1,316
Mutual funds 1,849
Brokerage fees 876
Investment management and trust 1,050
Underwriting and other advisory 497
Non-trading foreign exchange 667
Trading revenues 1,488
Net gain on sale of investment securities  351
Net income from investments in associated corporations 650
Insurance underwriting income, net of claims 676
Other fees and commissions 949
Other 699

Total non-interest income: 13,857
Total revenue 31,034

Provision for credit losses 3,027
[Net Revenue]: 28,007

Non-interest expenses

Salaries and employee benefits 8,443
Premises and technology 2,807
Depreciation and amortization 1,053
Communications 459
Advertising and business development 625
Professional 861
Business and capital taxes 515
Other 1,974

Total non-interest expenses: 16,737

Income before taxes 11,270

Adjustments

In Marxian theory, it is necessary to question whether some expenses are expenses for both the individual employer and for the class of employers (and fractions of their class, such as those who live on interest); in such a case, the expense is deducted from total revenue. On the other hand, there are expenses that are expenses for the individual employer but are not expenses when looked at from the point of view of the class of employers; in such an instance, they are paid out from the surplus value produced or obtained by workers and are to be included in income before taxes.

In the category “Salaries and employee benefits,” there are the subcategories “Performance-based compensation” and “Share-based payments.”

Salaries and employee benefits
Salaries $ 4,939
Performance-based compensation 1,761
Share-based payments 278
Other employee benefits 1,465
$ 8,443

There is a table titled “Compensation of key management personnel” in the annual report that is relevant. This category covers the following employees:

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Bank, directly or indirectly, and comprise the directors of the Bank, the President and Chief Executive Officer, certain direct reports of the President and
Chief Executive Officer and Group Heads.

The table is as follows:

Compensation of the Bank key management personnel

For the year ended October 31 ($ millions) 2019
Salaries and cash incentives  $17
Equity-based payment  $25
Pension and other benefits 5
Total $47

It should be noted that this table refers only to the end of October 31 as does all the information above since the fiscal year for Scotiabank ends on October 31.

This more detailed information does not influence my decision to include the whole category of “Share-based payments” to the category of surplus value rather than to “Salaries.”  The CEO of Scotiabank, Brain Porter, plus five other senior executives, received a total compensation of over $29 million. It is likely that “Share-based payments” are allocated according to the level of pressure on subordinates to perform (including organizational  and policy decisions to ensure such pressure is effective); such payments likely are received by senior and middle (and, perhaps, lower management) based on performance targets that they either set or force subordinates to achieve.

This situation is somewhat similar to the calculations I made for the Royal Bank of Canada workers.

This means that “Salaries and benefits” is reduced by $278 million and the category “Income before income taxes” is increased by $278 million.

I also assume that 10 percent of the amount of the category “Performance-based compensation” is actually surplus value and not salaries that are due to actual work. In other words, some of “performance-based compensation” is due to management obliging workers to work at a certain level (and some of it is due to the workers themselves working at a certain level of intensity in order to receive some form of performance compensation).

My logic is the same as my calculation in some other banks (such as the CIBC), where I wrote:

However, the gap between executive pay and the pay of regular employees has widened over the years, so it is reasonable to infer that the category “Performance-based compensation” is divided into two parts: one part is a function of the number of hours worked by regular employees as well as the intensity of that work; the other is based on the extent to which bank managers and senior executives are successful in exploiting those regular employees. …

it is probably reasonable to assume that a minimum of 10 percent of the “Performance-based compensation” comes from the exploitation of senior bank executives of regular workers.
It would be necessary to have more detailed information to determine whether more or less of the money obtained in this category were distributed between regular bank workers and management executives. If regular bank workers received more, then the rate of exploitation would be less than the rate calculated below. If management executives received more, then the rate of exploitation would be more than the rate calculated below.

On the assumption of 10 percent, though, this means that 10 percent of the total of “Performance-based compensation, ” is reduced by 10 percent.

It also means that this 10 percent ($176 million) is allocated to the category “Income before taxes.”

Adjusted Results

Adjusted Income before income taxes $11,724=s
Adjusted Total salaries and total benefits $7,989=v

The Rate of Exploitation of Scotiabank Workers

The rate of exploitation or the rate of surplus value is s/v; therefore, s/v is 11,724/7,989=147 percent.

This means that, in terms of money, $1 of wage or salary of a regular bank worker results in $1.47 Canadian dollars surplus value or profit for free. Alternatively, for every hour worked, a Scotiabank worker works 88 minutes (or 1 hour 28 minutes) for Scotiabank for free.

The length of the working day varies. To the question: “On average, how many hours do you work a day at Scotiabank?,” the answers were:

  1. 8 to 9 hrs per day.
  2. 8 hours and 30 mins
  3. 8 hours a day from Monday to Friday with 1 hour for lunch
  4. 48 hours a week
  5. 9 Am to 6 pm
  6. Depends on department , some are typical 8:30-5 while others such require much longer hours,up to 12-15 hours per day
  7. 37.5 hrs per week

I will calculate the rate of exploitation or the rate of surplus value for each approximate variation of the length of the working day (a more detailed explanation of how to calculate the rate of exploitation is provided in the post The Rate of Exploitation of the Workers of the Canadian Imperial Bank of Commerce (CIBC), One of the Largest Private Employers in Toronto and in Canada).

  1. 7-hour work day: Scotiabank workers spend  170 minutes (2 hours 50 minutes)  to obtain their wage for the day, and they spend 250 minutes (4 hours 10 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  2. 7.5-hour work day: Scotiabank workers spend 182 minutes (3 hours 2 minutes) to obtain their wage for the day, and they spend 268 minutes (4 hours 28 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  3. 8-hour work day: Scotiabank workers spend 194 minutes (3 hours 14 minutes) to obtain their wage for the day, and they spend 286 minutes (4 hours 46 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  4. 9-hour work day: Scotiabank workers spend 219 minutes (3 hours 39 minutes) to obtain their wage for the day, and they spend 321 minutes (5 hours 21 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  5. 9.5 hour work day (to cover a 47.5 hour work week spread out in five days): Scotiabank workers spend 231 minutes (3 hours 51 minutes0 to obtain their wage for the day, and they spend 339 minutes (5 hours 39 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  6. 12-hour work day: Scotiabank workers spend 291 minutes (4 hours 51 minutes) to obtain their wage for the day, and they spend 429 minutes (7 hours 9 minutes) in obtaining a surplus value or profit for free for Scotiabank.
  7. 15-hour work day: Scotiabank workers spend 364 minutes (6 hours 4 minutes) to obtain their wage for the day, and they spend 536 minutes (8 hours 56 minutes( in obtaining a surplus value or profit for free for Scotiabank.

It should be noted that I have used the verb “obtain” rather than “produce.” In Marxian economics, bank workers, as well as sales workers do not produce surplus value but rather transfer the surplus value already produced. This does not mean that these workers are not exploited capitalistically; they are used impersonally by the employer to obtain surplus value and a profit. Furthermore, things produced by others are used by employers such as Scotiabank to control their working lives in order to obtain surplus value or profit.

Scotiabank workers do not belong to a union. Would their becoming unionized turn their situation into one where they had a “fair contract” and “decent work?” I think not. Unions can limit exploitation and can control some aspects of their working lives, but in principle workers are things to be used by employers even with unions. This does not mean that a non-unionized environment is the same as a unionized environment. With unions that are independent of particular employers, that is to say, are real unions, there is an opportunity for workers to develop organizations of resistance against the power of particular employers.

The ideology of unions–that somehow they can produce a “fair contract” and “decent work”–needs, though, to be constantly criticized. Workers deserve better than the acceptance of such ideology by the left.

The Rate of Exploitation of the Workers of the Bank of Montreal (BMO), One of the Largest Private Employers in Canada

Introduction

In two others posts I presented the twenty largest employers in Toronto according to level of employment (see A Short List of the Largest Employers in Toronto, Ontario, Canada) and the twenty largest employers in Canada according to profit (see A Short List of the Largest Private Employers in Canada, According to Profit).

I have tried to calculate the rate of exploitation of workers of Magna International in an earlier post (see The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One); Magna International is one of the largest employers in Toronto as well as the rate of exploitation of workers at the Canadian Imperial Bank of Commerce (CIBC) (see ???).

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies in Toronto if they are available in order to calculate the rate of exploitation at a more local level.

The lack of any attempt to determine the rate of exploitation at the city level by has undoubtedly reinforced social-reformist tendencies.

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.

The rate of exploitation or the rate of surplus value of Bank of Montreal workers is s/v; therefore, s/v is 7,533/8,162=92 percent.

This means that, in terms of money, $1 of wage or salary of a regular bank worker results in $0.92 cn surplus value or profit for free (calculated on the basis of the procedure outlined in the post on the rate of exploitation of Canadian Imperial Bank of Commerce bank workers). Alternatively, for every hour worked, a Bank of Montreal worker works 55 minutes for free for the Bank of Montreal.

It also means the following:

Data on Which the Calculation Is Based

The calculation of the rate of exploitation is undoubtedly imperfect, and I invite the reader to correct its gaps.

In millions of Canadian dollars:

Page 18:

Summary Income Statement
Income
Net interest income $12,888
Non-interest revenue $12,595
Revenue $25,483 [add the first two]
Insurance claims, commissions and changes in policy benefit liabilities (CCPB) $2,709
Revenue, net of CCPB $22,774 [subtract $25 483 by $2 709]

Expenses
Provision for (recovery of) credit losses on impaired loans $751
Provision for (recovery of) credit losses on performing loans $121
Total provision for credit losses $872 [add the last two]
Non-interest expense $14,630
Total expenses $15,502

Net income $7272 ($22,774-$15,502)

Adjustments

In Marxian theory, it is necessary to question whether some expenses are expenses for both the individual employer and for the class of employers (and fractions of their class, such as those who live on interest); in such a case, the expense is deducted from total revenue. On the other hand, there are expenses that are expenses for the individual employer but are not expenses when looked at from the point of view of the class of employers; in such an instance, they are paid out from the surplus value produced or obtained by workers and are to be included in income before taxes.

