When it comes to economic relationships, there is a vast number of concepts that cause public debate and are capable of polarizing societies. The issue of the minimum wage or whether or not increases in minimum wage levels are helpful for workers and the economic system, in general, remains highly controversial today. Many believe that wage increases cause harm to employees and companies by encouraging price growth associated with larger employee expenses and mounting unemployment due to rising job competition. Analyzing the issue from the Marxist viewpoint, it can be concluded that increases in the minimum wage are beneficial to the working class but not to capitalists.
The minimum wage debate centers around whether it is possible to benefit the working population and boost economic development by initiating increases in wage levels. The answer depends on the nature of the relationships between wage size and the prices of goods and services. In one of his famous speeches on prices and value, Marx criticizes arguments that link wage growth to immediate increases in prices and the absence of benefits for workers. The main point is that wages and prices are not equal as concepts; instead, wages can be regarded as “a subset of price” or a price of human labor (Menon 63). To all effects and purposes, wage increases do not necessarily have to result in the growth of prices.
According to the Marxist school of thought, employee-employer relationships under capitalism present an act of exploitation, which implies that employers’ profits are much greater than the sum of all employees’ wages. Following this logic, it seems clear that large employers should have financial reserves that are substantial enough to find resources and increase payments released to all employees. Increases in wage levels have a significant impact on the size of profits that capitalists receive. To avoid losing advantages associated with extra funds, many of them would consider increasing prices for customers, thus compensating for the increasing costs of labor, but it would involve great risks.
Even though intentions linked with making goods more expensive for the customers would take place, many capitalists would not be able to translate them into practice due to such decisions’ harmful effects on their competitive ability. Interestingly, the willingness to prevent minimum wage growth correlates with the degree to which a person supports conservatism often cited as a philosophy of inequality (Jeong and Lee 5). By initiating increases in prices, employers can deteriorate their situation with profits even more by limiting the number of prospective customers who can afford their products or services (Avishai). Moreover, price growth decreases companies’ popularity among consumers and adds to the success of competitors that are capable of keeping increases in prices to the minimum of avoiding them at all. At the same time, the degree to which wage growth is harmful to companies depends on the type of goods that they produce. For instance, due to changes in demand for necessary goods, capitalists that produce luxury items are likely to sustain more significant losses after increases in the minimum wage (Avishai).
Basically, from the Marxist viewpoint, increases in the minimum wage have a different impact on workers and capitalists and slightly alter the imbalance of power between the two groups. The growth of wages may lead to a temporary increase in prices, but such decisions affect companies’ competitive ability to a great extent. Finally, the growth of minimum wage levels inflicts more losses on business players in the market for luxury goods.
Works Cited
Avishai, Bernard. “Obama, Marx, and the Minimum Wage”The New Yorker. 2014, Web.
Jeong, Joowon, and Hakyeon Lee. “Public Attitudes toward the Minimum Wage Debate: Effects of Partisanship, Ideology, Beliefs.” The Social Science Journal, 2019, pp. 1-8.
Menon, Divya. “On the Critical Dimensions of Marxian Political Economy.” An Anthology of Philosophical Studies, vol. 11, 2017, pp. 57-66.