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 the Workers of the Royal Bank of Canada (RBC), One of the Largest Private Employers in Toronto and 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 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 ), among others.

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 if they are available in order to calculate the rate of exploitation at a more local level.

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 RBC workers is s/v; therefore, s/v is 16,903/13,611=124 percent.

This means that, in terms of money, $1 of wage or salary of a regular bank worker results in $1.24 cn surplus value or profit for free (calculated on the basis of the procedure outlined in the post on the rate of exploitation of CIBC bank workers). Alternatively, for every hour worked, a Royal Bank of Canada worker works 74 minutes (or 1 hour 14 minutes) for free for RBC.

It also means the following:

  1. For a 5.75- hour working day (345 minutes), RBC workers spend 154 minutes (2 hours 34 minutes) to obtain their wage for the day, and they spend 191 minutes (3 hours 11 minutes) in obtaining a surplus value or profit for CIBC.
  2. For a six-hour working day, follow the same procedures as above, but replace 345 by 360: result: in a 6-hour working day, RBC workers spend 161 minutes to obtain their wage for the day, and they spend 199 minutes in obtaining a surplus value or profit for RBC.
  3. 7-hour working day: 420 minutes:i n a 7-hour working day, RBC workers spend 188 minutes to obtain their wage for the day, and they spend 232 minutes in obtaining a surplus value or profit for RBC.
  4. 7.5-hour working day: 450 minutes: in a 7,5-hour working day, RBC workers spend 201 minutes to obtain their wage for the day, and they spend 249 minutes in obtaining a surplus value or profit for RBC.
  5. 8-hour working day: 480 minutes: in an 8-hour working day, RBC workers spend 214 minutes to obtain their wage for the day, and they spend 266 minutes in obtaining a surplus value or profit for RBC.
  6. 10-hour working day: 600 minutes: in a 10-hour working day, RBC workers spend 268 minutes to obtain their wage for the day, and they spend 332 minutes in obtaining a surplus value or profit for RBC.

As in the post for the determination of the rate of exploitation of workers at Canadian Imperial Bank of Commerce, I have the same questions for social democrats.

Royal Bank workers do not belong to a union. Would their becoming unionized turn their situation into one where they had a “fair contract,” “decent wages,” 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,” “decent wages” 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

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 by has undoubtedly reinforced social-reformist tendencies.

In millions of Canadian dollars:

Total revenue $ 46,002
Provision for credit losses (PCL) 1,864
Insurance policyholder benefits, claims and acquisition expense (PBCAE) 4,085
Non-interest expense 24,139 [add the first three: 1,864+4,085+24,139=30,088; subtract this from 46,002 gives you 15,914)
Income before income taxes 15,914

Provision for credit losses is explained in Investopedia (James Chen (2019) as:

The provision for credit losses (PCL) is an estimation of potential losses that a company might experience due to credit risk. The provision for credit losses is treated as an expense on the company’s financial statements. They are expected losses from delinquent and bad debt or other credit that is likely to default or become unrecoverable. If, for example, the company calculates that accounts over 90 days past due have a recovery rate of 40%, it will make a provision for credit losses based on 40% of the balance of these accounts.

It is an expense in the sense that loans and other financial services may lead to defaults, or it may be due to the decreased value of collateral for such loans and it is an estimate of the loss of revenue due to defaults. It is therefore subtracted from total (or gross) revenue.

RBC issues insurance in various areas, and the category of “PBCAE” reflects expenses associated with fulfilling its obligations in paying out for insurance policies. It too is subtracted from total revenue.

In the annual report, the category of “Non-interest expenses” is subtracted from total revenue, to yield the category “Income before income taxes.” 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 (before adjustments)

(Millions of Canadian dollars)
Human resources $ 14,600
Salaries $ 6,600
Variable compensation 5,706
Benefits and retention compensation 1,876
Share-based compensation 418
Equipment 1,777
Occupancy 1,635
Communications 1,090
Professional fees 1,305
Amortization of other intangibles 1,197
Other 2,535
Total non-interest expense $ 24,139

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 issues are related to the category “Human resources.” The category “Variable compensation” is difficult to determine. Should it be categorized as part of salaries or as part of surplus value? Without more information, it is impossible to tell how much is received due to exploitation of regular bank workers and how much is due to being exploited by management. It can, however, be assumed that some of the compensation is due to the exploitation ow regular bank workers. For example, in the proxy circular of the RBC, it is stated (page 52):

A significant portion of variable compensation (at least 70% for the CEO, at least 65% for members of group executive and at least 40% for other material risk takers) is deferred with a vesting period of three or four years, consistent with our compensation principles and relevant regulatory guidelines.

The guidelines used are based on the Financial Stability Board standards (FSB standards). On page 3 of FSB Principles for Sound Compensation Practices: Implementation Standards (2009), it is stated:

Subdued or negative financial performance of the firm should generally lead to a considerable contraction of the firm’s total variable compensation, taking into account both current compensation and reductions in payouts of amounts previously earned…

Accordingly, as in the case of another Canadian bank (CIBC), I have decided to allocate 10 percent of such variable compensation to surplus value or profit and the rest to wages and benefits.

Of course, I may be wrong. Variable compensation for bank workers could be directly tied to the number of hours worked (just as the level of income varies for workers who work by the piece is tied to the number of hours worked and to the intensity of the work). However, counterarguments (and, perhaps, further data) would have to be provided to justify including it as part of “Human resources.”

On the other hand, the category “Benefits and Retention Compensation” is probably, for the most part, costs for employing bank workers and therefore should be included in calculating variable capital. Benefits include such items as

medical; prescription drug; dental; life and accident insurance; and short-term and long-term
income protection. Employees also have access to a number of health and wellness initiatives including our Employee Care program, which provides 24 hour a day access to information and confidential consultation on a wide range of work/life issues.

The category “Share-based compensation” is limited “to certain key employees and to our non-employee directors.” These are probably not “salaries” as payment for working at RBC but form part of compensation for exploiting the rest of the workers at RBC. Unlike the “Performance-based compensation” category in the case of the Canadian Imperial Bank of Commerce (CIBC), this category seems independent of work-based compensation. Hence, I include “Share-based compensation” as part of surplus value (s).

Treating share-based compensation purely as surplus value increases the total “Income before income taxes” results in a greater level of adjustment than was the case for the calculations for CIBC and TD Bank workers, but it perhaps reflects a more accurate calculation of surplus value obtained since it involves a somewhat more detailed categorization of the distribution of compensation.

I accept the other categories without adjustments (unless someone can provide reasons for adjusting them).

Ten percent of the amount in the category “Variable compensation”(ten percent of 5,706=571)) and “Share-based compensation” (418) are added to the revenue category “Income before income taxes,” (15,914) to yield the following accounts:

Adjusted Results

Income before income taxes (surplus value or s): 16,903

Human resources (total variable capital, or total v) $ 13, 611
Salaries $ 6,600
Variable compensation 5, 135
Benefits and retention compensation 1,876

The Rate of Exploitation of RBC Workers

The rate of exploitation or the rate of surplus value is s/v; therefore, s/v is 16,903/13,611=124 percent.

This means that, in terms of money, $1 of wage or salary of a regular bank worker results in $1.24 cn surplus value or profit for free (calculated on the basis of the procedure outlined in the post on the rate of exploitation of CIBC bank workers). Alternatively, for every hour worked, a Royal Bank of Canada worker works 74 minutes (or 1 hour 14 minutes) for free for RBC.

To translate this into the number of hours RBC workers work free for RBC and how many hours they would have produced an equivalent value to their own cost of production (if they worked in a sector that produced value rather than just transferred it), to it would be necessary to know the length of time that they work per day, or the length of the working day. Unfortunately, I was unable to find that information. Consequently, I used the information I found on the length of the working day for the workers at the Canadian Imperial Bank of Commerce (CIBC).

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

8 hours a day

Work hours are manageable and flexible. The company is accommodating with every schedule.

They vary – just like it does anywhere.

8 hours in a day, 1 hour for break and lunch.

8-10 hours

I work 7.5 hours each day.

6 – 5.75 hours a day, 4 days a week. for the last 1.5 years

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 5.75- hour working day (345 minutes), RBC workers spend 154 minutes (2 hours 34 minutes) to obtain their wage for the day, and they spend 191 minutes (3 hours 11 minutes) in obtaining a surplus value or profit for RBC.
  2. For a six-hour working day, follow the same procedures as above, but replace 345 by 360: result: in a 6-hour working day, RBC workers spend 161 minutes to obtain their wage for the day, and they spend 199 minutes in obtaining a surplus value or profit for RBC.
  3. 7-hour working day: 420 minutes: in a 7-hour working day, RBC workers spend 188 minutes to obtain their wage for the day, and they spend 232 minutes in obtaining a surplus value or profit for RBC.
  4. 7.5-hour working day: 450 minutes: in a 7,5-hour working day, RBC workers spend 201 minutes to obtain their wage for the day, and they spend 249 minutes in obtaining a surplus value or profit for RBC.
  5. 8-hour working day: 480 minutes: in an 8-hour working day, RBC workers spend 214 minutes to obtain their wage for the day, and they spend 266 minutes in obtaining a surplus value or profit for RBC.
  6. 10-hour working day: 600 minutes: in a 10-hour working day, RBC workers spend 268 minutes to obtain their wage for the day, and they spend 332 minutes in obtaining a surplus value or profit for RBC.