In the annual report, the category of “Non-interest expense” is subtracted from total revenue, to yield the category “Net income.” However, to calculate the rate of exploitation according to the principles of Marxian economics, it is necessary to make certain adjustments. To that end, we need to look in more detail at the category “Non-interest expense.”

Non-Interest Expense
(Canadian $ in millions)
Employee compensation
Salaries $4,762
Performance-based compensation $2,610
Employee benefits $1,051
Total employee compensation 8,423
Premises and equipment 2,988
Other 2,665
Amortization of intangible assets 554
Total non-interest expense 14,630

As in other posts on the rate of exploitation in Canadian banks, the category “Performance-based compensation” causes some problems, which requires adjustments. It appears that most employees receive some kind of bonus based on performance. One site indicates the following:

BMO – Bank of Montreal pays an average of C$4,459 in annual employee bonuses. Bonus pay at BMO – Bank of Montreal ranges from C$993 to C$9,500 annually among employees who report receiving a bonus. Employees with the title Branch Manager, Banking earn the highest bonuses with an average annual bonus of C$9,500. Employees with the title Customer Service Representative (CSR) earn the lowest bonuses with an average annual bonus of C$993.

On the other hand, according to the Bank of Montreal Proxy Circular, all executives receive short-term incentives based on performance, senior executives receive mid-term incentives based on performance, and senior vice-presidents and above receive long-term incentives based on performance.

As I argued in my post about the rate of exploitation of Canadian Imperial Bank of Commerce workers:

However, the gap between executive pay and the pay of regular employees has widened over the years, so it is reasonable to infer that the category “Performance-based compensation” is divided into two parts: one part is a function of the number of hours worked by regular employees as well as the intensity of that work; the other is based on the extent to which bank managers and senior executives are successful in exploiting those regular employees. …

it is probably reasonable to assume that a minimum of 10 percent of the “Performance-based compensation” comes from the exploitation of senior bank executives of regular workers.
It would be necessary to have more detailed information to determine whether more or less of the money obtained in this category were distributed between regular bank workers and management executives. If regular bank workers received more, then the rate of exploitation would be less than the rate calculated below. If management executives received more, then the rate of exploitation would be more than the rate calculated below.

On the assumption of 10 percent, though, this means that 10 percent of the total of “Performance-based compensation, ” is reduced by 10 percent.

Adjusted Results

This 10 percent reduction in Performance-based compensation results in a reduction in total employee compensation” by $261,000,000 and an increase in net income by the same amount. This adjustment yields the following accounts:

Adjusted net income $7,533 (this represents surplus value or s)
Adjusted total employee compensation $8,162 (this represents variable capital or v)

The Rate of Exploitation of Bank of Montreal Workers

The rate of exploitation or the rate of surplus value of Bank of Montreal workers is s/v; therefore, s/v is 7,533/8,162=92 percent.

This means that, in terms of money, $1 of wage or salary of a regular bank worker results in $0.92 cn surplus value or profit for free (calculated on the basis of the procedure outlined in the post on the rate of exploitation of Canadian Imperial Bank of Commerce bank workers). Alternatively, for every hour worked, a Bank of Montreal worker works 55 minutes for free for the Bank of Montreal.

According to a few people who have worked at the Bank of Montreal, the length of the working day is the following (it is unclear whether lunch is included and unpaid or not]:

  • Eight thirty to four thirty [8-hour working day]
  • Working hours are steady. 8:45-5:15 everyday Monday to Friday [8.5-hour working day]
  • The bank has a 7.5 hours work day and is a 9am – 5pm environment. However, the bank has flexibility to accommodate your commuting schedule. [8-hour working day]
  • At that time i think they were M-W 10-3, T&F 10-8 and Sat. 10-4 [average of 410 minutes, or 6 hours 50 minutes, or 6.8 hours]
  • The Hours of what I work is 8:00am to 4:30pm [8.5 hours]
  • 9 hours, sometimes up to 12, but hours can be cut any time
  • 9.5 but paid for 7.5 often losing breaks due to lose of break time as others underperformed and I had to pick up the slack… regularly.
  • 7.5 hours per day
  • The hours were fixed at 8 hours a day. However, working days were flexible along with more shifts.

I will calculate the division of the working day from the shortest to the longest in the above quotes accordingly. I use minutes rather than hours.

  1. For a 6.8-hour working day (410 minutes), BMO workers spend 214 minutes (3 hours 34 minutes) to obtain their wage for the day, and they spend 196 minutes (3 hours 16 minutes) in obtaining a surplus value or profit for BMO.
  2. For a 7.5-hour working day (450 minutes), BMO workers spend 234 minutes (3 hours 54 minutes) to obtain their wage for the day, and they spend 216 minutes (3 hours 36 minutes) in obtaining a surplus value or profit for BMO.
  3. For an 8-hour working day (480 minutes), BMO workers spend 250 minutes (4 hours 10 minutes) to obtain their wage for the day, and they spend 230 minutes (3 hours 50 minutes) in obtaining a surplus value or profit for BMO.
  4. For an 8.5- hour working day (510 minutes), BMO workers spend 266 minutes (4 hours 26 minutes) to obtain their wage for the day, and they spend 244 minutes (4 hours 4 minutes) in obtaining a surplus value or profit for BMO.
  5. For a 9-hour working day (540 minutes), BMO workers spend 281 minutes (4 hours 41 minutes) to obtain their wage for the day, and they spend 259 minutes (4 hours 19 minutes) in obtaining a surplus value or profit for BMO.
  6. For a 9.5-hour working day (570 minutes), BMO workers spend 297 minutes (4 hours 57 minutes) to obtain their wage for the day, and they spend 273 minutes (4 hours 33 minutes) in obtaining a surplus value or profit for BMO.
  7. For a 12-hour working day (720 minutes), BMO workers spend 375 minutes (6 hours 15 minutes) to obtain their wage for the day, and they spend 345 minutes (5 hours 45 minutes) in obtaining a surplus value or profit for BMO.

It should be noted that I have used the verb “obtain” rather than “produce.” In Marxian economics, bank workers, as well as sales workers do not produce surplus value but rather transfer the surplus value already produced. This does not mean that these workers are not exploited capitalistically; they are used impersonally by the employer to obtain surplus value and a profit. Furthermore, things produced by others are used by employers such as Bank of Montreal to control their working lives in order to obtain surplus value or profit.

Bank of Montreal workers do not belong to a union. Would their becoming unionized turn their situation into one where they had a “fair contract” and “decent work?” I think not. Unions can limit exploitation and can control some aspects of their working lives, but in principle workers are things to be used by employers even with unions. This does not mean that a non-unionized environment is the same as a unionized environment. With unions that are independent of particular employers, that is to say, are real unions, there is an opportunity for workers to develop organizations of resistance against the power of particular employers.

The ideology of unions–that somehow they can produce a “fair contract” and “decent work”–needs, though, to be constantly criticized. Workers deserve better than the acceptance of such ideology by the left.

Critique of the Limited Aim (Solution)–Decent Wages–of a Radical Social Democrat: The Case of the Toronto Radical, John Clarke: Part One

Introduction

There are some people among the social-democratic left whom I can respect more than others. John Clarke, former leader of the Ontario Coalition Against Poverty (OCAP), is one of them. Here is what one reads on Wikipedia about him:

John Clarke is an anti-poverty activist who lives in TorontoOntarioCanada. As of 2019, he was teaching at York University.

Activism

A native of Britain, he moved to Toronto, Ontario and became an organizer there.[1] He was a leading figure of the Ontario Coalition Against Poverty (OCAP) group until he retired from it in January 2019.[2] The Globe and Mail reported in the year 2000 that Clarke’s “guerrilla activism has pitted him against police countless times during the past decade.”[3]

Clarke was arrested with three other activists and charged with inciting a riot for his role in an OCAP protest at Queen’s park in June 2000. Clarke appealed his restrictive bail conditions in August 2000.[3] In 2003, a judge stayed the charges and Clarke walked free.[4]

The Sudbury Star described Clarke in 2016 as “a 25-year veteran of activism.”[1] In 2019, he announced an online fundraiser asking people to contribute $25,000 for his retirement.[5]

Teaching

In 2019, Clarke took on the post of Packer Visitor in Social Justice in the faculty of Liberal Arts and Professional Studies at York University. The position is for two years.[2]

References

  1. Jump up to:ab Keenan Kusan, Workers being held down, activist says in SudburySudbury Star (March 26, 2016).
  2. Jump up to:ab Levy, Sue-Ann (26 November 2019). “Poverty warrior teaching Activism 101 at York University”Toronto Sun. Retrieved 21 March 2020.
  3. Jump up to:ab Margaret Philp, Activist to fight bail termsGlobe & Mail (August 10, 2000).
  4. ^ Clarke, John (28 October 2003). “RIOT CHARGES AGAINST OCAP ORGANIZER STAYED BY TRIAL JUDGE – Statement by John Clarke, OCAP Organizer”OCAP. Archived from the original on 1 June 2005. Retrieved 21 March 2020.
  5. ^ Levy, Sue-Ann (28 January 2019). “Poverty activist John Clarke wants help funding retirement”Toronto Sun. Retrieved 21 March 2020.

Although I can admire not only Mr. Clarke’s activist stance but his willingness to engage in civil disobedience despite the possible consequences for himself, his writings persistently fall short of a socialist stance. This limitation is evident in his aims (which are, generally, solutions to specific problems). 

The Aim or Goal of His Intervention 

What is the aim or goal of his intervention? What is he seeking to achieve?

On Mr. Clarke’s blog, on June 15, 2021, he has written a post titled “A Basic Income in Waiting?” (https://johnclarkeblog.com/node/65). 

