Essence and forms of wages. Unemployment, Wage Theories - Economic Theory

Essence and forms of wages. Unemployment

Wage Theories

Whatever the form of hiring, the level of real wages remains the main stimulating factor for increasing labor productivity. Wages arose with the advent of hired labor and was the subject of research of many schools and areas of economic science. Among these studies, a prominent place was occupied by Marxist theory. The essence of it consists in the following: in the conditions of developed commodity relations, the labor takes the form of a commodity and appears on the market. The commodity form of the labor force presupposes the availability of its value. Wages are the price of labor. K. Marx called wage transformed by the form of the value of the commodity "labor", which disguises actual economic relations. The whole labor of the worker is paid for, which will create the illusion of equality of the employee and the employer. To keep the illusion, labor relations and a flexible system of wages are constantly developing and improving. The owner of capital, paying the daily cost of the labor force, forces the worker to work more than necessary for the reproduction (creation of value) of the labor force, appropriating surplus-profit. Accordingly, the hired worker's labor is divided into two parts: paid (necessary) and unpaid (surplus) labor, and the working day for the necessary working time and surplus labor time. In Western economic theory there is also a different, non-Marxist theoretical understanding of the essence of wages. Theories of productivity and marginal productivity were most widely used.

The concept of the three production factors and the three sources of income of the French economist JB Saye was based on the productivity theory (see Chapter 23). Schematically, its concept can be represented as follows (Figure 6.3).

Three factors of production and three sources of income

Fig. 6.3. Three factors of production and three sources of income

According to Say's concept and his supporters, the ability to produce value is attributed to the three main factors of production: labor, land (as a means of production), and capital. In accordance with this, the income of each factor, namely wages, interest on capital, land rent, was declared equal to the production contribution of this factor, corresponding to its share in the total cost of production. Thus, according to the theory of productivity, wage workers receive the full product of their labor, equivalent to the contribution of this factor. With the growth of labor productivity, the incomes of wage earners increase. Developing this theory, A. Marshall introduced a special factor of production - organization and management, considering entrepreneurial profit a reward for this factor.

The theory of productivity has been further developed in the theory of marginal productivity, whose development is related to the names of the major Western economists JB Clarke, A. Marshall, F. Wyxtide, JM Keynes. According to this theory, the participation of each factor of production in the creation of the value of goods and services is determined by its marginal productivity, i.e. the size of the marginal product that he creates, which is understood as the increase in output obtained as a result of an increase in this production factor by one unit, with the same value of all other factors remaining constant. Accordingly, wages are equal to the product created by the last worker participating in its production. The productivity of the labor force decreases with the growth of its number and at a constant amount of capital. This provision is based on the law of diminishing productivity, according to which every additional increment of labor from a certain moment will give a lower productivity, which will not bring any profit or loss.

This will be an "indifference" zone, and workers will be & quot; marginal & quot; workers. The marginal product they create is equal in value to the costs of their labor. The cost of this product determines the level of wages of all employees of this qualification. The decline in labor productivity as the number of jobs increases and the amount of capital is unchanged is explained by the fact that an increase in the number of workers means a reduction in their technical equipment, since the amount of capital per worker will fall. The theory of marginal productivity is graphically presented in Fig. 6.4.

The direct bb {b2bg .. expresses the decrease in the productivity of workers as their number increases. The amount of capital remains unchanged. Area ODD, (5,) expresses the product of the given capital and one worker. The area apr2a2 ... (52) expresses the increment of the product that is obtained when the second worker is added, i.e. This area expresses the productivity of the second worker. The same is analogous to the area apr3a3 (53), etc. They all express the performance of the third, fourth, etc. working. The productivity of the next worker is constantly decreasing. Suppose that the marginal worker is the third and that his productivity is expressed in the form 53 (area apr, la ^). It is this performance that regulates wages. The wage of all workers will be equal to the product of area £ by the number of workers ($, w = 53 x/_). Consequently, the more workers will be with the same amount of capital, the less their wages will be.

The theory of marginal productivity became the basis of the concept of a regulated wage by the English economist JM Keynes (see 2AA). The basic premise of his concept is that with an unchanged level of technology, given the organization and the means of production, the volume of production is in inverse relation to real wages. The growth of employment is possible only at the cost of reducing real wages. Therefore, one of the means to promote employment growth is the reduction in real wages of workers by "moderate", or regulated, inflation, i.e. price increases, as this causes less resistance of workers than the reduction of earnings through the revision of tariff agreements. The main tasks

The curve of marginal productivity of labor

Fig. 6.4. Curve of marginal productivity of labor

Keynesian policies are to limit inflationary unregulated price increases, sustained economic growth, high employment.

Among the modern economic theories justifying the transformation of economic relations, the concept of human capital, , which is the result of progress in the sphere of the reproduction of labor associated with the scientific and technological revolution . The birth of this concept falls on the 1960s. It was developed by such well-known economists as G. Becker, B. Weisbrod, L. Hansen, T. Schulz, and others. The peculiarity of this concept is the introduction of a factor in human capital analysis into the analysis of distributive relations, and the emphasis is on the personal distribution of those incomes, which go to the owners of this capital. Under human capital is meant the knowledge, skills and abilities of a person that contribute to the growth of his productivity. Western economists consider education, training in production, medical care, migration, searching for information on prices and incomes, and the birth and upbringing of children the main forms of investment in a person. Training at the enterprise helps to increase the level of knowledge, therefore, leads to an increase in the volume of human capital. Health protection contributes to reducing morbidity and mortality, thereby prolonging the "lifespan" human capital. Migration and the search for information lead to the desire for an equal human capital to obtain a greater income (profit). The birth and care of children can help promote the reproduction of "human capital" in the scale of the country, the world as a whole.

The concept of "human capital" caused numerous attempts to estimate its volume and to measure its economic efficiency. According to the concept of human capital, the salary of an employee with a certain level of education consists of two parts: the first part is what he would get, having a zero level of education; the second part is the income for educational investments, i.e.

where Up - the salary of a person who has n years of education; SN - the amount of investment in n years of education; г - the level of return on investment in education; X0 is the wages of a person with a zero education.

The rate of return on human capital is considered by Western economists, in analogy with the usual rate of return. Therefore, the choice of type and level of education is treated as an investment decision. To resolve the issue of continuing education, a person should compare the expected rate of return with the percentage: education will be acquired if the expected rate of return exceeds the rate of interest. Conversely, education will not be acquired if the rate of interest exceeds the rate of return. Students, however, are of the opinion that supporters of the concept of human capital are guided by the same motive as entrepreneurs; motivation to maximize income, and therefore send funds to where they expect the highest rate of return. Thus, according to the proponents of this theory, labor with the development of scientific and technical progress becomes capital: along with the owners of the means of production, a new group of capitalists-owners of human capital-develops. Workers are capitalists in the sense of acquiring skills that are of economic value.

The main methodological difference in the approach to the essence of the wages of Marxists and supporters of non-Marxist theories is that Marxists recognize the exploitation of wage labor, which is obscured by the monetary form of wages. Supporters of non-Marxist concepts do not recognize the exploitation of wage workers. In their opinion, hired workers receive the full product of their labor, which indicates the fairness of social distribution, the harmony of class interests.

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