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 CIBC to control their working lives in order to obtain surplus value or profit.

As in the post for the determination of the rate of exploitation of workers at Canadian Imperial Bank of Commerce, I have the same questions for social democrats.

RBC workers do not belong to a union. Would their becoming unionized turn their situation into one where they had a “fair contract,” “decent wages” 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,” “decent wages” 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 Toronto-Dominion Bank (TD Bank), 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. I also calculated 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 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=s= $13,570
Adjusted total salaries and employee benefits=v=$10,997

The rate of exploitation or the rate of surplus value of Toronto Dominion Bank workers is =s/v=13,570/10,997=123 percent.

That means that for every hour worked that is equivalent to her/his wage, a worker at TD Bank works around an additional 74 minutes for free for TD Bank. Alternatively, this means that, in terms of money, $1 of wage or salary of a regular TD Bank worker results in $1.23 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).

It also means the following (I use minutes as well as hours):

  1. For a 6.5 hour working day (390 minutes), TD Bank workers spend 174 minutes (2 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 TD Bank.
  2. For a 7.5 hour working day (450 minutes), TD Bank workers spend 201 minutes (3 hours 21 minutes) to obtain their wage for the day, and they spend 249 minutes (4 hours 9 minutes) in obtaining a surplus value or profit for TD Bank.
  3. For an 8-hour working day (480 minutes), TD Bank workers spend 214 minutes (3 hours 34 minutes) to obtain their wage for the day, and they spend 266 minutes (4 hours 26 minutes) in obtaining a surplus value or profit for TD Bank.
  4. For an 8.5 hour working day (510 minutes), TD Bank workers spend 228 minutes (3 hours 48 minutes) to obtain their wage for the day, and they spend 282 minutes (4 hours 42 minutes) in obtaining a surplus value or profit for TD Bank.
  5. For a 9-hour working day (540 minutes), TD Bank workers spend 241 minutes (4 hours 1 minute) to obtain their wage for the day, and they spend 299 minutes (4 hours 59 minutes) in obtaining a surplus value or profit for TD Bank.
  6. For a 10-hour working day (600 minutes), TD Bank workers spend 268 minutes (4 hours 28 minutes) to obtain their wage for the day, and they spend 332 minutes (5 hours 32 minutes) in obtaining a surplus value or profit for TD Bank.
  7. For a 17-hour working day (1020 minutes), TD Bank workers spend 455 minutes (7 hours 35 minutes) to obtain their wage for the day, and they spend 565 minutes (9 hours 25 minutes) in obtaining a surplus value or profit for TD Bank.

TD Bank 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

The annual report has both statistics on revenue and expenses, but there are also reported statistics in the annual report modified by an adjustment that is specific to the Toronto Dominion Bank; the adjustment in the annual report is not a standard adjustment. I have omitted any reference to such an adjustment since it would probably make the posts on the rate of exploitation in other posts less comparable.

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 15:

(millions of Canadian dollars, except where noted) 2019
Results of operations
Total revenues $ 41,065
Provision for credit losses $3,029
Insurance claims and related expenses $2,787
Non-interest expenses $22,020
Income before income taxes and equity in net income of an investment in TD Ameritrade $13,229

Page 23:

NON-INTEREST EXPENSES

Salaries and employee benefits
Salaries $ 6,879
Incentive compensation 2,724
Pension and other employee benefits 1,641
Total salaries and employee benefits 11,244

Occupancy
Rent 944
Depreciation and impairment losses 405
Other 486
Total occupancy 1,835

Equipment
Rent 245
Depreciation and impairment losses 200
Other 720
Total equipment 1,165

Amortization of other intangibles 800
Marketing and business development 769
Restructuring charges 175
Brokerage-related fees 336
Professional and advisory services 1,322
Other expenses 4,374 }

Total expenses $ 22,020

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.

Before entering into the issue of adjustments according to Marxian theory, however, it is necessary to address one of the categories that I did not include in the above calculation. It is a reference to Income before income taxes and equity in net income of an investment in TD Ameritrade,” which is equal to the $13.229 billion reported above. The inclusion of the term “equity” seems to refer to assets, but the following led me to believe that it was referring to net income rather than to assets as such (https://seekingalpha.com/news/3507506-td-bank-expects-230m-net-income-from-td-ameritrade-in-q4):

TD Bank expects ~$230M net income from TD Ameritrade in Q4

TD Bank Group (NYSE:TDexpects TD Ameritrade’s fiscal Q4 net earnings to translate to ~C$301M (~US$230M) reported equity in net income of an investment in fiscal Q4.

I therefore leave the category “Income before income taxes and equity in net income of an investment in TD Ameritrade” as is, except that I shorten it now to just “Income before income taxes.”

In the annual report, the category of “Non-interest expense” is subtracted from total revenue, to yield the category “Income before income taxes.” 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.”

In the category “Salary and employee benefits,” there is the subcategory “Incentive compensation.” A one-page TD document indicates what this involves for all employees:

TD’s Approach to Compensation

TD provides employees with a comprehensive total rewards package that includes a combination of base salary, incentive compensation, benefits, and retirement and savings plan

Further, for executives:

Executive Compensation

We have a balanced approach to executive compensation that is intended to attract, retain and motivate high-performing executives to create sustainable value for shareholders over the long term. … This compensation is tied to the bank’s share price and promotes decision-making that is in
the best long-term interests of the bank and its stakeholders.

There is thus additional compensation called incentive compensation, but the issue is whether such additional compensation is a result of workers being exploited or exploiting workers.

As I wrote in the post on the exploitation of Canadian Imperial Bank of Commerce (CIBC) workers:

Most employees, whether executive or not, seem to be eligible to some support of bonus as a function of performance. 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.

Without further information, it is impossible to determine the proportion that is derived from exploiting bank workers and being exploited. I will assume, as I did in the case of the CIBC, that 10 percent of the “Incentive compensation” originates from the exploitation of TD bank workers. This 10 percent is equal to $247 million and must be subtracted from the subcategory “Total salaries and employee benefits” and added to the category “Income before income taxes.”

Another expense category is also relevant for making adjustments–the category “Rent.” 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 $94 million and must be subtracted from the subcategory and added to the category “Income before income taxes.”

Adding $94 million to $247 million gives $341 million.

“Income before income tax” must thus be increased by $341 million, and “Total salaries and employee benefits” must be decreased by $247 million.

This gives us the following:

Adjusted Results

Adjusted income before income taxes $13,570
Adjusted total salaries and employee benefits $10,997

The Rate of Exploitation of TD Bank Workers

To calculate the rate of surplus value, we need to relate “Income before income taxes” to “Total salaries and employee benefits.” So, with the adjustments in place:, s=13,570; v=10,997. The rate of exploitation or the rate of surplus value=s/v=13,570/10,997=123 percent.

That means that for every hour worked that produces her/his wage, a worker at TD Bank works around an additional 74 minutes for free for TD Bank.

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

I worked 7.5 hrs each day, some overtime is required. but not so often.

I normally am scheduled to work 8 1/2 hours a day Monday to Thursday. On fridays i am scheduled for 6 1/2.

It depends on the activity but can vary from 10 hours to 17+ hours

8 hours a day

Nine hours

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 6.5 hour working day (390 minutes), TD Bank workers spend 174 minutes (2 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 TD Bank.
  2. For a 7.5 hour working day (450 minutes), TD Bank workers spend 201 minutes (3 hours 21 minutes) to obtain their wage for the day, and they spend 249 minutes (4 hours 9 minutes) in obtaining a surplus value or profit for TD Bank.
  3. For an 8-hour working day (480 minutes), TD Bank workers spend 214 minutes (3 hours 34 minutes) to obtain their wage for the day, and they spend 266 minutes (4 hours 26 minutes) in obtaining a surplus value or profit for TD Bank.
  4. For an 8.5 hour working day (510 minutes), TD Bank workers spend 228 minutes (3 hours 48 minutes) to obtain their wage for the day, and they spend 282 minutes (4 hours 42 minutes) in obtaining a surplus value or profit for TD Bank.
  5. For a 9-hour working day (540minutes), TD Bank workers spend 241 minutes (4 hours 1 minute) to obtain their wage for the day, and they spend 299 minutes (4 hours 59 minutes) in obtaining a surplus value or profit for TD Bank.
  6. For a 10-hour working day (600 minutes), TD Bank workers spend 268 minutes (4 hours 28 minutes) to obtain their wage for the day, and they spend 332 minutes (5 hours 32 minutes) in obtaining a surplus value or profit for TD Bank.
  7. For a 17-hour working day (1020 minutes), TD Bank workers spend 455 minutes (7 hours 35 minutes) to obtain their wage for the day, and they spend 565 minutes (9 hours 25 minutes) in obtaining a surplus value or profit for TD Bank.