Surprisingly, Mr. Clarke’s goals are very similar if not identical to those of  Simran Dhunna and David Bush’s views.  He writes:

During the pandemic, struggles have broken out across the world, from Minneapolis to New Delhi to East Jerusalem. As the global health crisis subsides, there will be a strong determination to fight for something better. As we challenge, not just the ‘economic scarring’ left by the pandemic, but the impact of decades of austerity, we shouldn’t settle for a commodified form of social provision that makes its peace with the neoliberal order. We need to fight employers to win decent wages and to take to the streets to demand massively expanded social housing, greatly improved public healthcare, free public transit, universal child care and much else beside.

His reference to “much else beside” is in reference to an article written by Ms. Dhunna and Mr. Bush (if you click on the the “else beside,” you will be taken to their article). The “much else beside” probably refers to the following list (the social-democratic or reformist left frequently have a grocery list of demands that rarely if ever are realized in practice since they lack the power to realize them):

  1. free dental care
  2. strengthening and regularizing the new changes to EI (employment insurance–which I still call unemployment insurance)
  3. raising social assistance rates
  4. status for all (meaning presumably that immigrants and “illegal” migrants would have the same legal rights as Canadian citizens)
  5. paid sick days
  6. improving tenants’ rights
  7. universal public services.

Of course, I support such efforts, but such efforts hardly make a socialist society since they are likely compatible with some form of capitalism and not with its abolition and with the abolition of all classes; they seek to humanize capitalism and not abolish it. Those who advocate such policies are anti-neoliberal but not necessarily anti-capitalist. To be anti-capitalist, such policies would have to be linked to other policies that push beyond what is acceptable to a capitalist society–such as a radical or robust basic income–which Mr. Clarke opposes. 

I have criticized Dhunna and Bush’s article in several posts on this blog (see for example A Basic Income Versus the Expansion of Public Services? Part One: Critique of the Social-democratic Idea that the Expansion of Public Services is SocialistThe Strawman of a Minimal Universal Basic Income by the Social-democratic Left in Toronto or  A Robust or Ambitious Universal Basic Income: An Impossible Dream for Some Among the Social-democratic Left), and Mr. Clarke’s uncritical reference to it is indicative of Mr. Clarke’s lack of critical distancing from his social-democratic compatriots; his rubber stamping of other social democrats’ position is quite typical of social democrats in general, it would seem (see Exposing the Intolerance and Censorship of Social Democracy, Part Two: Critique of the Standard of Canadians and Landed Immigrants Working for an Employer). 

The way in which Ms. Dhunna and Mr. Bush refer to articles written by others on the subject of basic income, for instance, gives the impression that the authors of some of the articles to which they refer find basic income to be impractical–whereas it is often the case that it is only certain forms of basic income that such authors find impractical; other forms they find feasible–but Ms. Dhunna and Mr. Bush (and Mr Clarke) neglect to acknowledge this. By referring to the article Dhunna and Bush wrote without further ado, Mr. Clarke in effect rubber stamps uncritically their own distortion of the views of others. This is hardly what the working class needs today. Mr. Clarke, despite his apparent anti-capitalist rhetoric, is anti-neoliberal but not anti-capitalist. 

Let us, however, see what Mr. Clarke himself actually proposes as an alternative–what his aims are.  The following is almost a verbatim report of the third section of Mr. Clarke’s presentation on YouTube, presented on June 21, 2021, titled Basic Income Is a Neoliberal Trap  (https://www.youtube.com/watch?v=r40D6fU760s&t=4s):

Alternative Directions

The alternative is to rejuvenate our unions and fight for decent wages, to fight to increase minimum wages, to fight for workers’ rights–rather than extend the cash benefits and extend the reach of the marketplace. It is far better to put considerable effort into the struggle for public services.

Now, Mr. Clarke fully acknowledges that there are income-support programs that are vital and needed, and we cannot let these supports become a kind of poor cousin. We need unemployment insurance that provides adequate coverage and secure coverage. We need the disgusting attack on injured workers that has taken place to be reversed and decent benefits be provided. We need a fight to ensure that disability benefits are adequate and meet people’s needs and that they are secure. We need to challenge the intrusion and moral policing that goes on within these systems.

But to extend the cash benefit widely out into the workforce is a huge mistake. And we could do so much better. Rather than try to get what in practice would be a meager cash benefit, it would be so much better to struggle to challenge the commodification of housing, the neoliberal city, the blighting of urban space with this agenda of greed by fighting for a massive extension of social housing. So that’s a benefit that goes to working-class people and does not go into the pocket of landlords. There’s a need to fight for increases in the adequacy of healthcare. The pandemic has made that absolutely clear. We need pharmacare, dental care, a unviersal childcare program that is not an empty perennial liberal promise. We need post-secondary education to be free; we need free public transport systems. On all of these fronts, we need to take up a fight.

But people will say: We have suffered defeats. We cannot win these things. Mr. Clarke argues that the left has for a very long time forced on the defensive. The class struggle has not gone in our favour for a considerable period of time. But there is no alternative but to rebuild and to fight back and to win what we can. And to challenge this society but to fight for a different society. That’s absolutely indispensable. There in fact is not some social policy ruse that can just put things right.

Basic income is not going to solve the problem. Our lack of strength, our lack of ability to fight in the way we need to fight is the problem we have to address. We need to build that movement now more than ever. In this situation of global crisis we need more than ever to fight back, and we can do so much better in focusing our struggles than to fight for the commodification of social provision and basic income.

There is little difference between Dhunna and Bush’s call for a refurbished welfare state and Mr. Clarke’s vision of a “different society.” The society he envisions is an improved version of the welfare state established after the Second World War; it is hardly a vision of a society without classes, without exploitation and without oppression. 

I will, however, restrict my criticism of Mr. Clarke’s position in this post to his reference to decent wages–and will continue with my criticism of Mr. Clarke’s views on economic coercion–the first part of his presentation in the YouTube video in another post by referring to his apparent acknowledgement that economic coercion forms an essential element of a capitalist society–all the while ignoring the significance of that for formulating policies to counter such economic coercion.  

Decent Wages and Exploitation 

Mr. Clarke does not subject the concept of decent wages to any critical scrutiny. Ironically, Mr. Clarke often refers to exploitation as an essential aspect of a society dominated by a class of employers (and I agree with him on this view), as a basis for criticizing the impracticality of a proposal for universal basic income (see his Youtube presentation)–which I will address in relation to basic income in another post), but he isolates the concept of “decent wages” from any consideration of exploitation. 

The concept of “decent wages” in effect justifies the exploitation of workers and their continued economic coercion. That does not mean, of course, that I would criticize workers for seeking to increase their wages–increasing the standard of living does have the potentiality of improving the quality of life for those who work for employers, and I also have sought to increase my wages or salary to improve my quality of life. However, seeking to increase wages does not make the wages “decent”–given exploitation. 

By referring to “decent wages,” Mr. Clarke, despite his references to exploitation, implicitly uses the standard of working for an employer as a standard for determining what is decent work. This limitation of the left has been noted by others. Kathleen Millar (2017) has argued just that in her critique of the isolation of a set of individuals as the “precariat”. From “Toward a critical Politics of Precarity,” Sociology Compass, Volume 11,  pages 6-7: 

At the same time, translating the concept of precarity to different parts of the world has also meant recognizing that precarity is originary to capitalism. The very condition of having to depend on a wage to sustain one’s life is what makes a worker precarious—not just the specific structures of this or that job (Barchiesi, 2012a; Denning, 2010). From this perspective, precarity is capitalism’s norm, not its exception, and is shared by all workers whether employed or unemployed. We usually think of the worker with a stable, full‐time job as the model of capitalist labor—against which the numerous unemployed, informal, or wageless workers (largely in the global South) are compared. But the latter
reveal the latent precarity of all workers who must sell their labor‐power for a living. This means that the precarity of labor, far from being the exception in capitalism, is the necessary condition for the creation of capital.

To see insecurity at the heart of wage labor (rather than a condition of its absence) is to complicate the current denunciatory discourse of precarity. Critiques of precarity—whether explicitly or as another element of what Thorkelson (2016) describes as its political unconscious—uphold full‐time, wage‐labor employment as an ideal. One problem with this politics of precarity is that it ignores how wage labor can itself be an experience of insecurity, degradation, exploitation, and abuse. For example, Franco Barchiesi (2011) makes this argument through his study of wage labor as a technique of governance in both colonial and postcolonial South Africa. He shows how colonial administrators emphasized the “dignity of work” as a way to use wage labor to discipline African populations seen as “uncivilized” and “unruly.” Many African workers refused waged employment, instead opting for various forms of
subsistence labor or self‐employment that, while insecure, allowed them to avoid the discipline and indignity experienced when working in factories and mines. In this historical context, Barchiesi argues, “precarious employment was not a condition of disadvantage but enabled opposition to the labor‐centered citizenship of Western modernity” (15). Barchiesi goes on to show how today, the continued emphasis on “decent jobs” and “job creation” in postapartheid South Africa fuels the precariousness of workers by continuing to link social citizenship to full‐time wage labor at
the same time that stable employment is increasingly scarce (see also Barchiesi, 2012b). The emphasis on decent jobs also reinforces forms of masculinity, nationalism, and inequality that a social order structured around wage labor produced. In short, the demand for decent jobs, as a solution to precarity, generates a conservative politics attached to the valorization of wage labor. It also precludes the “political potentials of precarity” (Barchiesi, 2012b, 248) or what I have described elsewhere as the possibility that forms of work beyond wage labor might open up other ways of fashioning work and life (Millar, 2014).

