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Understanding of Contemporary Labor Market by Marxist Concept of Exploitation Essay



The labor market is equivalent to any other market. In fact, it is where labor is traded for wages. Inherently, there are assumptions that guide the labor market. For instance, there is a direct correlation between human resource (labor) and income distribution (wages and profits). Hence, different theories have been advanced regarding labor markets.

Theories developed Marxists tend to advocate for fair distribution of income between the employer and the employee. However, this is rarely the case given that those who receive the highest rewards do so based on merit.

Marx theory of rebellion and labor relations encounters considerable criticism although it is not analyzed directly in international research. The theory persistently attracts class theory that is boosted by uninspiring alternatives presented in sociology (Parkin 119).

Marx held the position that proletarian rebellion would take place in first world countries including the United States and European countries. Other theories hold the meritocracy perspective where those who are lowly waged possess the least labor market value.

This paper examines the extent at which Marxist concept of exploitation is useful in understanding the contemporary labor market.

Marxist ideas

Marx presented his audience with two sets of ideologies. The first was the theory of society. The theory explains how the community functions in view of the nature of capitalism. The view is relevant in describing what is happening to the society. Conversely, Marx considered capitalism as extremely unsatisfactory. He sought to have capitalism abolished through violent revolution.

He advocated for the establishment of a communist society. The success of his idea would have seen employees have better working conditions with an increase in remuneration. Marx within the framework of ‘factory despotism’ viewed conflict in class between informal employment and white-collar employment.

The conflict intimately matches the social confrontation regarding the sharing of rewards and prerogatives of command (Robertson 160). This is particularly the case in industrial situations where even the low status of white-collar personnel is cast in the position of administrative subalterns (Boswell and Dixon 545).

Within the context of capitalism presented by the distinctive industrial organizations, the sociological model of class holds the position that recommends capitalism as a substitute of the view constructed around the right of individuals to employment. Few people in the western societies do not support Marx idea of violent revolution. Some think that capitalism is desirable.

Marx concepts are useful in understanding the community without accommodating Marxists condemnation of capitalism. The advocacy for violent revolution illustrates his opinionated values in respect of politics.

Marx ideas are limited to the relations between financial exchanges under circumstances where the right to capital is not rationalized. He viewed capitalism as a means by which individuals earn wealth simply by virtue of holding property.

Non-standard work

The contemporary labor markets across the globe in the last three decades have been marked by changes in the nature of job. The traditional features of the nature of work include its open-ended nature. In fact, the temporal specificity in the nature of work does not apply to the wide range of workers. According to the view expressed by Marx, workers in capitalist economies are no longer regarded as contributing sufficiently to their work.

Consequently, the employees are either underpaid or given more duties to perform at workplace. The form of contemporary employment presents employers with the opportunity to adjust labor usage with respect to the changes in labor requirements.

In the wake of the 21st century in the United Kingdom, part-time employees, those in informal employment and impermanent workers comprised of more than 40 percent in comparison with less than 30 percent in the 1980s. Currently, non-standard workers in the United States are estimated to be 30 percent, which is an increase of threefold compared to the 1980s (Cuneo 290).

Marx and exploitation

Many scholars question whether Marx aimed to make any ethical use of the exploitation ideas. In fact, Marx sought to highlight ethical utilization of exploitation but his definition of exploitation failed to render this end. He gave an ethical definition of exploitation that is resistant to a wide range of standard objectiveness.

The shortcomings of Marx explanation of exploitation within capitalist organization are less precise to capitalist societies. The post-war expansion of the communal sector has gradually given rise to an increasing range of non-manual groups in government circles and welfare organizations (Cuneo 290).

The definition offered by Marx regarding exploitation is typically given in terms of the concept of surplus values. In turn, the concept of surplus value is perceived to depend on the labor concept of value. The concept that the significance of any product is proportional to the quantity of ‘socially necessary’ labor exemplified in it holds with regard to Marxists’ perspective.

With respect to the view on the creation of value, there is typically nothing unique about labor. Some scholars such as Robert Nozick argue that the collapse of the labor concept of value means the collapse of the Marxist theory of exploitation.