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 TD Bank to control their working lives in order to obtain surplus value or profit.

TD Bank 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.

Striking Brewery Workers and a Fair Deal or Contract (Collective Agreement): The Impossible Dream

I thought it might be useful to paste a short conservation I had on Facebook concerning locked-out brewery workers:

February 26 2021 at 1:50 p.m.

 

Thank you to everyone who has shown support for us during this lockout.
As essential workers, we were pretty shocked to be put out on the street since bargaining was progressing. Your solidarity is very important to us and will help us get back to the table with Molson Coors to negotiate a fair deal[my emphasis] for all of our members.

 

Keep the solidarity coming!

 

What is a fair deal? How can any collective agreement express a fair deal when workers (including brewery workers) are used as things for other people’s benefits?

 

 

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Author
Fred Harris

 i hear you, a fair deal would be a planned economy and a transition to socialism, but workers need means to keep from pauperization between revolutionary upsurges. I would also tend to think worker associations would still be relevant in a communist society to advocate for specific industries and sectors. But you are definitely hitting on something.

The issue is not that workers need to construct organizations of defense against the rapacious and oppressive power of employers; of course they need to do so. The issue is: Why is it that the reps in such defensive organizations time after time then turn around and claim that defensive measures (such as a collective agreement) are then idealized by claiming that all workers want is a fair contract.
On my blog recently, I posted a collection of quotes from CUPE reps that claimed that collective agreements were fair. I will, in the future, find and post similar claims by the next largest union–Unifor.

 

Socialists need to constantly criticize such idealization of collective agreements since fairness cannot be achieved in such terms.; it is an illusion.

 

Collective agreements are, certainly, in general better than no collective agreement–but fairness is not one of their characteristics.

 

Unless of course the implicit or explicit management clause is also fair–which requires workers to follow orders and transfer some of their decision-making power to the employer and reps of the employer. I have also provided on my blog many examples of management clauses that specify the general power of management in relation to work and workers.

The Rate of Exploitation of the Workers of Rogers Communications Inc., 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.

Income before income tax expense s=$3.773 billion or $3773.5 million and
Employee salaries, benefits, and stock-based compensation v=$1.8045 billion or $1804.5 million

The rate of exploitation or the rate of surplus value=s/v=3773.5/1804.5=209%.

That means that for every hour worked that produces her/his wage, a worker at Rogers Communications works around an additional 125 minutes or 2 hours 5 minutes for free for Rogers Communications. Alternatively, in terms of money, $1 of wage or salary of a regular Rogers Communications worker produces $2.09 surplus value or profit for free. 

  1. In a 4.5-hour work day (270 minutes), the worker produces her/his wage in about 87 minutes (1 hour 27 minutes) and works 183 minutes (3 hours 3 minutes) for free for Rogers Communication.
  2. In a 7.5-hour work day (450 minutes), the worker produces her/his wage in about 146 minutes (2 hours 26 minutes) and works 304 minutes (5 hours 4 minutes) for free for Rogers Communications.
  3. In an 8-hour work day (480 minutes). the worker produces her/his wage in about 155 minutes (2 hours 35 minutes) and works 325 minutes (5 hours 25 minutes) for free for Rogers Communications.
  4. In an 10-hour work day (600 minutes). the worker produces her/his wage in about 194 minutes (3 hours 14 minutes) and works 406 minutes (6 hours 46 minutes) for free for Rogers Communications.

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? 

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:

The data are taken from Rogers Communications Inc. Annual Report.

Total revenue 15,073

Operating Expenses

Operating Costs

Cost of equipment sales 2,254
Merchandise for resale 242
Other external purchases 4,360
Employee salaries, benefits, and stock-based compensation 2,005

Total operating costs 8,861
Depreciation and amortization 2,488
Restructuring, acquisition and other 139

Total operating expenses 11,488
Finance costs 840

Interest on borrowings  746
Interest on post-employment benefits liability  11
Interest on lease liabilities  61
Capitalized interest (19)
Loss on repayment of long-term debt 19
(Gain) loss on foreign exchange (79)
Change in fair value of derivative instruments 80
Other 21

Total finance costs 840
Other income  (10)
Income before income tax expense 2,755

Total revenue therefore=11,488+840-10+12,318+2,755=15,073 (as above)

To calculate the rate of surplus value, the key categories are “Employee salaries, benefits, and stock-based compensation,” which is equivalent to wages/salaries (=v) and “Income before income tax expense” (surplus value (s) or profit).

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 Stock-Based Compensation

The subcategory “stock-based compensation” in the category “Employee salaries, benefits, and stock-based compensation” includes two further subcategories (sub-sub categories, so to speak): 1. Options to purchase Class B Non-Voting Shares on a one-for-one basis (granted to employees, directors, and officers) and 2. Performance options (granted to certain key executives). It may seem unnecessary to adjust for the second sub-sub category since there were ” nil performance-based options” in 2019. However, there are at least two reasons for making adjustments. Firstly, payment for some of the stock-based compensation is due to stock-based compensation acquired in previous years: “These options vest on a graded basis over four years provided that certain targeted stock prices are met on or after each anniversary date. As at December 31, 2019, we had 1,068,776 performance options outstanding.”

Secondly, some of the stock options  in the first sub-sub category are based on “performance-based options” on the part of middle and senior management: “We granted 180,896 performance-based RSUs [restricted share units] to certain key executives in 2019.” 

I use the following logic from my post on the rate of exploitation of Canadian Imperial Bank of Commerce Workers to justify shifting 10 percent of the amount from the category ” (I change the wording slightly to make the quote apply to Rogers Communications workers): 

Most employees, whether executive or not, seem to be eligible to some support of bonus as a function of performance. 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 “Stock-based compensation” is divided into two parts: one part is a function of the number of hours worked as well as the intensity of that work by regular employees; the other is based on the extent to which managers and senior executives are successful in exploiting those regular employees. 

It is impossible to determine the proportion of stock options that form part of salaries and bonuses that represent the exploitation of Rogers Communications regular workers. 

It is probably reasonable to assume that a minimum of 10 percent of the “Stock-based compensation” comes from the exploitation by middle and senior Rogers Communications 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, this means that 10 percent of the total “Stock-based compensation is reduced by 10 percent, or $200.5 million dollars, and that amount is added to “Income before income tax expense.” This gives, so far: 

Employee salaries, benefits, and stock-based compensation $1804.5 billion
Income before income tax expense $2955.5 billion

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 benefits liability,” from the point of view of Rogers Communications, it is an expense or cost because, presumably, Rogers Communications 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.

I treat the category “Interest on lease liabilities” like other interest categories: it is paid out of the surplus value produced by Rogers Communications workers.

The interest charges so far that must be subtracted from “Finance costs” and added to “Income before income tax expense” is $818 million. 

That leaves $22 million for Finance Costs so far. 

As I explained on my post on the rate of exploitation of Air Canada 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 from “Finance Costs” (as the accountants have done). Whether that it is legitimate I will leave for those who more adequately understand modern accounting principles and their relation to Marxian economics. I have found no guidance in the literature so far to aid me in dealing with such issues. 

The three categories, “Loss on repayment of long-term debt,” “(Gain) loss on foreign exchange,” and
“Change in fair value of derivative instruments” seem to have nothing directly to do with interest payments and therefore I leave them as part of “Finance Costs.”

Since the category “Other” remains unspecified, I also leave it as part of “Finance Costs.”

Accordingly, adjusted Finance Costs are:

Adjusted Finance Costs

Loss on repayment of long-term debt 19
(Gain) loss on foreign exchange (79)
Change in fair value of derivative instruments 80
Capitalized interest (19)
Other 21

Total finance costs 22

The category “Other income” is somewhat misleading since, in a note, the category is really “Other (income) expense.” The subcategories are as follows: 

Losses from associates and joint ventures 18 
Other investment income (35) 
Total other income (10)

The $10 million is actually additional investment income, but since it is placed in an expense category, it is put into parentheses. Normally, when an amount is placed in parentheses, it is subtracted, but since it is additional income rather than an expense, it is added. It therefore is already accounted for in the original “Income before income tax expense,” it is already accounted for. 

The remaining 818 in so-called finance costs (which are hidden surplus value) are transferred to the adjusted “Income before income tax expense” category, so that the adjustment for the total of the category is 2,955.5.+818=3773.5. 

So, with the adjustments in place:

Income before income tax expense s=$3.773 billion or $3773.5 million and
Employee salaries, benefits, and stock-based compensation v=$1.8045 billion or $1804.5 million

The Rate of Exploitation

The rate of exploitation or the rate of surplus value=s/v=3773.5/1804.5=209%.

That means that for every hour worked that produces her/his wage, a worker at Rogers Communications works around an additional 125 minutes or 2 hours 5 minutes for free for Rogers Communications. Alternatively, in terms of money, $1 of wage or salary of a regular Rogers Communications worker produces $2.09 surplus value or profit for free. 