This brings me back to the question that began this article: what are we holding onto through the ubiquitous, denunciatory discourse of precarity? One answer to this question is certainly wage labor. Or more precisely, many critiques of precarity remain attached to what Kathi Weeks (2011) has described as the taken‐for‐granted valorization of waged work as an economic necessity, social duty, and moral practice. This attachment to waged work is part of a broader response to precarity that has reaffirmed normative modes of life. For example, Lauren Berlant (2011) argues that conditions of precarity have led to deepened aspirations for and reinvestments in the normative good life—a
stable job, middle‐class home, guaranteed rewards for hard work, and the promise of upward mobility. These forms of attachment, she suggests, paradoxically become obstacles to fulfilling the very desires that are wrapped up with the aspiration for a good life. This produces what Berlant calls a “relation of cruel optimism” (170).

Alternatively, we could see the denunciation of precarity through the lens of “left melancholy.” Drawing on Walter Benjamin’s use of this term, Wendy Brown (1999) reflects on the ways leftist politics remains mournfully committed to ideals, categories, and movements that have been lost, preventing the possibility of radical change in the here and now.4 To cling to the ideal of full employment and decent jobs, rather than to question waged work as a social and economic requirement, could certainly be an example of left melancholy. But Brown is less interested in specifying the objects of attachment than in showing how the very state of melancholia replaces a political commitment to disruption with an unacknowledged pernicious traditionalism. In other words, perhaps it matters less what one is holding onto, just that one is holding on. Or as Dorothy Day (1952) insisted in her decades‐old article on precarity, “The thing to do is not to hold on to anything.”

Mr. Clarke, like so many social-democratic or social-reformist leftists, implicitly clings to working for an employer as the standard for his own goals. 

This implicit standard is kept separate from Mr. Clarke’s rhetorical references to exploitation, which serve to hide his social-democratic or social-reformist political position. 

Let me make a categorical statement: There is no such thing as a decent wage. To work for an employer is in itself degrading, exploitative and oppressive. The concept of a decent wage serves to hide this exploitative situation (see The Money Circuit of Capital). 

Mr. Clarke, apparently, only aims at refurbishing the welfare state rather than abolishing exploitation. Like Mr. Bush’s own references to exploitation, Mr. Clarke uses the concept as a rhetorical flourish (in his case, to criticize a radical policy of basic income) while conveniently “forgetting” the concept when it comes to the issue of whether wages can ever be decent.

Thus, on Mr. Clarke’s blog, on March 7, 2021, in a post titled http://WHEN YOUR ENEMY’S ENEMY IS NOT A FRIEND we read: 

  In a world based on exploitation and oppression, resistance is ever present. … 

 The US and its junior partners compete with their major rivals and pose a terrible threat to the poor and oppressed countries they seek to dominate and exploit. However, we can’t forget that those countries are themselves class divided societies and that not all the exploitation and oppression that their populations face comes out of Washington. Domestic capitalists are also the enemy and the governments of those countries, even where they clash with US objectives, still represent the interests of these home grown exploiters. [my emphases]

Despite his reference to exploitation, Mr. Clarke conveniently forgets the concept when it comes to referring to a “decent wage.” Nowhere does Mr. Clarke justify his view that there is such a thing as a decent wage. There are undoubtedly better wages and worse wages, but how any wage is decent is something that Mr. Clarke merely assumes rather than demonstrates.

The reference to “decent wages” is a social-democratic trick to hide the fact that there is no such thing as “decent wages” in a society dominated by a class of employers. How can any wage be decent when it involves at a minimum economic coercion and oppression of workers by treating them as things or means for purposes not defined by them (see The Money Circuit of Capital  and  Employers as Dictators, Part One)  but by a minority and, in addition, exploitation that involves producing a surplus (see for example  The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One )?

Furthermore, in the case of workers in the private sector, in the case of both oppression and exploitation, the results of the previous labour of workers is used to further oppress and exploit the workers by means of previous acts of oppression and exploitation–an intensified form of oppression and exploitation (something Mr. Clarke entirely ignores). Mr. Clarke simply ignores this additional feature of exploitation and oppression.

Mr. Clarke thus uses the concept of exploitation for social-democratic purposes–an anti-neoliberal purpose and not an anti-capitalist purpose. Advocating for decent wages while using the word “exploitation” is contradictory–but exploitation is really just a word for Mr. Clarke. Alternatively, Mr. Clarke believes that workers are exploited–but that such exploitation cannot be abolished. He certainly never advocates the abolition of exploitation, and his aim of achieving decent wages simply ignores the issue. 

What I wrote in another post relation to Ms. Dhunna and Mr. Bush’s political position applies as much to Mr. Clarke:

Dhunna and Bush’s first aim–to “meaningfully improve the material realities of working class and oppressed people”–sounds both practical and radical. It is actually conservative since its focus is entirely on distributional struggles rather than struggles over control of working conditions at both the micro and macro levels. Indeed, since this is their primary goal, they practically define a socialist society as an enhanced welfare state–capitalism with a more human face.

By focusing on distributional struggles, they imply, without ever saying it, that wider struggles to control working conditions are impractical and utopian. They, the realists, know what “bread and butter issues” are relevant for the working class, and such “bread and butter issues” are purely distributional struggles. Such a stance is conservative–its aim is not to end class rule, but to perpetuate it–though in a more humanized form than at present.

Wages, Exploitation and the Accumulation of Capital 

This  becomes even more evident when we consider, not only the immediate exchange between workers and employers and the subsequent exploitation but also the antecedent processes of exploitation. When we consider the process of exploitation and oppression of workers as a process, the immediate exchange between workers and employers (whether through collective or individual bargaining) is actually the use of surplus value (symbolized by “s” produced by workers in earlier rounds of exploitation to further exploit them. I referred to this process in my critique of Dhunna and Bush’s conservative use of Marx’s theory of exploitation. From Karl Marx, Capital: A Critique of Political Economy, volume 1, pages 727-730:

Let us now return to our example. It is the old story: Abraham begat Isaac, Isaac begat Jacob and so on. The original capital of £10,000 brings in a surplus-value of £2,000, which is capitalized. The new capital of £2,000 brings in a surplus-value of £400, and this too is capitalized, transformed into a second additional capital, which in its turn produces a further surplus-value of £80. And the process continues in this way.

We leave out of account here the portion of the surplus-value consumed by the capitalist. We are also not interested, for the moment, in whether the additional capital is joined on to the original capital, or separated from it so that it can valorize itself independently. Nor are we concerned whether the same capitalist employs it who originally accumulated it, or whether he hands it over to others. All we must remember is this: by the side of the newly formed capital, the original capital continues to reproduce itself and to produce surplus-value, and this is true of all accumulated capital in relation to the additional capital engendered by it.

The original capital was formed by the advance of £10,000. Where did its owner get it from? ‘From his own labour and that of his forefathers’, is the unanimous answer of the spokesmen of political economy. And, in fact, their assumption appears to be the only one consonant with the laws of commodity production.

But it is quite otherwise with regard to the additional capital of £2,000. We know perfectly well how that originated. There is not one single atom of its value that does not owe its existence to unpaid labour. The means of production with which the additional labour-power is incorporated, as well as the necessaries with which the workers are sustained, are nothing but component parts of the surplus product, parts of the tribute annually exacted from the working class by the capitalist class. Even if the latter uses a portion of that tribute to purchase the additional labour-power at its full price, so that equivalent is exchanged for equivalent, the whole thing still remains the age-old activity of the conqueror, who buys commodities from the conquered with the money he has stolen from them.

If the additional capital employs the person who produced it, this producer must not only continue to valorize the value of the original capital, but must buy back the fruits of his previous labour with more labour than they cost. If we view this as a transaction between the capitalist class and the working class, it makes no difference that additional workers are employed by means of the unpaid labour of the previously employed workers. The capitalist may even convert the additional capital into a machine that throws the producers of that capital out of work, and replaces them with a few children. In every case, the working class creates by the surplus labour of one year the capital destined to employ additional labour in the following year.5 And this is what is called creating capital out of capital.

The accumulation of the first additional capital of £2,000 presupposes that a value of £10,000 exists, advanced by the capitalist, and belonging to him by virtue of his ‘original labour’. The second additional capital of £400 presupposes, on the contrary, only the prior accumulation of the £2,000, of which the £400 is the capitalized surplus-value. The ownership of past unpaid labour is thenceforth the sole condition for the appropriation of living unpaid labour on a constantly increasing scale. The more the capitalist has accumulated, the more is he able to accumulate.

The surplus-value that makes up additional capital no. 1 is the result of the purchase of labour-power with part of the original capital, a purchase which conformed to the laws of commodity exchange and which, from a legal standpoint, presupposes nothing beyond the worker’s power to dispose freely of his own capacities, and the money-owner’s or commodity-owner’s power to dispose freely of the values that belong to him; equally, additional capital no. 2 is merely the result of additional capital no. 1, and is therefore a consequence of the relations described above; hence each individual transaction continues to conform to the laws of commodity exchange, with the capitalist always buying labour power and the worker always selling it at what we shall assume is its real value. It is quite evident from this that the laws of appropriation or of private property, laws based on the production and circulation of commodities, become changed into their direct opposite through their own internal and inexorable dialectic. The exchange of equivalents, the original operation with which we started, is now turned round in such a way that there is only an apparent exchange, since, firstly, the capital which is exchanged for labour-power is itself merely a portion of the product of the labour of others which has been appropriated without an equivalent; and, secondly, this capital must not only be replaced by its producer, the worker, but replaced together with an added surplus. The relation of exchange between capitalist and worker becomes a mere semblance belonging only to the process of circulation, it becomes a mere form, which is alien to the content of the transaction itself, and merely mystifies it. The constant sale and purchase of labour power is the form; the content is the constant appropriation by the capitalist, without equivalent, of a portion of the labour of others which has already been objectified, and his repeated exchange of this labour for a greater quantity of the living labour of others.

The immediate exchange between workers and employers is an exchange of equivalents, so that workers receive the value of their cost of production. However, when considering the larger context of previous production, then the immediate exchange between employer and workers is a semblance . The employer uses a part of the surplus produced by the workers in a previous round as means of production (machines, raw material, buildings, etc.) and another part (socially as money and physically as means of consumption, such as food, clothing, shelter) to further employ them (in addition to the initial investment). 