The exploitation concept from Marx perspective is the disparate exchange of labor for products (Nozick 257). The swap is unequal if the amount of labor involved in the production of commodities that the employee can buy with the income is less than the quantity of labor used to make the income.

Rationally, treating the intermediate and lower white-collar employees as part of a governing class implies that the governing groups typically identify themselves with the interest of resources and management as opposed to the interests of planned labor. The treatment of workers in the private sector is easy to accomplish compared to the public sector.

Economic sub-structure

Marx extended the argument that financial situation is the most essential determinant of all other communal aspects. These include institutions and ideas such as justice systems, schooling and ethics.

Such elements fall at the core of the societal ‘super-structure’. In view of contemporary employment, Marx can be regarded as a materialist with strong intuition for material possession, which is a reward for work. He opposed the viewpoint of Hegel that regarded thoughts as the most fundamental verifiers of accounts (Trainer 1).

Marx held the position that leading ideologies were the result of materialistic situations. Marx was opposing the restructuring that presented the plan that sheer amendments in thought could transform the humanity. According to Marx, capitalist communities comprise of industrialists who owned and run the productive supplies. The employees only own labor and work for the industrialists.

Thus, the industrialists own the goods and sell at a profit. The workers are exploited through meager pay for the work done. Consequently, the workers remain in abject poverty while the capitalists continue to accumulate capital.

In the industrialist community, capital, equipment, plants and other resource are the essential productive elements. The industrialists exploit the society given that the members of the society do not own the productive factors.

It is the different perspective involved in capitalism that drives the workers to view the differences between them and the capitalists as conflict that require violent revolution. In industrialist societies, the industrialists gain the most. They receive a disproportionate share of affluence, authority, advantage and rank.

The situation according to Marx serves the interest of the capitalist thus elevating the conflict between the employers and the employees. Marx highlights the need to understand that a majority of the people own some riches including houses and small portions of land. However, this is not capital.

A small number of individuals own capital including money and industrial units. The proportion is estimated to be below 2 percent of the global population.

Marx’s Predictions

Marx viewed history as the principle that explains the vibrancy of the past. The basic ideology involved is the Hegelian ideology of dialectical development. In this situation, a thesis exists. Another idea develops which opposes the initial idea (antithesis).

Eventually, the ideas are determined by a ‘synthesis.’ The resulting thesis becomes the novel thesis. In view of history the class conflict involved in capitalist societies between the capitalists and the employees ends through some kind of revolution. The conflict is determined upon the emergence of a new social order, which eventually stabilizes. This was the case during the early capitalist era.

History is hence a fundamental element of material and social relations. The correlations between the type of industrial knowledge in use, the communal correlations and the running of these kinds of production are what determine the characteristics of capitalist communities. These relations move social settings from one to another. Marx believed that this recurring cycle would cease at some point.

The idea of capitalism and the ideology of the working class will result into a synthesis that will see the attainment of a classless society.

This is with respect to the fact that the continuation of class conflict between industrialists and the employees has generated change for centuries, which will have to cease in a classless community. However, this does not mean the end of additional change. Political change may also occur according to Marx.

The changes in employment emanating from capitalist perspectives and the idea of exploitation will not end so long as there is conflict of interest. The drivers of production in the industrialist communities include the factory method and rigorous machine knowledge.

This mode demands that huge investments of resources be put in factories. The knowledge required demands that the potential employees compete for the limited employment opportunity. Consequently, the capitalists will take advantage of the situation to hire knowledge workers at lower wages.

This aspect is observable in multinational companies that shift production offshore in countries where skilled workers are paid cheaply. Social correlations of production in industrialist communities is between the ownership of capital and the running of entities attained from the exploitation of communities’ productive resources by the few who invest only if they know that profit will be made.

In the contemporary labor market, the concept of exploitation applies where community members are required to sell labor to the industrialists. They have to recognize commands at workplace. The employees consequently have no stake in the manufacturing process above the pay packages (Doogan 70).

Marx argued that only labor should earn money. Conversely, Marxists maintain that the resources generated must hardly have the capacity of generating additional funds. This means that Marxists hold the idea that wealthy individuals should not get interested in their investment. The argument is extended from the reasoning that capitalists get more income without participating in the production.