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

  1. 7 days a week. 32 hours a week.
  2. Varying 8hr shifts depending on dept. two paid 15 minutes break and 30mins unpaid lunch
  3. 37.5 a week
  4. 7.5 to 8 hrs
  5. 8 – 10 hours per day depending on projects etc. There is a great deal of flexibility in how you work
  1. In a 4.5-hour work day (270 minutes), the worker produces her/his wage in about 87 minutes (1 hour 27 minutes) and works 183 minutes (3 hours 3 minutes) for free for Rogers Communication.
  2. In a 7.5-hour work day (450 minutes), the worker produces her/his wage in about 146 minutes (2 hours 26 minutes) and works 304 minutes (5 hours 4 minutes) for free for Rogers Communications.
  3. In an 8-hour work day (480 minutes). the worker produces her/his wage in about 155 minutes (2 hours 35 minutes) and works 325 minutes (5 hours 25 minutes) for free for Rogers Communications.
  4. In an 10-hour work day (600 minutes). the worker produces her/his wage in about 194 minutes (3 hours 14 minutes) and works 406 minutes (6 hours 46 minutes) for free for Rogers Communications.

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? 

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

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:

Income before income taxes: $6,656=s
Employee compensation and benefits: $5,539=v

The rate of exploitation or the rate of surplus value is s/v; therefore, s/v is 6,656/5,539=120 percent.

This means that, for every hour worked that enables her/his to obtain a wage, a CIBC worker works 72 minutes (or 1 hour 12 minutes) for free for CIBC. Alternatively, in terms of money, $1 of wage or salary of a regular bank worker results in $1.20  surplus value or profit for free.

  1. in a 5.75 hour working day, CIBC workers spend 157 minutes (2 hours 37 minutes) to obtain their wage for the day, and they spend 188 minutes (3 hours 8 minutes) in obtaining a surplus value or profit for CIBC.
  2. For a six-hour working day, follow the same procedures as above, but replace 345 by 360: result: in a 6-hour working day, CIBC workers spend 164 minutes to obtain their wage for the day, and they spend 196 minutes in obtaining a surplus value or profit for CIBC.
  3. 7-hour working day: 420 minutes: in a 7-hour working day, CIBC workers spend 191 minutes to obtain their wage for the day, and they spend 229 minutes in obtaining a surplus value or profit for CIBC.
  4. 7.5-hour working day: 450 minutes: in a 7,5-hour working day, CIBC workers spend 205 minutes to obtain their wage for the day, and they spend 245 minutes in obtaining a surplus value or profit for CIBC.
  5. 8-hour working day: 480 minutes: in an 8-hour working day, CIBC workers spend 218 minutes to obtain their wage for the day, and they spend 262 minutes in obtaining a surplus value or profit for CIBC.
  6. 10-hour working day: 600 minutes: in a 10-hour working day, CIBC workers spend 273 minutes to obtain their wage for the day, and they spend 327 minutes in obtaining a surplus value or profit for CIBC.

CIBC 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:

Revenue:  $18,611

Net interest income $ 10,551
Non-interest income $8,060

Provision for credit losses $1,286
Non-interest expenses $10,856

Employee Compensation and Benefits:

Salaries: $3,081
Performance-based compensation: $1,873
Benefits: $772

Total employee compensation: $5,726

Other expenses:

Occupancy costs:  $892
Computer, software and office equipment: $1,874
Communications: $303
Advertising and business development: $359
Professional fees: $226
Business and capital taxes: $110
Other: $1,366

Total other expenses: $5,130

Income before income taxes (Revenue minus provision for losses minus non-interest expenses): $6,469 ($18,611-$1,286-$10,856=$6,469).

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.

It is necessary, however, to make adjustments on the revenue side; From  https://www.payscale.com/research/CA/Employer=Canadian_Imperial_Bank_of_Commerce_(CIBC)/Bonus :

How much does Canadian Imperial Bank of Commerce (CIBC) pay in bonuses?

Canadian Imperial Bank of Commerce (CIBC) pays an average of C$4,962 in annual employee bonuses. Bonus pay at Canadian Imperial Bank of Commerce (CIBC) ranges from C$1,014 to C$30,521 annually among employees who report receiving a bonus. Employees with the title Information Technology (IT) Director earn the highest bonuses with an average annual bonus of C$30,521. Employees with the title Customer Service Representative (CSR) earn the lowest bonuses with an average annual bonus of C$1,014.

Although there is no direct evidence to indicate whether such bonuses form part of “Performance-based compensation,” there is indirect evidence.

Bloomberg notes the following (https://www.bnnbloomberg.ca/canada-s-bankers-face-the-bleakest-bonus-year-in-almost-a-decade-1.1358606):

The Canadian banks pay bonuses based on performance, with most of the variable compensation going to capital-markets employees such as investment bankers, research analysts and those in sales and trading. …

Senior investment bankers will see a 10 per cent decline in compensation from last year, hurt by fewer financings and a decline in mergers-and-acquisitions activity, according to Vlaad & Co. Junior investment bankers will see little change in their payouts following three years of increases, while those in sales, trading and research will see compensation fall 15  per cent to 25  per cent, and fixed-income employees will face a similar decline, the firm said.

Most employees, whether executive or not, seem to be eligible to some support of bonus as a function of performance. 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. Evidence for such exploitation is indirect, via the level of compensation of some senior executives. For example, Victor Dodig, president and CEO,  received $9,017,000 in total compensation in 2019 (salary, $1,000,000; share-based awards, $4,806,420; option-based awards, $1,201,560; Non-equity GPS awards, $1,501,950; Pension value, $505,000; all other compensation, $2,250) (CIBC Proxy Circular 2020, page 79).

It is impossible to determine the proportion of bonuses that form part of salaries and bonuses that represent the exploitation of bank workers. Some facts may, however, be relevant. From   https://www.comparably.com/companies/cibc/executive-salaries:

The average CIBC executive compensation is $270,917 a year. The median estimated compensation for executives at CIBC including base salary and bonus is $253,828, or $122 per hour. At CIBC, the lowest compensated [executive] makes $52,000.

It is probable that even middle-level bank executives receive some surplus value or profit through the exploitation of regular bank workers. This means that part of their compensation is a function of how much work regular bank workers work for nothing or for free.

Given that the level of income for top executives is far beyond the level of income of even the lowest executive, as well as the fact that the average executive compensation is almost five times the level of the lowest executive (not even taking into account additional compensations for senior executives), it is probably reasonable to assume that a minimum of 10 percent of the “Performance-based compensation” comes from the exploitation by 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, or $187,300,000, and that amount is added to “Income before income taxes.” As a consequence, we have the following:

Adjusted Results

Income before income taxes: $6,656=s
Employee compensation and benefits: $5,539=v

The Rate of Exploitation of CIBC Workers

The rate of exploitation or the rate of surplus value is s/v; therefore, s/v is 6,656/5,539=120 percent.

This means that, in terms of money, $1 of wage or salary of a regular bank worker results in $1.20 cn surplus value or profit for free (calculated as follows–you can skip this calculation if not interested in how the result was obtained). Alternatively, for every hour worked, a CIBC worker works 72 minutes (or 1 hour 12 minutes) for free for CIBC.

  1. s/v=1.2
  2. multiplying  s/v and 1.2 by v (multiplying both sides by v does not change the equation), we have (s timesv)/v=1.2v;
  3. Dividing v by itself in the left-hand part of the equation in 2 above results in 1 (any number divided by itself except 0 is equal to 1, and any number multiplied by 1 is the same number), so we have: s=1.2v
  4. We can use this equation to calculate the division of the working day into time required to obtain the equivalent of the wage for workers at CIBC and the time they provide free of charge to obtain surplus value for CIBC.

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

8 hours a day

Work hours are manageable and flexible. The company is accommodating with every schedule.

They vary – just like it does anywhere.

8 hours in a day, 1 hour for break and lunch.

8-10 hours

I work 7.5 hours each day.

6 – 5.75 hours a day, 4 days a week. for the last 1.5 years

Evidently, the length of the working day varies for workers at CIBC. 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. I provide more detail for the calculation for the first one so that others can more easily calculate similar rates in the cities where they live.

  1. A 5.75- hour working day: 345 minutes;
  2. We can use this information to create an equation:
  3. v+s=345;
  4. We also have the equation s=1.2v from above;
  5. We can therefore replace, in equation 3 above, s by 1.2v since they are the same.
  6. We now have: v+1.2v=345;
  7. From 6, we have 2.2v=345
  8. Dividing both sides by 2.2 does not change the equation, so the result is: v=345/2.2=157 minutes (rounded to the nearest minute).
  9. Since v+s=345, we have 157+s=345;
  10. Subtracting 157from both sides does not change the equation, so now we have s=345-157=188 minutes
  11. So, in a 5.75 hour working day, CIBC workers spend 157 minutes (2 hours 37 minutes) to obtain their wage for the day, and they spend 188 minutes (3 hours 8 minutes) in obtaining a surplus value or profit for CIBC.
  12. For a six-hour working day, follow the same procedures as above, but replace 345 by 360: result: in a 6-hour working day, CIBC workers spend 164 minutes to obtain their wage for the day, and they spend 196 minutes in obtaining a surplus value or profit for CIBC.
  13. 7-hour working day: 420 minutes:i n a 7-hour working day, CIBC workers spend 191 minutes to obtain their wage for the day, and they spend 229 minutes in obtaining a surplus value or profit for CIBC.
  14. 7.5-hour working day: 450 minutes: in a 7,5-hour working day, CIBC workers spend 205 minutes to obtain their wage for the day, and they spend 245 minutes in obtaining a surplus value or profit for CIBC.
  15. 8-hour working day: 480 minutes: in an 8-hour working day, CIBC workers spend 218 minutes to obtain their wage for the day, and they spend 262 minutes in obtaining a surplus value or profit for CIBC.
  16. 10-hour working day: 600 minutes: in a 10-hour working day, CIBC workers spend 273 minutes to obtain their wage for the day, and they spend 327 minutes in obtaining a surplus value or profit for CIBC.