If this is the case, how can anyone who believes in the existence of class exploitation refer to wages as decent wages? There is no such thing. Wages used to control the working class and to exploit them in the present, when conceived in the continuous process of production and exchange, are derived from surplus value produced in antecedent rounds of production so that the wage they receive today is the result of past exploitation and oppression.

The present domination of workers at work by employers is a consequence of past accumulation of surplus value and its investment in the further exploitation of workers.  How anyone who is anti-capitalist could refer to wages as “decent” is beyond me–unless they are really only anti-neoliberal (a particular form of capitalism but not capitalism as such) and not anti-capitalist, despite the rhetoric to the contrary. 

Again, the issues of exploitation and the accumulation of capital need to be linked together when determining whether there is such a thing as a decent wage. The following couple of long quotes by  Teinosuke Otani (2018) points to this need –a need that Mr. Clarke ignores by referring to decent wages as a primary aim without even engaging into inquiry into the nature of capitalist relations of production and exchange.

The first long quote has to do with what is called simple reproduction, where the private employer exploits workers by obliging them to work for more time than they themselves cost to produce, thereby enabling the private employer or capitalist to appropriate and then consume the entire surplus value (profit) produced. Since the entire surplus value (profit) is consumed, each year the same level of investment arises–simple reproduction. 

From  Teinosuke Otani (2018),  A Guide to Marxian Political Economy: What Kind of a Social System Is Capitalism?, pages 218-224 ( emphases in the original):   

8.4 Capital as the Materialisation of Unpaid Labour of Others

Under simple reproduction, it is assumed that the capitalist consumes the entirety of the surplus-value appropriated from the worker year after year. Now let’s assume that during a period of 5 years, a capital value of 1000 brings the capitalist a surplus-value of 200 every year and that the capitalist consumes this entire amount. At the end of the 5 years, he still has the 1000 in capital value that he possessed at the outset, but over the 5 years, he has appropriated 1000 in surplus-value from the worker and consumed this 1000 in value.

The capitalist would likely say: «It is precisely because I initially possessed 1000 in value, as the fruit of my own labour, that I was able to appropriate and consume 200 in value every year. The 1000 in value that I advance each year—no matter how many years this is repeated—is the initial value created by my labour».

The situation appears quite different, however, if we carefully observe the process as repeated reproduction.

Let’s take our capitalist at his word here and assume that the 1000 in value he started off with was appropriated through his own labour, so that it is the materialisation of his own labour.

During the 5-year period, the capitalist consumes a sum of value equal to the value he initially possessed. Yet after the 5 years, he is still in possession of a sum of value equal to what he started off with. Why? What is clear is that it is precisely because the capitalist has received the 1000 in surplus value for free that he can still have 1000 in value despite having consumed that amount. The 1000 that he holds after 5 years is thus the result of the 1000 in surplus-value appropriated during the 5 years, merely representing the total sum of 1000 in surplus-value obtained for free. This point can be well understood if we consider what would happen to the capitalist, who consumes 200 in value every year, if he did not appropriate any surplus-value during those years. In such a case, even if he had 1000 the first year, he would have no alternative but to consume 200 every year, reducing by that amount the sum of money that could be advanced as capital. After 5 years, the sum would reach zero and he would cease to be a capitalist. The fact that he is able to still exist as a capitalist at the end of 5 years, with 1000 in capital, is clearly the outcome of appropriating 200 surplus-value every year over the course of that period.

The capitalist in our example has appropriated the materialisation of 1000 in value from another person’s labour during a 5-year period. Since the capitalist is still in possession of 1000 in value after 5 years, having lived by consuming 200 per year, his 1000 is nothing but the materialisation of the labour of others. Even if the capital value the capitalist initially possessed was the materialisation of his own labour, the capital value he is now in possession of after 5 years is the materialisation of the worker’s surplus-value, which is to say, thematerialisation of the labour of others. Starting from the sixth year, the capitalist appropriates further surplus-value that is the materialisation of others’ labour by means of capital value that is also purely the materialisation of the labour of others. 

8.5 Reproduction of Capital-ownership Through Appropriating the Labour
of Others

At first glance, the capital relation, which is the relation of production between capitalists and workers, seems to continue to exist, as is, year after year. In particular, it seems that the pivot of this continuity is the capitalist’s continued possession of capital, which he owned from the outset. In fact, however, as noted in the previous section, the capital relation is not an inorganic entity like a cornerstone, which cannot collapse once put in place unless some outside force is applied, but rather is maintained by being constantly reproduced and formed through the labour of labouring individuals within the production process. This is similar to how the human body is maintained by the infinite number of cells that compose it being replaced every day by newly created ones.

… 

Now let’s imagine that a person with no money borrows 1000 in value from someone (assuming that the loan is free of interest) and makes it function as capital for a 5-year period, during which he appropriates 200 in surplus-value every year and that after 5 years he repays the 1000. Once the loan had been repaid, he would return to his penniless state and cease to be a capitalist. In this case, the fact that he was able to exist as a capitalist for 5 years was not because he held on to 1000 in value during the 5 years. Indeed, if the 1000 had not functioned as capital, he would have consumed the 1000 during the 5 years, leaving him with nothing but the debt for that amount. The reason the capitalist is instead able to still have 1000, and was able to consume 200 in value every year, is that during those 5 years, he made the 1000 in value function as capital and was thus able to appropriate 200 in surplus-value from workers each year. It is precisely because of appropriating this unpaid labour that the capitalist is able to exist as a capitalist for a period of 5 years.

Even if, during the 5-year period, he had been able to live without consuming the 200 of surplus-value or had somehow been able to procure a separate consumption fund to last the 5 years, so that even after repaying the 1000 by the end of that period he would have a total of 1000 in value appropriated from workers, it would still be clear that this value is the mass of surplus-value appropriated from the workers.

In short, the capital value owned by the capitalist must sooner or later, through the progression of reproduction, be transformed into the materialisation of the appropriated labour of others, so that the ownership of capital value by the capitalist (even if initially the result of his own labour) is transformed into the outcome of the appropriation of others’ labour, i.e. transformed into the outcome of exploitation carried out in the production process.

In simple reproduction, it is assumed that the original investment came from the labour of the purchaser of the labour power of workers and of the means of production (machinery (such as computers), buildings, raw material, and other such products), but on the basis of that assumption the preservation of the same initial investment arises through the constant exploitation of workers.

In simple reproduction the preservation of the original value of the investment year after year, therefore, is due to the continued exploitation of workers year after year. Can the wages the workers receive then be considered in any way decent under such circumstances? Let Mr. Clarke and other social democrats explain this. 

When we consider the real accumulation of capital, where part of the surplus value (profit) produced for free by workers and appropriated by private employers (capitalists) for no equivalent is not consumed but ploughed back into further investments, not only is the original value of original capital preserved through the continued exploitation of workers but the relation between the original capital invested and the new capital invested due to the exploitation of workers increasingly becomes smaller and smaller relatively as the accumulation of capital and the continuous exploitation of workers proceed. From Otani, pages 228-234:  

Our assumption here again will be that a capitalist has advanced 1000 in value and then appropriates 200 in surplus-value, all of which is subsequently advanced as additional capital.

Where does the capitalist get this 1000 in capital? The capitalists and the economists who defend their interests respond in unison that this capital was the fruit of the capitalists’ own labour or that of their forbearers. But we have already seen that, even seen from the perspective of simple reproduction, all capital is transformed into a mass of unpaid labour of others through the recurrence of reproduction and that capital-ownership is also reproduced through the appropriation of unpaid labour. But, for now, let us accept the capitalist’s view of the situation.

… commodity holders in the sphere of commodity exchange recognise each other as private owners, but in so doing, they do not concern themselves with how the other person came to possess his commodity. Instead, they can only assume that this other person obtained it through his own labour. This socially accepted assumption that a private owner’s property title stems from own labour is the property laws of commodity production.

When the capitalist initially appears on the market with 1000 and purchases means of production and labour-power at their value, those involved in the commodity and labour markets do not care how he came into possession of the 1000 in value, provided he is the proper owner of that sum. Those involved in the transaction all assume with regard to each other that commodities and money were obtained through their own labour, with each quite content to declare: «I worked to save up this 1000» or «It was obtained through my parents’ hard work». And it seems that this is the only assumption that could be made, according to the property laws of commodity production.

The situation is completely different, however, in the case of the 200 that the capitalist seeks to advance as additional capital. We are perfectly familiar with the process that generates this sum of value, knowing that it was originally surplus-value. This means that the 200 in its entirety is the objectification [materialisation] of the unpaid labour of others. The additional means of production and additional labour power purchased with this sum are nothing more than a new form taken by this value qua [as] objectification of unpaid labour.

Viewed as a transaction between the capitalist class and working class, we have a situation where the working class, through its surplus-labour in the current year, creates the new capital that becomes the additional means of production and additional labour-power the following year.

Now let us assume that the 200 is advanced in the second year as additional capital and yields 40 in surplus-value [the same rate of profit as the initial investment of 1000 with a surplus value of 200: 200/1000=40/200=1/5=20 percent]. Since the original capital also generates 200 in surplus-value in the second year, by the third year, there is 440 (in addition to the 1000) that can be advanced as capital [First year: 200s from the initial exploitation of workers+ second year, an additional 200s  from the 1000 again invested and used to exploit the workers +the 40s produced in the second year by the workers and used for further investment in the third year=440]. Not only is 400 unmistakably the objectification of unpaid labour, 40 is the objectification of unpaid labour appropriated through the additional capital, which itself is the objectification of unpaid labour. If this process of accumulating all the surplus-value is repeated for the subsequent 4 years, by the end of that period the capitalist will have—in addition to his original capital of 1000, which we could call the «parent»—the surplus-value appropriated through the parent capital during the 4 years… Together this forms an «offspring» of 1074. So if the capitalist advances the aggregate capital in the fifth year, there will be 2074 of capital («parent» and «offspring») in operation that year. [The capitalist is assumed to exploit workers to the extent of 20 percent per unit. At the end of the first year, 1000×1.2=1,200; this is invested in the second year, and at the end of the second year, 1,200×1.2=1,440; this is invested at the beginning of the third year, and at the end of the third year, 1,440×1.2=1,728; this is invested at the beginning of the fourth year, and at the end of the fourth year, 1,728×1.2=2074, which again can be invested at the beginning of the fifth year…]. 

