Introduction
One of the hefty criticisms of the early stages of industrialisation is that people were used as capital assets to facilitate the production processes particularly in the US.
Discussing the impacts of capitalisation of labour on semi-skilled, unskilled, and skilled workers, Kremer points out how the workers were misused following the application of concepts of labour capitalisation during early economic times where they worked under intensively poor conditions (553).
The same concept is developed by Dubofsky who argues that, in the early industrialisation age, many employers preferred low priced sources of labour such as children, females, and immigrants who were underprivileged (35).
However, the contemporary labour markets of the United States views labour as a distinct resource that can be isolated from the traditional forms of capital since it is subject to controls by forces that are extrinsic to an organisation or any industry employing people.
From this perspective, the focus of this research proposal is to examine whether the united State, over time, has fundamentally improved the position of wage labour or it has simply maintained the position of capital. To achieve this noble goal, statistics from the government of the United States are deployed as the primary source of data.
Scholarly findings are also deployed to help in integrating the primary and secondary data findings to give a well-informed position on whether United States still clings to the position of capital or it has improved the position of wage labour.
The US Department of Labour: Why was it Established?
In responding to the question of whether the United States has improved the position of labour or has been maintaining the position of capital, the first chapter of the research will review the circumstances that lead to the establishment of the U.S. department of labour, its mandates and its achievements in improving the welfare of the United States’ workforce.
The chapter will argue that, in an attempt to enhance change of perception that labour can be capitalised and hence subject to operation of market forces to determine labour pricing, several improvements to wages have been realised in a number of ways since the establishment of the United States department of labour.
In fact, the U.S. department of labour is mandated to promote, foster, and develop wage earners’ welfares so that their working conditions can be improved coupled with making sure that they are engaged in profitable employments.
For precise realisation of its mandates, the U.S. department of labour is given the authority to administer various federal laws of labour, which are meant to guarantee all the employees rights to working conditions.
The US Employers Deprived of their Role to Determine Wages
Under the ideologies of labour capitalisation, the employer has the supreme ability to determine the right wages to be paid to the workers so that the production process can proceed within the limits of the acceptable levels of profitability.
The main question addressed in chapter two of the research will be the manner in which this supreme ability of the employers has been eroded in the United States’ labour markets so that the position of the labour wages is improved. To achieve this goal, the chapter will investigate issues such as role of the United States’ government in influencing the workers coupled with their movements.
In this regard, it will be maintained that the main goal of government engagement in the workers’ movements is to ensure that the workers’ unions are democratic and independent from coercion by the employing agents.
This will confirm Kremer’s argument that states’ role in enhancing freedom of labour unions in United States is aimed at ensuring that workers are shielded from being slaves of the state thus not acting as capital assets for the employers (556). According to Dubofsky, this is achieved through enactment of administrative and political policies coupled with manipulation of various legislative policies of labour unions (26).
Hence, labour unions are made stable, which has the implication of making workers have the motivation of joining unions as the only way of fighting for their wages, rights, and resolution of wages conflicts with the employers without the risks of being sacked.
Additionally, the chapter will argue that the position of the labour wages has been incredibly improved through the creation of social stability emanating from the brave liberal ideas of corporate leaders that denying labourers the freedom and extension of ideologies of exploitation of humans’ resource are not the avenues for enhancing profitability.
The US Labour Legal Frameworks
Still in chapter 2, as a mechanism of setting the theoretical constructs of the research, the chapter will also consider scholarly criticisms and insights as to whether the United States, through its labour legal frameworks, has altered the agrarian society’s social, political, and economic welfare of the workers.
In this argument, the chapter will draw the lesson learnt in the 19th century’s riots against establishment of power hegemonies. It is contended by Huff that such riots lead to the emergence of new demands, which truncate to making the United States workforce have both cultural and social autonomy in the work places (247).
This autonomy was a major stepping-stone towards the creation of enabling platforms for workers to claim for wages that are commensurate to their efforts put in the production process without the fear of being prejudiced by the employers.
The acquired autonomy also made employees to incredibly engage in labour strikes. Indeed, due to this autonomy, neither the employers nor the government managed to curtail the efforts for the workers to campaign for better wage positions. For instance, President Roosevelt’s government never succeeded in pushing for the legislative demands enacted by the American federation of labour (Lane and Pasteur 716).
With this failure, the federation had no option rather than to link up with the Woodrow Wilson regime to promote the quests placed by employees. This resulted to an elementary increment of wage position of the workers.
Therefore, exempting labour markets from the action of free market forces is an immense challenge. However, one way of doing this is setting minimum wages. The application of this approach to enhancing wage position of the workers is discussed in chapter three of the research.
Setting Minimum Wages
In any capitalistic economy, when the free market forces are permitted to regulate labour market dynamic, wage inequalities are produced. To enhance equality, Laliberté argues, “a strong minimum wage can help make a genuine difference in outcomes” (8). Setting minimum wages prevents the emergence of low wage employees coupled with continued wage inequity growth.
The debate on minimum wages is widely controversial since moral considerations as to what comprises a minimum wage that would enable workers together with their families to sustain their lives come into play.
Arguably, setting of minimum wages is meant to ensure that employers do not employ groups that are vulnerable to capitalisation such as emigrants and children by virtue of the fact they would be willing to accept low wages and hence be capitalised so that the employers reap optimal profits at their expense.