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 CIBC to control their working lives in order to obtain surplus value or profit. (I leave the issue of how banks exploit workers as consumers to others more competent to deal with the issue; the point here is to focus on the exploitation of bank workers as workers and not as consumers.)

CIBC 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 Pearson Survey of the 50,000 Employees at the Toronto International Airport: A Document Expressing the Ideology of Employers

The following is based on the report Understanding the Pearson workforce: Canada’s first airport workforce survey: Summary report, October 2019. The survey consists of a sample of 3,582 employees at the Toronto Pearson airport from a variety of positions, with the statistical expectation that these employees would be representative of the 50,000 workers who work at the airport.

Of course, since this report was written before COVID, the situation has changed at the airport, but it is still useful to look at the report.

The background to the survey expresses its limitations since it was initiated by the Greater Toronto Airport Authority GTAA).

The Greater Toronto Airports Authority (GTAA) is the operator of Pearson Airport.

The Greater Toronto Airports Authority (GTAA) is the operator of Pearson Airport.

The GTAA undertook a workforce survey—the first survey of its kind at any airport in Canada—to provide a baseline to understand more about the airport’s complex work environment, including who the workers are and how they get to their jobs. The information obtained from the survey will inform future work to identify gaps and support planning and programming to meet the airport’s transit and workforce needs. The survey was undertaken by Northstar Research Partners (Northstar) and developed in consultation with the Toronto Airport Workers Council (TAWC), a collective
of union representatives from across the airport that work together to address issues that impact airport workers.

The report was written with the support of the Peel-Halton Workforce Development Group and Northstar.

The GTAA is itself an employer. According to its Facebook web page, “The Toronto Airport Workers Council is committed to speaking up for workers at YYZ.” According to the Toronto Pearson web page, “The Toronto Airport Workers’ Council (TAWC) is the collective voice of Pearson’s 50,000 workers and its largest unions.”

Since the GTAA is an employer, its consultations, like consultations with union reps, expresses the power of employers to define issues and to express points of view that favour their interests–and not those of the working class. Given the power of the GTAA as a representative of employers as a whole at the Toronto Pearson Airport and its power as a particular employer, it is understandable that TAWC, in order to at least have some of its concerns recognized and perhaps addressed, decided to be a consultant  in the survey.

The report implicitly uses the standard of better paying, (unionized?), stable (permanent) and full-time positions as the basis for determining inadequacies in the employment situation of the workers at the airport. These better paying (unionized?), stable (permanent) and full-time positions are, apparently, the “good jobs” or “decent work” that social democrats refer to when they justify the goals that they pursue.

Consider, for example, the situation of workers at the airport who are part-time or who receive the minimum wage (as the report notes, these two categories of workers often overlap). The report states (page 4):

As noted above, there is an opportunity to identify and support career path development, in this case to less precarious jobs. Moreover, there appears to be some mitigation of the possible impacts of these aspects of employment precarity on these employees at Pearson.

Less precarious jobs (full-time/permanent), with better pay, thus constitute the standard of evaluation in the report.

I have criticized this standard in various posts. It is, of course, better to have a permanent position for most workers. Full-time work is also often preferable for workers than part-time work if they are going to meet their financial obligations and live some kind of enjoyable life outside of work. Receiving higher wages while working the same number of hours, obviously, is also preferable. However, nowhere in the report is their a hint of criticizing this standard.

This standard fails to criticize the fact that workers are Pearson International Airport are things to be used by

400-plus companies—public and private, large and small [pages 1 and 5].

(There are multiple page references to the same passage sometimes since the report includes the executive summary.)

There is not even a hint of the treatment of workers as things in the report (see The Money Circuit of Capital for a description of how workers are mere means to be used by employers, whether private or public.)  There is also not even a hint that the workers at Toronto Pearson are controlled and exploited (see the posts The Rate of Exploitation of Workers at Air Canada, One of the Largest Private Employers in CanadaManagement Rights, Part Four: Private Sector Collective Agreement, Ontario    and   Employers as Dictators, Part One).

The report in fact idealizes the working lives of 50,000 workers at Pearson. Apart from the issue of precarity, there is a lack of critical distancing from the class point of view of employers.

Thus, the report states (pages 1 and 5):

Employers include airport service providers, retail partners, airline and agency partners, to name a few, and all have a role in ensuring Pearson is a great place to work.

I fail to see how working for one or more of the 400+ employers at Pearson can ever result in Pearson being “a great place to work.” How can a workplace be a great place to work when the workers are used as a means to ends that they do not define? How can it be a great place to work when the workers are controlled, oppressed and exploited? The document is more ideology than anything else. Given that Air Canada workers are oppressed and exploited, it is undoubtedly also the case  that the other 400+ employers oppress and exploit their workers. How could it be a great place to work under such conditions?

Consider the workplace survey about workers’ attitudes towards working at Pearson. The report states (pages 2 and 23):

The majority of employees believe that Pearson provides not only a good job today, but also opportunity to grow and advance. This is especially true of younger employees who are early in their careers and see a path forward within the airport employment community.

Since the standard of evaluation for determining what constitutes a “good job” is one where work is permanent, full-time and better paying (unionized?), there is little wonder that “the majority of employees believe that Pearson provides … a good job today.”

Before becoming workers, working-class children in schools have been indoctrinated into believing that working for an employer is natural. Consider my posts concerning indoctrination of students in schools; the school history curriculum fails to provide opportunities for an historical understanding of the emergence of a class of employers and employees in Canada (see, for example, A Case of Silent Indoctrination, Part One: The Manitoba History Curricula and Its Lack of History of Employers and Employees ; this is one of several posts on the silencing of such an understanding in various Canadian provinces and territories). The lack of such an understanding is reflected in the silence concerning the power of employers to dictate to workers in various ways and to exploit them at Pearson International Airport.

Unions, in turn, have not even provided an opportunity for workers to question this dogma. Their reference to “fair contracts” and “decent work” reinforce such standards of evaluation. Is there any wonder that the majority of workers at Pearson use such low standards to determine whether their job is good or not?

Professor Tufts, a geographer professor at York University and spokesman for the Toronto Airport Workers’ Council (TAWC), refers to the “data being in.” Yes, but there is no data that provides for an examination of the extent to which workers at Pearson Airport would consider that they have good jobs by working for an employer on a permanent and full-time basis with a wage somewhat higher than the minimum wage–if they also believed explicitly that they were being oppressed and exploited by the employers at Pearson Airport.

Professor Tufts has some interesting things to say about the purpose of this report. He says the following (Professor Tufts on the Pearson Airport Workforce Survey):

We want to know … how their careers are developing in the future, and how we can better help their careers develop at the airport and make Pearson a place where it’s not just a place to come to work to survive, but it’s a place where you come to build a career and thrive. And this survey is the first stop to getting something to talk about, to come together and talk about how we can better solutions.

Count on Pearson and Toronto Airport Workers’ Council to make the airport a great place to work.

I would not count on that. The Toronto Airport Workers’ Council may stimulate the improvement of working conditions at Pearson, but improved working conditions are hardly the same as “a great place to work.” Of course, workers should struggle to improve their own working conditions. However, Professor Tuft, like most union reps here in Toronto, assumes that it is really possible to create a good workplace environment on the basis of working for a particular employer in the context of the class power of employers so that the workplace is “a great place to work.” I deny that categorically.

Professor Tufts and the authors of the report assume that working for an employer and working at a great place are mutually compatible. As noted above, in referring to the money circuit of capital, workers are ultimately things to be used for the benefit of employers. They are also exploited. These facts limit improvements in working conditions–including workers’ control of their own working lives at work. These facts also means that workers necessarily lack control over a large area of their work at Pearson International Airport–a fact hidden behind the rhetoric of “a great place to work.”

These facts, on the other hand, are expressed in management rights’ clauses (explicitly in collective agreements if present but implicitly otherwise because arbitrators assume that management has dictatorial powers to direct the workforce, with the collective agreement only limiting such power). .

The report–and Professor Tufts’ commentary on it–express at best a social-democratic point of view, where it becomes possible to improve working conditions, but always within the limits of the power of employers as a class that use and exploit workers for their own benefit.

For the authors of the report and for Professor Tufts, improvement of working conditions, while leaving the power of employers generally intact, means the same thing as making Pearson “a great place to work.”