Even if we assume that the capitalist possessed the 1000 of the 2074 to begin with, he certainly cannot claim that the remaining 1074 in value was created through his own labour. As long as it is recognised that the 200 in surplus-value appropriated every year from the 1000 in capital is the objectification
of surplus-labour, then this 1074 in value is, from top to bottom, the surplus-value transformed back into capital and thus the objectification of labour of others. … In other words, we are dealing with a mass of surplus-labour appropriated through a mass of surplus-labour.

The more the reproduction of capital is repeated, the smaller the original capital advanced, until it becomes an infinitesimal amount. The surplus-value transformed back into capital, whether it is made to function as capital in the hands of the person who accumulated it or in the hands of someone else, comes to represent the overwhelming part of the capital that currently exists.

The capitalist every year buys the means of production and labour-power on the commodity market and labour market in accordance with the property laws of commodity production in order to repeatedly carry out production. The result of this is that the capitalist appropriates unpaid living
labour on an increasingly large scale by making the unpaid surplus-labour of others function as capital. Marx refers to the capitalist’s appropriation of unpaid labour in this manner as the laws of capitalist appropriation.

In the market, which is the surface layer of capitalist production, the property law of commodity production operates. But if we consider the production of capital that underlies this in terms of social reproduction, it becomes clear that the law of capitalist appropriation is in operation. Where the capital relation exists, the law of capitalist appropriation is the necessary consequence of the property laws of commodity production. Marx expresses this reality by referring to the inversion of the property laws of commodity production in the laws of capitalist appropriation.

The surplus-value qua ]as] objectification of the surplus-labour of another person, which the capitalist appropriates in the production process, is turned into capital; and the ownership of this capital value is thus the result of the appropriation of surplus-value in the production process. The capitalist’s
appropriation of surplus-value in the production process precedes, and brings about, his ownership of capital. Here it is precisely the production of surplus-value by the labouring individuals first. Rather, it is precisely the behaviour of the labouring individuals within the production process that is always generating the ownership of the means of production by the capitalist within the production process that generates capital ownership.

At first glance, there seemed to be a vicious circle with regard to capitalist ownership of the means of production by the capitalist and his appropriation of surplus-value, wherein the latter is only possible through the former, but the latter always generates the former. However, within this relation,
the active determining moment that continues capitalist production as such is the constant reproduction of products within the production process by the labouring individuals and the constant production of surplus-value. Labouring individuals are the active subject of continual production,
regardless of the form of society, but under capitalist production, we have a situation where labouring individuals completely separated from the conditions of labour come into contact with the means of production in the production process as things belonging to others, which means that the resulting
surplus-labour always belongs to others as well, and through this there is the continual reproduction of capital and wage-labour and the relation between them. Thus, in terms of the
capitalist ownership of the means of production, and the capitalists’ appropriation of surplus-value, it cannot be said that the former is the immovable premise or even that it is a vicious circle where it cannot be said which of the two comes first. Rather, it is precisely the behaviour of the labouring individuals within the production process that is always generating the ownership of the means of production by the capitalist.

When conceived as a continuous process of exploitation and accumulation of capital, the idea of “decent wages” sounds and is hollow. The idea of “decent wages” completely ignores the whole process of exploitation founded on previous exploitation. Mr. Clarke, practically, by referring to “decent wages,” converts his references to exploitation into mere words, emptied of content. 

What is necessary is to criticize the claims of capitalist society’s own ideologues. From Elena Lange (2021),  Value without Fetish: Uno Kōzō’s Theory of ‘Pure Capitalism’ in Light of Marx’s Critique of Political Economy, page 33: 

… Marx was less interested in contrasting the capitalist mode of production with the utopias of socialism, but in contrasting the bourgeois mode of production with its own claims.

Mr. Clarke, despite his nod towards Marx’s theory of exploitation, seems to have little interest in critiquing the claims of the ideologues of employers when he refers to decent wages. 

The Parallel of Decent Work and Decent Wages: The Case of the Social-Democratic International Labour Organization (ILO) 

Mr. Clarke has more in common with the social-democratic rhetoric of the International Labour Organization (ILO) than with any Marxian critique of capitalist society. The ILO talks about “decent work” and the like, and it claims that labour should not be treated as a commodity–but workers need to treat themselves necessarily as commodities, and euphemisms about “decent wages” and “decent work” serve to hide that fact. From Gerry Rodgers, Eddy Lee, Lee Swepston and Jasmien Van Daele (2009),  The International Labour Organization and the Quest for Social Justice, 1919–2009, page 7: 

Key passages from these documents are reproduced in Appendix II. Together, they identify the principles, issues and means of governance that lie at the heart of the ILO ’s work.

Five basic principles can be distinguished in these texts.

  • Lasting peace cannot be achieved unless it is based on social justice, grounded in freedom, dignity, economic security and equal opportunity.
  • Labour should not be regarded merely as a commodity or an article of commerce.
  • There should be freedom of association, for both workers and employers, along with freedom of expression, and the right to collective bargaining.
  • These principles are fully applicable to all human beings, irrespective of race, creed or sex.
  • Poverty anywhere constitutes a danger to prosperity everywhere, and must be addressed through both national and international action.

These moral and political principles guide the action of the ILO , and provide the cognitive framework for its work – the spectacles through which the ILO sees the world. The first of these, that peace must be based on social justice, has been considered above. It lays out the overriding reason for the existence of the Organization. The second provides the fundamental principle guiding its action. It expresses the dignity of labour and the recognition of its value, in contrast to the Marxian notion that, under capitalism, labour becomes a commodity. In the ILO ’s vision, all forms of work can, if they are adequately regulated and organized, be a source of personal well-being and social integration. Of course, labour is bought and sold, but market mechanisms are subordinate to higher goals. The original 1919 Constitution states that “labour should not be regarded merely as a commodity”. By the time of the Declaration of Philadelphia, the same idea is expressed more strongly: “Labour is not a commodity.”

Labour in Marxian economics is certainly not a commodity, but labour power is–the capacity to work or to use means of production to produce a product. The ILO simply denies that it labour (power) should be a commodity–all the while denying the reality that it is in fact a commodity and must be a commodity if capitalist society is to emerge and to continue to exist. (Of course, unfree forms of labour (so that workers cannot freely choose a particular employer) can exist side by side with free labour–but the existence of free labour power as a commodity is still necessary. It may not be very pleasant to think about the social implications of the necessary existence of labour power as a commodity, but it is necessary to do in order to enable the working class to formulate policies that will more likely enable them to control their own lives by abolishing all class relations. 

Just as the ILO places a veil over the eyes of workers by arguing that labour (power) should not be a commodity–whereas it is necessarily a commodity in a society dominated by a class of employers, with the associated economic, social and political structures–so too do Mr. Clarke’s references to decent wages place a veil over our eyes by implicitly denying that workers are necessarily and continuously exploited. 

I would like to know what Mr. Clarke means by decent wages. Are the wages received by the unionized workers for Magna International, Air Canada, Rogers Communication, Suncor Energy or Telus decent wages? (see various posts that attempt to calculate the rate of exploitation for these unionized workers). If so, how does Mr. Clarke square such a view with the fact of exploitation? If not, then the concept of decent wages has no relevance for workers other than as an ideological cloak for their continued exploitation.

Or are the wages that I received as a brewery worker in the early 1980s decent wages? For example, at the brewery where I worked in Calgary, Alberta, Canada, in the collective agreement between the Brewery Employers Industrial Relations Association (BEIRA) (for Carling O’Keefe) and the Western Union of Brewery, Beverage, Winery and Distillery Workers, Local 287, dated April 1, 1980 to March 31, 1983, bottling operators received a base wage of $13.20 on April 1, 1982. Sick pay was 12 days per year, a guaranteed wage plan, life insurance up to $20,000, a long-term disability plan, paid basic Alberta Health Care Insurance Plan, hospital expenses to a maximum, major medical expenses (with a yearly deductible of $10 for an individual and $20 for a family)), a dental plan, etc. In fact, many of the benefits specified by Mr. Clarke in his reference to Dhunna and Bush’s article (“much else beside”) are included in the collective agreement. ,

(I ended up operating a machine, at first part of the soaker from the end where the cleaned bottles come out of the soaker as well as the EBI (electric bottle inspector), and then when there was technological change, just the EBI unit (and maintaining the line going into the filler free of glass).

Did I receive a decent wage? What of the surplus value that had been used in previous rounds of accumulation that were used to further exploit us? Should not these facts be  taken into account when judging whether there is anything like a decent wage? Apparently not. 

Conclusion

Mr. Clarke refers to exploitation and capitalism often enough, but he then conveniently forgets about it when he refers to “decent wages.” Mr. Clarke is anti-neoliberal but not really anti-capitalist–despite the rhetoric to the contrary. A real anti-capitalist perspective would never refer to any wage as decent–or for that matter any work that involves working for an employer as decent work. 

In a follow-up post, I will critically analyze Mr. Clarke’s references to “economic coercion.” I may or may not integrate such  an analysis with a critique of Mr. Clarke’s criticisms of a basic income. 

 

The Rate of Exploitation of Telus Workers , One of the Largest Private Employers in Toronto, Ontario, and Vancouver, British Columbia

Introduction

In two others posts I presented the twenty largest employers in Toronto according to level of employment (see A Short List of the Largest Employers in Toronto, Ontario, Canada) and the twenty largest employers in  Vancouver according to revenue (see A Short List of the Largest Employers in Vancouver, British Columbia, Canada, Mainly Based on Revenue). Telus is on both lists.