In the quest to improve the labour wages through the perspectives of minimum wages, concepts of living wages have emerged in the US’ labour market terminologies. According to Luce, “Basic Family Budget Calculator developed by the Economic Policy Institute, the Self-Sufficiency Standard, developed by Diana Pierce, and the Wider Opportunities for Women” (13) are some of the approaches that are used to compute living wages.
Both of these approaches deploy the data collected by the US’ government institutions to arrive at an estimation of minimum housing cost, transportation, childcare, food, taxes, and healthcare costs. When all these costs are summed up, the government, through the department of labour, is able to come up with the total annual income required for general workers to sustain their lives.
The block figure is then converted into hourly pay rates. The figure arrived at is usually higher than the minimum wage set by federal governments (Luce 14). Another approach of ensuring that the wage position of the employees is improved is setting the minimum wages at levels that would enable workers who work full time to attain the federal poverty line.
Primary Sources
Amid the attempts by United States to put in place mechanisms of improving the wages position of the workers, statistics indicates that instances of non-compliance to the guidelines are still evident.
For instance, according to Sates Department of Labour: Wages and Hour Division 2007 statistics facts sheet, “results for the fiscal year 2007 show a total of 4,672 minors who are found illegally employed, an average of 3.7 minors illegally employed per investigation” (Para 10).
Many of these violations involve situations where children who are under the age of 16 were found to work for many hours, very late in the night, and or very early in the morning. This is clearly a violation of working hour standards. With regard to United Sates Department of Labour: Wages and Hour Division 2006 statistics facts sheet, “WHD assessed nearly $3 million in child labour civil money penalties in the fiscal year 2006” (Para. 9).
On the other hand, with regard to United States Department of Labour: Wages and Hour Division 2007 statistics facts sheet, WHD collected “nearly $4.4 million in child labour civil money penalties in fiscal year 2007” (Para.10).
In 2008, according to the United States Department of Labour Employment Standards Administration, this figure reduced only by 0.2 million to stand at 4.2 million U.S. dollars (5). This statistics indicates that the idea of capitalisation of labour is still ingrained within the minds of some employers.
Table showing Preliminary third-quarter 2012 productivity measures as a percent change from previous quarter, at Annual rate (Q to Q) and from same quarter a year ago (Y to Y)
Source: United States Department of Labour Bureau statistics (2)
Discussion: The Way forward for the US Labour
In the last chapter of the research; chapter 4, discussions and inferences will be drawn on the capacity of United States to precisely shun from capitalisation of labour as an endeavour to improve labour positions. However, it is crucial to note that alleviation of permitting market forces to determine labour prices rather than putting in place policies for setting minimum wages is driving the production sector into difficulties.
This perhaps explains why there has been massive relocation of the United States-based factories such as Addidas to base their productions in Asia. In the new production regions, such companies have been accused of exploitation of workers in the quest for enhancing productivity.
For instance, Nike and Addidas have been accused of child labour and paying very low wages to their employees in the foreign-based production factories. In context of this example, the question that remains is whether the approaches of wage improvements adopted by the US are failing thus prompting it to revert to the early industrialisation age where labour was capitalised.
Conclusion
Capitalisation of labour means that people working in industries could be optimised to help in yielding optimal profitability. However, the paper argued that this was a concept applied in the agrarian society. Due to societal transformations, the paper holds that the United States has improved labour wages since the age of agrarian revolution rather than focusing on the ideologies of labour capitalisation.
Nevertheless, due to an intensive search for a mechanism of making the industrial sector competitive, there have been attempts by many firms such as Addidas and Nike to relocate to regions where labour costs are low. Consequently, a dilemma surfaces about whether labour market forces should be applied to determine the pricing for labour, or wages need to be set to certain minimum levels as a mechanism of improving them.
Works Cited
Dubofsky, Melvin. The State and Labour in Modern America. North Carolina: The University of North Carolina Press, 1994. Print.
Huff, Ann. “Persistent Effects of Job Displacement: The Importance of Multiple Job Losses.” Journal of Labour Economics 15.2 (1997): 165-253. Print.
Kremer, Michael. “The O-Ring Theory of Economic Development.” Quarterly Journal of Economics 108.12(1993): 551-627. Print.
Laliberté, Pierre. “Social justice and growth: the role of the minimum wage.” International Journal of Labour Research 4.1(2012): 7-10. Print.
Lane, John, and Michael Pasteur. “The Low-Wage Labour Market: Challenges and Opportunities for Economic Self-Sufficiency.” Journal of Labour Economics 16.5 (1998): 702-716. Print.
Luce, Sophanie. “Living wage policies and campaigns: lessons from the United States.” International Journal of Labour Research 4.1(2012): 12-45. Print.
United Sates Department of Labour. Wages and Hour Division: 2007 Statistics Facts Sheet, 2007. Web.
United Sates Department of Labour. Wages and Hour Division: 2006 Statistics Facts Sheet, 2006. Web.
United States Department of Labour Bureau statistics. Economic News Release, 2012. Web.
United States Department of Labour Employment Standards Administration. Wage and Hour Division: Wage And Hour Collects Over $1.4 Billion In Back Wages For Over 2million Employees Since Fiscal Year 2001, 2008. Web.