Now, TAWC may have thought that their participation in the consultation process may benefit the Pearson Airport workers’ interests. There is nothing wrong with that; in fact, the attempt to improve workers’ conditions is to be praised. On the other hand, by not engaging in a critique of the report, TAWC simultaneously–although implicitly–justifies the continued oppression and exploitation of Pearson Airport workers.

Do not the workers at Toronto Pearson International Airport deserve more? Do they not deserve a critical analysis of the report? Does TAWC provide such a critical analysis to the workers?

What do you think?

Co-optation of Students at School Through We Day, Part Two: The Social-Democratic Left Share Some of We Day’s Assumptions

In a previous post, I outlined how We Day is a form of indoctrination and that schools form vehicles for such indoctrination. What is the social-democratic left’s position in relation to  this indoctrination and its incorporation into schools?

I already mentioned the Manitoba Teachers’ Society (MTS) decision not to promote We Day since some of the corporations that sponsor the event act in contradiction to some of We Day’s professed principles (perhaps, by way of example, Cadbury’s use of cocoa produced with child labour from Ghana). MTS writes:

MTS Bows Out of We Day

The Manitoba Teachers’ Society will no longer be involved in promoting or participating in We Day events.

Delegates to annual meeting agreed with a recommendation from the organization’s Equity and Social Justice Committee and provincial executive.

“The Manitoba Teachers’ Society model of social justice is not reflected in We Day,” the resolution said. “We Day doesn’t promote, support or include a model of social justice that the Society identifies as effective in advancing social change. We Day is more of a charity model that doesn’t address the roots for systemic inequity.”

We Day is a yearly concert and speaker series attended by tens of thousands of students in Canada, the U.S. and Britain.

In recent years it has attracted controversy because of the number of corporate sponsors involved in the events. Some of those sponsors have been accused of actions in other countries that run counter to the messages on which We Day is based.

The decision by delegates does not extend to the involvement of schools and students. In the past, both MTS staff and elected officials have promoted and been participants in We Day.

Would MTS, however, have decided to not support We Day if all the sponsors were consistent with the professed principles of the creators of We Charity, Craig and Marc Kielburger? It is difficult to say, but since they consider a charity model to be insufficient to address the problem of systemic inequity, they would presumably still oppose the model characteristic of We Day. When I searched for the meaning of “systemic inequity” on their website, the only hit that came up with that term was–the item on We Day. (Replacing “equity” by “equality” resulted in zero hits.) Hence, the reader of their site cannot determine why specifically they do not support We Day. This vagueness prevents a reader from determining whether MTS’s position is reasonable in diverse social contexts, such as systemic racism, systemic sexism, systemic ignoring of the power of employers as a class, and so forth.

When I searched The Elementary Teachers’ Federation of Ontario (ETFO) website for “We Day,” I found zero hits. Nonetheless, I did find some hits when I searched using “Kielburger”–the surname of the founders of WE Charity and organizers of We Day held annually at many schools throughout Canada, the United States and elsewhere. Some of the material refers to Craig Kielburger as a model “hero,” as an example of a person who has made a difference, and a “high” recommendation of the book Take Action! A Guide to Active Citizenship by Marc and Craig Kielburger for activism advocacy.

For the many students who attend We Day, the vague reference to “systemic inequity” and the idealization of the Kielburgers as persons and as activists will probably confuse more than enlighten.

Lisa Howell, in an article written in 2015 “A parent & teacher’s reflections on “WE DAY”
how can a social movement feel so meaningless,” expresses her contradictory experience of expecting an inspirational day while attending We Day in Ottawa and experiencing a consumerist and anti-environmental day.

This contradiction between rhetoric and reality should not, however, surprise anyone who understands the nature of capitalist relations at work. In The Money Circuit of Capital, the end of the process of obtaining more money (the goal of private employers) results in more money in relation to the initial process but in itself it is merely a sum of money. To become capital, both the principal and some of the profit must be invested if the employer is to continue to function as an employer (since otherwise competition from other employers will result in being undercut and eventually going bankrupt). This whole process is infinite and can never be reached–it is a goal that can never be satisfied–the infinite process of the accumulation of capital.  How much money is enough? Never enough.

To state it differently: the birth of capital is simultaneously its death; consequently, the being of capital is a process that is only through it always reaching beyond itself.

In a finite world characteristic of the environment, capital is contradictory. There must be a contradiction between the environment and the nature of capitalist social relations. To resolve this problem requires surpassing this infinite process of capital accumulation. It requires a socialist society.

The Kielburgers, as seen in the first part of this two-part series of posts, do not question the legitimacy of this infinite process. They revel in it when they refer to “corporate and social responsibility.” The solutions which they offer, at best, a slight reduction in the impact that this accumulation process has on human beings, on human life and on the environment. Since they fail to question the legitimacy of the process of the process of capital accumulation, their solution actually diverts attention away from the pressing need to go beyond this accumulation process if the problems of child labour, poverty and environmental destruction are to be resolved.

The social-democratic left do seem to object to We Day on occasion. Thus, Molly McCracken, Manitoba director of the social-democratic Canadian Centre for Policy Alternatives, wrote a short article published online at Rabble.ca (We Day Sidesteps the Real Issues of Child Poverty). She points out the bias of We Day of pandering to corporations, who get free publicity and appear to be socially responsible. The problem of child poverty, she points out, is not addressed in such a forum.

However, let us look at some of the Canadian Centre for Policy Alternatives’ own attitude towards corporations. I did a search, using the terms “fair share taxes.” Several hits came up, with such titles (and dates) as:

  • Demanding a Fair Share (July 20, 2017)
  • Replacing MSP with fair taxes would mean savings for most BC families: economist (July 6, 2016)
  • Change in direction on tax policy needed to escape budget crunch, ensure high-income British Columbians and corporations pay fair share: study (January 29, 2013)
  • A decade of eroding tax fairness in BC (June 30, 2011)
  • Fair Shares (April 27, 2011)
  • Canada’s rich not contributing fair share in taxes: study (November 8, 2007)

The criticism of corporations is restricted to the level of taxes that they pay. Neoliberal governments have reduced corporate taxes and taxes on the rich unfairly whereas the rest of the Canadian population has to pay a disproportionate (and unfair) level of taxes relative to the corporations and the rich.

The implication is that if progressive taxes are re-instituted, then fairness will be realized. This is a social-democratic  point of view, of course. One of the strategies of he social-democratic point of view is to focus on distribution after it has been produced and to disregard the process by which it has been produced (and, when it does focus on the process of production, it neglects the issue of the whether workers are free or not by using such cliches as “good jobs,” “decent work,” “fair contracts” and the like).

This does not mean that the left should not criticize skewed tax policies–but why do they simultaneously do so by implying that a change in tax policies will somehow magically convert the social world into a fair world? If corporations were to pay their “fair share,” then they should have the right to dictate to workers what to do, when to do it and how to do it, should they not? Would child labour, poverty and environmental destruction end if corporations paid their “fair share.”

This idea of “fair share” forms another cliche that the social-democratic left use to hide the reality of the social dictatorship that prevails when working for an employer.

What does the Canadian Centre for Policy Alternatives mean by “fair share” of taxes? Presumably the following (from the above 2007 article):

The study finds the top 1 percent of families in 2005 paid a lower total tax rate than the bottom 10 percent of families.

“Canada’s tax system now fails a basic test of fairness,” says Marc Lee, senior economist with the CCPA’s B.C. office and author of the study. “Tax cuts have contributed to a slow and steady shift to a less progressive tax system in Canada.”

Paying a fair share of taxes would then mean that the bottom 10 percent of families would pay a lower tax rate than the top 1 percent of families. As long as this is the case, then We Day promoters would then be justified in having corporate sponsors for the event. Of course, some may object that some sponsors may still contradict the principles of We day, but assuming that no corporation exploited child labour (for example), would the social democrats then criticize We Day? Presumably not. They believe, implicitly, that there can be such a thing as corporate fairness and corporate responsibility–just like the Kielburgers. Social democrats and neoliberals share certain assumptions together.

The social-democratic left cannot deal with the contradictory nature of the society in which we live; their inadequate way of dealing with We Day illustrate their inadequate capacity for dealing with this contradictory society.  They either vaguely refer to “systemic inequity,” or they find their expectation and reality contradictory, or they imply that as long as corporations pay their “fair share” of taxes, then We Day should be supported.

Since the social-democratic left cannot deal adequately with the nature of We Day, it is necessary to go beyond their point of view–to a socialist point of view, where the intent is to overcome the infinite process of the accumulation of capital and its corresponding conflicts, struggles and contradictions.

What of the radical left? As far as I can tell, they are, at least in Toronto (and probably elsewhere) oblivious to We Day and the extent to which students in schools are bombarded with employer ideology through such events. The radical left here in Toronto does not even bother to engage in ideological struggle; it accepts such ideologically loaded phrases as “decent work,” “a fair contract,” “fair labour laws,” and so forth.

What is the social-democratic left like where you live? The radical left?