I have tried to calculate the rate of exploitation of workers of Magna International in an earlier post (see The Rate of Exploitation of Workers at Magna International Inc., One of the Largest Private Employers in Toronto, Part One); Magna International is one of the largest employers in Toronto. I also calculated the rate of exploitation for Air Canada workers, the Canadian Imperial Bank of Commerce (CIBC) workers, Rogers Communications, Toronto Dominion (TD) Bank and Suncor Energy. 

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies in Toronto and Canada if they are available in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them. We have the following:

The rate of exploitation or the rate of surplus value=s/v=2485.3/4258.7=58%.

That means that for every hour worked that produces her/his wage, a worker at Telus works around an additional 35 minutes for free for Telus. Alternatively, in terms of money, a regular Telus worker who receives $1 of wage or salary produces $0.58 surplus value or profit for free. 

Assuming either a 7.5 hour working day  or an 8 hour working day: 

  1. In a 7.5- hour working day (450 minutes), a Telus worker produces her/his wage in about 285 minutes (4 hours 45 minutes) and works 165 minutes ( 2 hours 45 minutes) for free for Telus. 
  2. In an 8-hour working day (480 minutes), a Telus worker produces her/his wage in about 304 minutes (5  hours 4 minutes) and works 176 minutes (2 hours 56 minutes) for free for Telus. 

Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is also unfree during that time (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation and Employers as Dictators, Part One).

Let us look at the management rights clause of the collective agreement between Telus and United Steel Workers (USW) Local 1944 (Telecommunications Workers Union Local 1944), for the period between November 27, 2016 and December 31, 2021.

From page 6 of the collective agreement:

ARTICLE 8 – MANAGEMENT RIGHTS
8.01  Unless otherwise explicitly agreed to in this Agreement, management retains the
exclusive right to manage its operations in all respects including the direction of the
working forces. The Company agrees that any exercise of these rights shall not
contravene the provisions of this Agreement.

8.02  Management and excluded employees shall not normally do bargaining unit work, unless
such work has traditionally been performed by management and excluded employees.

8.03  Although not normal operating practice, occasions may arise when management and
excluded employees may perform bargaining unit work for reasons of training, on-going
familiarization, emergency, other unforeseeable or unpreventable circumstances, or the
correction of minor deficiencies on a customer’s premises which can be completed within
fifteen (15) minutes in the normal course of management performing quality inspections.
No Regular employees will lose their employment as a result of management and
excluded employees performing bargaining unit work for the aforementioned reasons.

8.04  While managers will attempt as far as possible to assign an employee to work for which
the employee has been trained, no part of this Agreement shall be construed as meaning
that an employee shall do only work of the classification for which they are employed, nor
shall any part of this Agreement be construed as meaning that certain work shall be
performed by only certain classified employees.

This management rights clause at least sets explicit limits on the right of management to engage in certain kinds of work reserved for union members–a superior managements rights clause that workers could be used to harass management under certain circumstances (as we did in the brewery in Calgary where I worked–the collective agreement had a similar limiting clause that enabled us to monitor the actions of foremen if they pressured us too much).

Nonetheless, despite the explicit limits on the right of management, the general power of management to direct operations as it sees fit and thus to use workers for purposes over which workers have little say remains intact.

Not only does the collective agreement give management the right to direct workers’ lives in many, many ways in such a fashion that they produce more value than they themselves cost, leading to the workers working for free for a certain period of time, but even during the time when they produce the value of their own wage, they are subject to the dictates of management (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation).

Ideologues of unions and social democrats or social reformers simply ignore this double situation of workers–of having to work for free and having to work throughout the day under the power of unelected managers (see Employers as Dictators, Part One).

Given this conclusion, how can any collective agreement express in any way the cliches used by many ideologues of unions–such as “fair contracts,” or “decent work?” Is it possible for a collective agreement to be fair from the workers’ point of view? It is certainly possible to be fairer, of course, but no collective agreement questions the right of employers and their representatives (management) to exploit workers and to use them for purposes foreign to their own lives.

Data on Which the Calculation Is Based

The calculation of the rate of exploitation is undoubtedly imperfect, and I invite the reader to correct its gaps. Nonetheless, the lack of any attempt to determine the rate of exploitation at the city level has undoubtedly reinforced social-reformist tendencies.

I first give revenue and expenses figures according to the Telus Annual Report (2020), and then indicate some needed adjustments so that they accord more with Marxian economics. Amounts are in millions of Canadian dollars, unless otherwise indicated.

Revenue

Operating revenues and other income $ 15,463 million or $15.463 billion

Income before income taxes $1,711 million, or $1.711 billion

Operating expenses

Goods and services purchased 6,268
Employee benefits expense 3,701
Depreciation 2,107
Amortization of intangible assets 905

Total operating expenses=12,981


[Operating Income (Operating revenues and other income – operating expenses)=2482]
Financing costs 771
Income Before Income Taxes 1,711 [2482-771=1711]

Adjustments

Adjustments must be made both at the level of total expenses and at the level of total revenue.

In Marxian theory, it is necessary to question whether some expenses are expenses for both the individual employer and for the class of employers (and fractions of their class, such as those who live on interest); in such a case, the expense is deducted from total revenue. On the other hand, there are expenses that are expenses for the individual employer but are not expenses when looked at from the point of view of the class of employers; in such an instance, they are paid out from the surplus value produced or obtained by workers and are to be included in income before taxes.

Total Expenses Adjustments

Adjustment of Total Labour Costs (Expenses) 

There seems to be an inconsistency in the calculation of purchasing the capacity to work (labour power) of workers at Telus. Above, the category “Employee benefits expense” is $3.701 billion. However, the annual report also states the following, in more detail: 

Employee benefits expense – gross
Wages and salaries $ 3,668 
Share-based compensation 173 
Pensions – defined benefit 102
Pensions – defined contribution  94 
Restructuring costs 49 
Employee health and other benefits 190 
4,276

We can reconcile these numbers by looking at the category “Capitalized internal labour costs, net”:

Capitalized internal labour costs, net

Contract acquisition costs

Capitalized (74) 
Amortized 55

Contract fulfilment costs

Capitalized (2) 
Amortized 4

Property, plant and equipment (350) 
Intangible assets subject to amortization (208)

(575)

Numbers in parentheses need to be subtracted, and numbers without parentheses are added. The subtracting and adding results in a negative 575. If we subtract 575 from 4,276, we obtain 3,701. 

Let us look at the category “Capitalized internal labour costs, net.” The category refers to the following (  https://smallbusiness.chron.com/accounting-rules-internal-capitalization-labor-37119.html): 

Capitalizing Labor Costs

The IRS and standardized accounting rules allow for the cost of putting property and equipment into service to be added to the direct cost of purchasing the property and equipment for the purpose of capitalization. After all, the equipment is not usable until it is properly set up and in working order. Common labor costs that you can capitalize include the cost of assembly, construction and architecture.

The key to including the labor as part of the fixed asset cost is that the labor must be directly related to putting the property or equipment into service, and the labor costs are tracked separately from any other work that may be done by the employee or contracted labor personnel.

The difference seems to have to do with the purchase of turn-key machinery and equipment versus in-house production (including setting up and physical adjustments to ensure proper working order) versus in-house production (although it is unclear what is meant by “Property, plant and equipment.” Are these purchased externally or produced in-house? 

However, I will ignore these adjustments in the annual report since the nature of the category “Capitalized internal labour costs” in effect excludes Telus workers who perform work directly for Telus.

Therefore, I treat the whole category of “Capitalized internal labour cost” as a cost for the employment of Telus workers and hence include it in the calculation of variable capital. This does not change anything in terms of total operating expenses, as far as I can tell, since I assume that capitalized labour costs are included in the category “Goods and services purchased.” There is a shift in the internal distribution of operating expenses but no change in the absolute amount of operating expenses in this case.

The two adjusted operating expense categories would be, for now: 

Goods and services purchased 5,693
Employee benefits expense 3,701

There is another category that at least needs some possible explanation: 

Employee-related information
Total salaries and benefits6 (millions) $ 4,200

I have been unable to account for this except in the following manner: the difference between 4,276 and 4,200 is 76. If we subtract capitalized “Contract acquisition costs” (74) and capitalized “Contract fulfilment costs” (2) from 4,276, we obtain 4,200. However, I still use 4,276 for variable capital for the same reasons as I used 4,276 rather than 3,701. 

On the other hand, an adjustment needs to be made in total labour costs or expenses due to “Share-based compensation.” In other posts, I have generally treated some of this as a form of surplus value since some share-based compensation is compensation due to managers being able to meet or exceed specified targets and thus is a function of exploiting other workers. I have conservatively used 10% of share-based compensation as a basis for calculating the amount of surplus value obtained through exploiting other workers. That this is a conservative amount can be seen when we look at the subcategories of the category: 

Restricted share units $131
Employee share purchase plan $33
Share option awards $9
Total: $173 

Restricted share units seems to be a function of how well targets are met: 

(b) Restricted share units
General
We use restricted share units as a form of retention and incentive compensation. 

We also award restricted share units that largely have the same features as our general restricted share units, but have a variable payout (0%–200%) that depends upon the achievement of our total customer connections performance condition.

The distribution of share units according only to performing certain services versus meeting performance (target) conditions is as follows: 

Number of non-vested restricted share units as at December 31

Restricted share units without market performance conditions

Restricted share units with only service conditions 5,718,328
Notional subset affected by total customer connections performance condition 298,957

Subtotal: 6,017,285

Restricted share units with market performance conditions

Notional subset affected by relative total shareholder return performance condition 896,870 

Total: 6,914,155

“Total customer connections performance condition” seems to refer to the absolute number of customers (although I am unsure of this). In any case, if we only include the “restricted share units with market performance conditions” as originated from the exploitation of other workers, we have 896,870/6,914,155=13%. Hence, my use of 10 percent as an estimate of the percentage of share-based compensation that really has its source in surplus value is conservative, but I use it to be consistent with other posts. Ten percent of 173 is 17.3. This amount is added to the categories “Operating revenues and other income” and  “Income before income taxes” and subtracted from “Total labour costs.” 

