Wage Inequality Research Paper

The rich get richer while the poor get poorer. “From 1979 to 2019, wages for the lowest paid decile of workers rose 3.3% adjusted for inflation, while wages for the top 5% of workers rose 63.2%, according to the Economic Policy Institute” (Semuels, A., 2021, August 2-9. Wage Rage. Time). As you read this quote, you may have asked yourself why and how we let this happen. Karl Marx has several concepts that explain why and how capitalists sustain this enormous inequality such as surplus value and false consciousness. 

Surplus value is one of the main reasons why capitalists sustain this enormous inequality. Allan defines surplus value as “the difference between a commodity’s use and exchange values, and is the source of capitalist profit”(Allan & Daynes, 2017).  People are paid what the capitalist wants to pay them. For example, a shoe may cost the consumer $200 but I (the worker) get paid $12 an hour to make the shoe.  The $200 will be the exchange value also known as the sales price. The $12 an hour would be the cost of labor. If it took me an hour to make it, the capitalist  only paid me $12 to make the shoes. If  the company purchased all the material for $10, then the $10 would be the cost of materials. The capitalist makes $178 profit. If they could pay someone in China $2 per hour and make $188 in profit. The exchange value minus the cost of labor and material will be surplus value also known as profit. The wage is not the price of labour but the payment of labour power (Dos Santos Ferreira & Ege, 2018). In other words, the wage is not how much your labor cost but how much you are willing to sell your labor. The wages are lower due to people who are willing to work for less, which explains why wages for the lowest paid decile of workers rose 3.3% adjusted for inflation, while wages for the top 5% of workers rose 63.2%. People are just trying to make a living, so they are okay with low wages. The workers are being exploited without realizing it. If workers decide to become more militant, the capitalist becomes more exploitative and repressive in order to stop their resistance (Calhoun, 2012).Workers are unconscious of what is really happening. This is the main reason why capitalists sustain this enormous inequality. 

With that being said, I would like to discuss how capitalists sustain this enormous inequality by false consciousness. False consciousness is “the self-awareness that is grounded in anything other than creative production” (Allan & Daynes, 2017). People in false consciousness are deluded about their own beliefs (Eyerman, 1981).  People who are in false consciousness are unable to see their alleged exploitation and oppression. Owners feed a plethora of false information to the workers such as the idea that if they work hard they can get to the top. Spreading false ideas makes it harder for workers to unite and see their true level of oppression and exploitation.  Capitalists don’t care about the workers, they only care about making money. Since people are in false consciousness, they are unaware of what is truly happening so they allow an unjust society to occur. Additionally, false consciousness keeps the proletariat from perceiving. As the quote mentioned above states that  the wages for the top 5% of workers rose 63.2%, this just shows how people are unaware of how much inequality exists. People believe that they will be part of the top 5% if they just work hard. It’s not until people come to true consciousness that we will see change. We live in a capitalist world that takes advantage of workers. We live in false consciousness, where workers don’t know that this is happening so they can’t revolutionize. Capitalism has worked and will continue to work unless we come to true consciousness and revolutionize capitalism. Surplus value and false consciousness are why and how capitalists sustain this enormous inequality such as surplus value and false consciousness. 

References 

Allan, K., & Daynes, S. (n.d.). Allan, Daynes. Explorations in Classical Sociological Theory. 4th edition. Retrieved from

https://platform.virdocs.com/r/s/0/doc/423646/sp/17972150/mi/59887669?cfi=%2F4%2F2%5Bs9781506357331.i669%5D%2F10%5Bs9781506357331.i747%5D%2F16%5Bs9781506357331.i759%5D%2F6%2C%2F1%3A0%2C%2F1%3A0

Calhoun. Classical Sociological Theory, 3rd Edition for Fresno EPDF. https://platform.virdocs.com/r/s/0/doc/1742260/sp/219336629/mi/656774685?cfi=%2F4%2F4&menu=index.

Dos Santos Ferreira, R., & Ege, R. (2018). The employment contract with externalised costs: the avatars of Marxian exploitation. European Journal of the History of Economic Thought, 25(5), 1081–1093. https://doi-org.hmlproxy.lib.csufresno.edu/10.1080/09672567.2018.1481988

Eyerman, Ron. “False Consciousness and Ideology in Marxist Theory.” Acta Sociologica, vol. 24, no. 1/2, Sage Publications, Ltd., 1981, pp. 43–56, http://www.jstor.org/stable/4194332.