 

Co-optation of Students at School Through We Day, Or School Indoctrination, Part One

I thought it appropriate to post a couple of comments on WE in light of the WE scandal. Justin Trudeau, prime minister of Canada, supported WE, and his wife personally participated in it–and his mother was paid by WE. However, rather than looking at the scandal, it is better to look at WE itself since, from my personal observations, school bureaucrats and many school employees, including teachers, accepted the hype from WE without any critical distancing or investigation of its nature.

We Day is an event promoted in many schools in the more developed capitalist world, organized by We Charity. It is supposed to be an effort to energize students in such countries to change the world and to make it a better place through performing acts of social justice.

The website for We day has the following to say (We Day Website):

WE Day is the manifestation of the WE movement: an unparalleled celebration of young people and educators who have made a difference. Held in over 15 cities across the United States, Canada, the UK and the Caribbean, the event series features an inspiring line-up of world-renowned speakers, award-winning performers and real-world stories of change. You can’t buy a ticket —you have to earn your way. All it takes is one local and one global action through WE Schools.

Wow. Does this not sound encouraging?

There is further information about We Day for Toronto in September, 2019:

 Click here to apply for media accreditation to attend WE Day 
 WE Day Toronto is free to thousands of students and teachers thanks to partners led by National Co-Title Sponsors RBC and TELUS 

TORONTOSept. 12, 2019 /CNW/ – Today, WE Day, the greatest celebration of social good, announces the initial dynamic lineup set to hit the stage at WE Day Toronto taking place at Scotiabank Arena on September 19, 2019. Held in 15 cities across North America, the U.K. and the Caribbean, WE Day Toronto will unite 20,000 extraordinary students and teachers who have made a difference in their local and global communities. Together they will enjoy a day of unforgettable performances and motivational speeches with WE Charity co-founders Craig Kielburger and Marc KielburgerEmilio EstevezRupi KaurSarah McLachlanNoah SchnappDavid SuzukiTegan and Sara and more to be announced in the coming days.

“We can achieve so much more together than we can alone and knowing that we’re a part of something bigger than ourselves is a great feeling,” said singer-songwriter, Sarah McLachlan. “Every student and teacher at WE Day is making a difference on their own, but when they come together under one roof, you can feel the massive impact of their collective efforts. I’m proud to be a part of such a powerful movement of change.”

More than a one-day event, WE Day is connected to the free, year-long service learning program WE Schools. Designed to enhance a school or community’s existing social initiatives or spark new ones, WE Schools provides teachers with educational resources and action campaigns to encourage students to further their curricular learning and develop life skills to succeed beyond the classroom. In the 2018/2019 school year, over 6,920 schools and youth groups along with 8,125 educators across Ontario improved the world through WE Schools, creating socially innovative solutions to some of today’s most pressing issues. Through WE Schools students and teachers volunteered over 1.7 million hours creating an estimated social impact value of more than $45 million in support of global and local causes including hunger, poverty, bullying, well-being, access to education and access to clean water in communities around the globe.

“The youth at WE Day are at the forefront of change. They are committed to tackling some of the largest issues the world has ever faced; including bullying, climate change, and mental well-being, to name a few,” said WE Charity co-founder, Craig Kielburger. “WE Day demonstrates how important it is to empower our youth to be leaders of change by providing them with the tools and resources they need to chase their dreams—both in the classroom and out in their communities. We are honoured to celebrate the efforts of the next generation and we can’t wait to once again commemorate their incredible achievements at WE Day Toronto.”

The initial list of WE Day Toronto speakers, presenters and performers in alphabetical orderannounced to date, include:

  • Appearances by: Nav Bhatia, Celebrity Marauders, Jessi CruickshankMaddy DimakosTyrone EdwardsEmilio EstevezMohammed FaizyJordan FisherSarain FoxConnor FrantaReina FosterJacob Grosberg, Jade’s Hip Hop Academy, Theland KicknoswayCraig KielburgerMarc KielburgerAiden LeePenny OleksiakJames OrbinskiJenna Ortega, Dr. Pamela Palmater, Marissa Papaconstatinou, David Patchell-Evans, Regent Park School of Music, Navia RobinsonNoah SchnappWali ShahDavid SuzukiMaddison ToryAlia YoussefSpencer WestChloe Wilde

  • PerformersScott HelmanRupi KaurSarah McLachlan, SonReal, Tegan and Sara

WE Day is free of charge to teachers and students across Canada thanks to the generous support of partners led by National Co-Title Sponsors RBC and TELUS. This means students can’t buy a ticket to WE Day Toronto— educators and youth from across the province earn their way by taking action on one local and one global issue of their choice.

WE Day magic continues beyond the day through WE Day Connect, a free 60-minute interactive online event taking place on October 8, 2019.

WE Day is supported in Toronto by Co-Chairs Kris Depencier, Regional President, Greater Toronto, & Vice President, Personal Lending and Client Strategies, RBC; Sarah Davis, President, Loblaws Companies Limited; and Jon Levy, Chief Executive Officer, Mastermind Toys. WE Day is supported nationally by Co-Chairs, Darren Entwistle, President & Chief Executive Officer, TELUS; Jennifer Tory, Chief Administrative Officer, RBC; Chief Perry Bellegarde, National Chief, Assembly of First Nations; Mark Dervishian, Chief Operating Officer, Ardene; Nelly Furtado, Canadian Singer/Songwriter; Jeffrey Latimer, President, Jeffrey Latimer Entertainment; Elio Luongo, Chief Executive Officer, KPMG Canada; The Honourable David C. Onley, Former Lieutenant Governor of OntarioBill Thomas, Chairman Elect, KPMG International & Chair, KPMG’s Americas Region, KPMG; James Villeneuve, Former Consul General of Canada to Los Angeles; and Andrew Williams, Chief Executive Officer, DHL Express Canada. WE Day is supported globally by Co-Chairs David Aisenstat, Chairman, Chief Executive Officer & President, Keg Restaurants Ltd.; Hartley Richardson, President & Chief Executive Officer, James Richardson & Sons Ltd.; Dave I. McKay, President & Chief Executive Officer, RBC; and Craig Burkinshaw, Co-Founder, Audley Travel.

School districts or divisions support We Day in various ways. For example, the Toronto District School Board (the largest school board in Canada), has the following on its website on Social Justice:

Social Justice

The TDSB is strongly committed to principles of fairness, equity and human rights. We believe we all have a shared responsibility to contribute to positive social change both locally and globally. Learning about and engaging in social justice issues (such as equity, diversity, abuse against women, poverty reduction and environmentalism) empowers everyone as 21st century global citizens.

The goal of our Social Justice Action Plan that every school will participate and report on one local action and one global action each as part of school plans.

Ways to get involved:

We Day

Unfortunately, We Day is really school rhetoric that fails to address the real issues facing students, employees and many others throughout the world. It is a controlled movement to indoctrinate students into believing that they really change the world through micro changes in the present social system.

Fortunately, some teachers’ organizations, such as the Manitoba Teachers’ Society (MTS) (in 2017) have seen through some of the rhetoric (though the inclusion of the last sentence weakens the criticism):

MTS Bows Out of We Day

The Manitoba Teachers’ Society will no longer be involved in promoting or participating in We Day events.

Delegates to annual meeting agreed with a recommendation from the organization’s Equity and Social Justice Committee and provincial executive.

“The Manitoba Teachers’ Society model of social justice is not reflected in We Day,” the resolution said. “We Day doesn’t promote, support or include a model of social justice that the Society identifies as effective in advancing social change. We Day is more of a charity model that doesn’t address the roots for systemic inequity.”

We Day is a yearly concert and speaker series attended by tens of thousands of students in Canada, the U.S. and Britain.

In recent years it has attracted controversy because of the number of corporate sponsors involved in the events. Some of those sponsors have been accused of actions in other countries that run counter to the messages on which We Day is based.

The decision by delegates does not extend to the involvement of schools and students. In the past, both MTS staff and elected officials have promoted and been participants in We Day.

The rhetoric of We Day can be seen in various ways. Consider the following statement by Craig Kielburger, one of the founders of We Day:

The urgent need for more stable funding eventually led to the creation of Me to We, a for-profit social enterprise that sells ethically produced goods and services, and funnels half its earnings to Free the Children.

What is “ethically produced goods?” In the book written by Craig Kielburger, entitled Free the Children, there are many references to child labour and opposition to it–and child labour usually takes the form of being an employee of some sort or other (including domestic servants)–but no opposition to the employment of adults. Opposition to children being employed by employers does not therefore go hand in hand with opposition to adults being employed by employers. Why the double standard? Why is it ethically unjust to employ children but ethically just to employ adults? Why is it ethically just to use adults as means for employers’ ends and ethically unjust to use children for the same end? (See The Money Circuit of Capital). Mr. Kielburger has no answer to this question since it does not even come up in his book. This silence reflects the typical silent indoctrination characteristic of schools concerning the power of employers to dictate to employees what to do, how to do it, when to do it, how fast to do it, and how much to produce (see, for example, A Case of Silent Indoctrination, Part One: The Manitoba History Curricula and Its Lack of History of Employers and Employees). For educators, such a lack of critical distancing from the social world is anything but educative.