We now have the following: 

Temporarily adjusted Income before income taxes (surplus value (s) $1728.3 million or $1.7283 billion 
Final adjusted total labour costs (variable capital (v) $4258.7

Adjustments of financing costs or expenses 

As explained in another post, interest in many instances can be treated as part of the surplus value produced and therefore added to net income since, although from the point of view of the individual capitalist it is an expense, from the capitalist economy as a whole it is derived from the production of surplus value. 

Let us look at more detail at financial expenses. 

Financing costs or expenses 

Interest on long-term debt, excluding lease liabilities – gross 676
Interest on long-term debt, excluding lease liabilities – capitalized (37)
Interest on lease liabilities 70
Interest on short-term borrowings and other 5
Interest accretion on provisions 16
Long-term debt prepayment premium 18

Total Interest expense 748 (adding all the above and subtracting 37)
Employee defined benefit plans net interest 16
Foreign exchange losses 14
Interest income (7)

Financing costs 771 [748+16+14-7]

In relation to the category “Interest on long-term debt, excluding lease liabilities–capitalized,” (that is to say, “Capitalized interest”) as I explained in my post on the rate of exploitation of Air Canada workers and Rogers Communications workers:

Some explanation of “interest capitalized” is in order. I have had difficulty in understanding the nature of “Interest capitalized.” As far as I can tell, interest that is normally paid and is an expense for the particular employer is treated, in Marxian economics, as part of surplus value because, at the macro level, it comes from the surplus value produced by the workers.

Interest capitalized seems to be different since the interest charged on money borrowed for the purpose of the construction of fixed assets (with a specific interest rate attached to it) is “capitalized,” or not considered part of interest expenses until the construction is finished and the fixed asset is ready to use. This accounting distinction, however, from the macro point of view, is irrelevant since both interest expenses and interest capitalized are derived from the surplus value produced by workers (or appropriated from them in another industry). Accordingly, both interest expenses and interest capitalized should be added to the amount of “Income before income taxes” category.

In the case of Air Canada, capitalized interest was positive (not in parentheses), and I therefore added it to the amount of surplus value produced by the workers. In the case of Rogers Communication, it is negative (since it is in parentheses). Accordingly, I have subtracted it.  

Accordingly, like Rogers Communication, I treat “Interest on long-term debt, excluding lease liabilities–capitalized,” (as the accountants have done) as a real expense for the purposes of calculation because it is negative (in parentheses).

As for the category “Interest accretion on provisions,” as I wrote in another post, the category of “accretion” means the following, according to Wikipedia:

In accounting, an accretion expense is a periodic expense recognized when updating the present value of a balance sheet liability, which has arisen from a company’s obligation to perform a duty in the future, and is being measured by using a discounted cash flows (“DCF”) approach.

I treated accretion as a real expense; however ,”interest on accretion on provisions” seems to be a different category. From the Internet: 

Accreted Interest means Interest accrued on a Loan that is added to the principal amount of such Loan instead of being paid as it accrues.

Accrued interest seems to form part of the surplus value at the macro or aggregate level and hence is treated accordingly. 

I had some initial problems when dealing with the category “Employee defined benefit plans net interest.” I debated whether it should form part of variable capital (wages, if you like) since presumably it was used to fund Telus workers’ pension, or whether it should form part of surplus value produced since it presumably was interest paid on meeting pension fund liabilities. I opted for treating it as part of surplus value rather than variable capital. I used an analogy: if a capitalist borrowed money to pay wages and salaries, and had to pay interest, then the interest paid would be derived from surplus value produced. 

I treat the category “Foreign exchange losses” as a real expense. If there are reasons for treating it as part of surplus value, feel free to provide such reasons. I certainly would like to make the calculations of the rate of exploitation as accurate as possible.

In relation to the category “Interest income,” in the annual report, is accurately depicted as income (and hence is not really an expense) and is therefore in parentheses (it is subtracted from financing costs or expenses, or reduces the level of expenses). Hence, this way of presenting interest income is identical to the way it really is at the macro level–as income. Accordingly, I treat it as part of surplus value and actually add it to the other forms of interest.

Interest charges considered part of surplus value

Interest on long-term debt, excluding lease liabilities – gross 676
Interest on lease liabilities 70
Interest on short-term borrowings and other 5
Interest accretion on provisions 16
Long-term debt prepayment premium 18
Employee defined benefit plans net interest 16
Interest income 7
Total: 808

With these adjustments, real financing costs are as follows:

Adjudged Financing costs or expenses 

Interest on long-term debt, excluding lease liabilities – capitalized (37)
Foreign exchange losses 14

Total adjusted financing costs or expenses 51

If we subtract 51 from 808, we obtain 757, which is considered additional surplus value

Total Revenue Adjustments and Final Adjustment 

The adjustments in financing costs or expenses to 757 (808-51=757) means that this amount is shifted to the category “Temporarily adjusted income before income taxes.” Accordingly, we have the following final amounts that are relevant for establishing the rate of exploitation of Telus workers:

Final adjusted Income before income taxes (surplus value (s) $2485.3 million or $2.4853 billion 
Final adjusted total labour costs (variable capital (v) $4258.7

The Rate of Exploitation 

The rate of exploitation or the rate of surplus value=s/v=2485.3/4258.7=58%.

That means that for every hour worked that produces her/his wage, a worker at Telus works around an additional 35 minutes for free for Telus. Alternatively, in terms of money, a regular Telus worker who receives $1 of wage or salary produces $0.58 surplus value or profit for free. 

The length of the working day at Telus varies somewhat, but less so than for some other employers. According to one collective agreement, the basic working day is 7.5 hours and the working week is 37.5 hours: 

Basic Hours of Work

A5.03 (a) (i)

The basic hours of work per day for a Regular full-time employee will be 7.5 hours. The basic hours of work per week for a Regular full-time employee will be 37.5 hours over one (1) week or 75 hours over two (2) weeks provided that in any given calendar week, basic hours of work will be assigned on consecutive days, unless another arrangement is mutually agreed to by the employee and management. Notwithstanding the above, in any given calendar week, up to 20% of the Regular full-time employees in an appropriate work group may be assigned to a work week in which the basic hours are not scheduled on consecutive days. 

Searching on the Internet, I also found the following:

They are good, but capped at 37.5 hrs/week which is entirely reasonable.

Flexible 9-5

Assuming either a 7.5 hour working day  or an 8 hour working day: 

  1. In a 7.5- hour working day (450 minutes), a Telus worker produces her/his wage in about 285 minutes (4 hours 45 minutes) and works 165 minutes ( 2 hours 45 minutes) for free for Telus. 
  2. In an 8-hour working day (480 minutes), a Telus worker produces her/his wage in about 304 minutes (5  hours 4 minutes) and works 176 minutes (2 hours 56 minutes) for free for Telus. 

Of course, during the time that the worker produces her/his own wage, s/he is subject to the power of management and hence is also unfree during that time (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation and Employers as Dictators, Part One).

Let us look at the management rights clause of the collective agreement between Telus and United Steel Workers (USW) Local 1944 (Telecommunications Workers Union Local 1944), for the period between November 27, 2016 and December 31, 2021.

From page 6 of the collective agreement:

ARTICLE 8 – MANAGEMENT RIGHTS
8.01  Unless otherwise explicitly agreed to in this Agreement, management retains the
exclusive right to manage its operations in all respects including the direction of the
working forces. The Company agrees that any exercise of these rights shall not
contravene the provisions of this Agreement.

8.02  Management and excluded employees shall not normally do bargaining unit work, unless
such work has traditionally been performed by management and excluded employees.

8.03  Although not normal operating practice, occasions may arise when management and
excluded employees may perform bargaining unit work for reasons of training, on-going
familiarization, emergency, other unforeseeable or unpreventable circumstances, or the
correction of minor deficiencies on a customer’s premises which can be completed within
fifteen (15) minutes in the normal course of management performing quality inspections.
No Regular employees will lose their employment as a result of management and
excluded employees performing bargaining unit work for the aforementioned reasons.

8.04  While managers will attempt as far as possible to assign an employee to work for which
the employee has been trained, no part of this Agreement shall be construed as meaning
that an employee shall do only work of the classification for which they are employed, nor
shall any part of this Agreement be construed as meaning that certain work shall be
performed by only certain classified employees.

This management rights clause at least sets explicit limits on the right of management to engage in certain kinds of work reserved for union members–a superior managements rights clause that workers could be used to harass management under certain circumstances (as we did in the brewery in Calgary where I worked–the collective agreement had a similar limiting clause that enabled us to monitor the actions of foremen if they pressured us too much).

Nonetheless, despite the explicit limits on the right of management, the general power of management to direct operations as it sees fit and thus to use workers for purposes over which workers have little say remains intact.

Not only does the collective agreement give management the right to direct workers’ lives in many, many ways in such a fashion that they produce more value than they themselves cost, leading to the workers working for free for a certain period of time, but even during the time when they produce the value of their own wage, they are subject to the dictates of management (see The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation).

Ideologues of unions and social democrats or social reformers simply ignore this double situation of workers–of having to work for free and having to work throughout the day under the power of unelected managers (see Employers as Dictators, Part One).

Given this conclusion, how can any collective agreement express in any way the cliches used by many ideologues of unions–such as “fair contracts,” or “decent work?” Is it possible for a collective agreement to be fair from the workers’ point of view? It is certainly possible to be fairer, of course, but no collective agreement questions the right of employers and their representatives (management) to exploit workers and to use them for purposes foreign to their own lives.