Let us listen to the founders of We Day and Me to We, in their book Me to We: Finding Meaning in a Material World, Craig Kielburger and Marc Kielburger, page 128:

Today, employees want more than a paycheck—they’re looking for meaning. Many successful companies are empowering their employees to reach out to others and supporting their efforts in a host of different ways. Direct Energy bases its charitable giving on the number of volunteer hours put in by its employees. Xerox allows social service sabbaticals. Wells Fargo gives personal growth leaves. LensCrafters empowers its employees with challenging service projects all over the world. The list goes on. From Ben and Jerry’s ice cream to Paul Newman’s salad dressings to the Body Shop, businesses and social entrepreneurs are hearing the call of Me to We and are revolutionizing business practices in a colossal way.

This lack of critical distancing from the power of employers as a class is characteristic of these founders of such a hyped-up employer ideology:

Increasingly, companies are finding that corporate social responsibility has rewards that extend beyond employee morale. In recent studies, socially responsible and community-oriented companies have been shown to do better than their competitors. In 2001, Business Ethics Best Citizen companies did significantly better than the remaining companies in the S&P 500. The ranking was based on eight statistical criteria, including total return, sales growth, and profit growth over one-year and three-year periods, as well as net profit margins and return on equity.10

In other words, indoctrination via the concept of “corporate and social responsibility” leads to greater net profits. It pays for employers to link to the ideology of corporate social responsibility–an ideology that the founders of We Day and Me to We obviously promote.

“Ethically produced goods” includes, then, using adult workers as a means to obtain more and more money. This is indoctrination–not education.

Me to We also promotes “ethics” via consumer choices. On the Me to We website, we read (Welcome Me to We):

ME to WE is an innovative social enterprise that provides products that make an impact, empowering people to change the world with their everyday consumer choices.

One way in which indoctrination occurs is through shifting the focus from defining social problems and their solution in relation production to solutions relating to consumption. As David Jefferess writes, in his article, “The “Me to We” social enterprise: Global education as lifestyle brand,” page 18:

“Me to We” “transforms consumers into world changers, one transaction at a time” (Me to We 2011a); it promotes a way of being good in the world as a consumer identity: “Every trip, t-shirt, song, book, speech, thought and choice adds up to a fun, dynamic lifestyle that’s part of the worldwide movement of we,” (Me to We, 2011b).

We Day and its associated organizations (WE Charity, for example) also set up a dichotomy between the First World children and adolescents and those who live in the so-called Third World. First-World children and adolescents are supposed to be the fortunate ones who are to tend the hands of their fortunate lives to the unfortunate lives of children and adolescents in the Third World. As Jefferess writes (page 20):

Kielburger characterizes Canadians as “some of the luckiest people in the world” (2009). As global citizens, he asserts, Canadians need to “recognize what we have to share in this world” (2009): “As we learn to feel gratitude and act on our good feelings through reaching out to others, we begin to live the “Me to We” philosophy” (Kielburger & Kielburger 2006, p. 146). The solution to the problem of poverty is presented in terms of benevolent obligation: What can we, the fortunate, do to help the unfortunate?

For Kielburger and company, we Canadians are not exploited and oppressed by employers and the associated power structures (such as the police and the courts). We are not dictated to by employers at work; we are not treated as things while we are working. Students are not treated as “learning machines,” with grades (marks) as a weapon in keeping students in line–as well as the administrative structure of schools (the bureaucracy) and the Department of Education.

This exclusion of Canadians (and Americans,  British, French, German, Italian, Japanese and so forth) from the exploited and oppressed is characteristic of a particular kind of nationalism.

To be sure, workers, children and adolescents are relatively better off (with some exceptions, such as many indigenous children and adolescents) than their counterparts in the so-called Third World, but the We Day ideology ignores the forces in the more industrialized capitalist countries that have prevented the so-called Third World countries from resolving their social problems.

Thus, in from 1944 to 1954, in Guatemala (a country just south of Mexico), there were political, social and economic changes that were abolished when the CIA-supported military overthrew the elected president of Guatemala–Jacobo Arbenz. Land that was distributed to over 100,000 Guatemalan families for cultivation were taken back and returned to the powerful and rich land owners. Under such conditions, is there any wonder that many Guatemalan children remain poor, and child labour is common? (See Thomas Offit, Conquistadores de la Calle: Child Street Labor in Guatemala City).

Furthermore, many Guatemalans’ experiences of torture, disappearance, assassination and genocide since the installation of the 1954 military dictatorship also illustrate how the “fortunate” capitalists in the industrialized countries (especially the United States, but also other countries, such as Canada, which fail to oppose the foreign policy of the United States) have contributed to the continued exploitation and oppression of children, adolescents and adults in the so-called Third World.

In addition, it was the United States government that trained many of the Guatemalan military responsible for torture and other atrocities by training them in counterinsurgency techniques. The Guatemalan military  became an efficient killing machine (the extent to which the Guatemalan was organized into an effective killing machine is described, for example, in Guatemala: Nunca Mas).

We Day and its supporting organizations, far from educating youth on the realities of the world in which we live, hides such a reality. Problems that cannot be solved by the methods of its advocates are simply not addressed. The pseudo-solutions which it proposes reflects a world dominated by a class of employers.

The popularity of We Day among Canadian school administrators and school teachers and employees expresses the lack of critical thinking characteristic of such administrators, teachers and employees.

In a future post, I will address how the Left has addressed We Day and its supporting organizations.

 

 

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

In another post, 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). One of those employers is Magna International Inc., a multinational corporation whose workers produce automobile supplies for inputs into car manufacturing.

This is a first attempt at calculating the rate of exploitation of one of the largest private employers in Toronto, Magna . It is undoubtedly imperfect in many ways, 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 by has undoubtedly reinforced social-reformist tendencies.

I am going to begin with a conclusion, and then explain what it means and how it is calculated so that the reader understands where I am headed in the calculations:

That means that for every hour worked that produces her/his wage, a worker at Magna International works around an additional 47 minutes for free for Magna International. In an 8-hour work day, the worker produces her/his wage in about 4.5 hours, and the remaining 3.5 hours works for free for Magna. In a 10-hour work day (both work days seem possible at Magna International—see https://www.indeed.com/cmp/Magna-International-Inc/faq/how-are-the-working-hours-at-magna-international-inc?quid=1at7gf6rrak7i9ff)–the worker produces her/his wage in about 5.6 hours and the remaining 4.4 hours works for free for Magna International.

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 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 and salaries).

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. I begin with one company and invite others to provide criticisms or suggestions for improvement.

I have used some of the ideas from Thomas Ittelson (2019), A Visual Guide to Financial Statements: Overview for Non-Financial Managers and Investors, and Antonios Patidis (2016), “A Micro-Approach for Testing Marx’s LTRPF:Evidence from Greece, 2000 and 2009,” Review of Political Economy. Patidis “utilises data taken directly from company reports and accounts” in order to determine whether the rate of profit falls in the major corporations in Greece. My purpose, however, is not, initially at least, in determining whether the rate of profit has fallen but rather what the rate of exploitation is in diverse companies in Toronto.

I also asked Michael Roberts how to calculate the rate of exploitation; he graciously sent me a couple of articles (one of which I read). After that, I sent him the above, and he commented that it looked good.

Again, the following undoubtedly contains many limitations, but I will leave that for further discussion, should the issue arise.

The income statement is broken into the following categories for 2019 (in millions of US dollars): (pages 5, 36):

Sales $39,431
Costs and Expenses $37,208

Cost of goods sold $34,022

Material $24,585

Direct labour $2,815

Overhead $6,622

Depreciation and amortization $1,345

Selling, general and administrative $1,697

Interest expense, net $82

Other expense, net $240

Equity income ($178) [If you add up all the numbers–34,022; 1,345; … 82, then you get 37,286; if you subtract 178 from that, you get 37,208–the same amount as “Costs and expenses.” That is why the 178 is in parentheses–it is necessary to subtract it from expenses since it is really income. 

Income from operations before taxes: $2,223 (profit or surplus value) 

A couple of adjustments are probably necessary. On page 37, 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.

A second 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. Hence, it should be added to “Income from operations before taxes.” Adjusting “Income from operations before taxes,” we have 2,223-47+82=2,258.

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%.

That means that for every hour worked that produces her/his wage, a worker at Magna International works around an additional 47 minutes for free for Magna International. In an 8-hour work day, the worker produces her/his wage in about 4.5 hours, and the remaining 3.5 hours works for free for Magna. In a 10-hour work day (both work days seem possible at Magna International—see https://www.indeed.com/cmp/Magna-International-Inc/faq/how-are-the-working-hours-at-magna-international-inc?quid=1at7gf6rrak7i9ff)–the worker produces her/his wage in about 5.6 hours and the remaining 4.4 hours works for free for Magna International.

This is not, however, the end of the story. Christopher Arthur, in his book The New Dialectic and Marx’s Capital,  argues that there are two kinds of exploitation, one that occurs during the production of the wage by the workers (since they are subject to control by employers during that time), and the other kind of exploitation outlined above, where workers work for free for the employer. This issue, however, will be addressed in a follow-up post.