Fundamentally, Marxists believe that industrialist profit making is composed of employees. When the industrialist vends goods produced by the employees and gets more for the commodity than originally paid for to produce, the capitalist takes the value created by the employees. The employees’ labor facilitates the creation of value attained from the sale of the product but only get a percentage of the value.

This means that the industrialist who runs the production processes exploits the employee. However, the industrialist does not work when creating the commodity. It is this perception that Marxists insist that capitalist should not receive income as interest earned on the investment.

Marxists’ disagreement appears to be obvious with respect to the stakeholders hardly having any connection to the production. They only invest capital in the company and consequently generating returns devoid of carrying out the jobs. Marxists urge that it would be desirable to organize the community in a way that every individual owns and runs the productive resources.

Additionally, no one should get an income he or she has not worked for during the production process. In the modern labor market, this argument puts capitalists and workers in a collision course. The neo-classical model on the labor market holds a different view on the argument given that it is typically applied in the contemporary labor market.

Typically, the neo-classical perspective holds the view that the labor market functions in a way similar to that of the commodity market. The labor offered by the employee in diverse sector is ‘sold’ by the employee and ‘bought’ by the industrialist. The cost of labor is primarily set by the law governing supply and demand. The labor market inherently seeks to establish its own accord and equilibrium (Gomme 18).

The principle of neo-classical in the labor market holds that when there is an over-supply of one type of labor say barbers, the wage of such labor significantly falls. This is due to an increase in the competition among workers who offer it.

The compensation for labor is driven down when employers pursue their interest characterized by profit maximization. The capitalists enjoy a large pool of potential labor suppliers who offer labor at the lowest prices.

Conversely, when there is limited kind of labor such as pilots the potential employees with necessary expertise, competences, familiarity and training have the opportunity to demand for higher price for labor including improved working conditions, enhanced benefits and high remuneration.

In this regard, the capitalists compete with each other through offering higher wages to ensure the necessary supply of labor from a considerably small pool of workers.

The imbalance between barbers and pilots will be redressed as people attracted by high wages choose to train and acquire experience in flying. Similarly, the excess in barbers will be redressed as the career becomes less attractive due to low wages. A balance between supply and demand will consequently be restored.

Marxist model and the surplus value

The contemporary labor market is influenced more through the neo-classical perspective than the Marxists’ perspective. Marxists hold the view that the correlation between the ‘value’ created by employees and the respective ‘rewards’ offered for such labor is significantly multifaceted than that advocated by neo-classical theorists.

Marxist labor economists hold the position that the true value of labor is never returned to workers in capitalist markets. They insist that employees in the modern labor market are exploited as they receive only a portion of the actual value of their labor. This notion often leads the employees to seek employment that is highly demanding to be able to receive higher reward for the labor offered (Kalleber 482).

Conversely, the employers in the industrialist productive systems exploit workers to create ‘surplus value’ for the labor. The surplus within the capitalist labor markets inherently flows to the capitalist instead of the workers.

According to Marxist theorists, waged labor is caught in a ‘trap’. The salary is never able to realize the actual value generated. A good example in this situation would be an employee hired to make caps using a cap-making machine. The worker is paid $15 per hour. In every hour, the employee produces 10 caps. The market value for each cap is $7. The capitalist thus pays the worker $15 dollars for work that produces a value of $70.

There is a difference of $55. However, the capitalist must deduct overhead costs and supplies. The overheads may be an additional $15 per hour hence leaving the capitalist with a whopping $40 per hour of surplus value. In a non-capitalist labor market the worker would have hand-woven his own caps. He would also have owned both the tools (means of production) and the resulting caps (labor products).

The complete value of labor could be exchanged for other commodities and services. Unfortunately, according to Marxist perspectives, in a capitalist labor market the worker owns neither the products nor the means of production and materials utilized in producing the commodities.

In this context, the worker holds no claim to the surplus value created. In order to reword Marx, the worker only owns his ‘hide’. As such, the worker can only get a ‘hiding’. The worker only owns his labor, which notwithstanding its net value to the capitalist is compensated at a reduced rate than the authentic value it creates.

According to Marxists’ view, the greater the ‘value’ a worker can generate from labor the weaker the worker develops interest in an industrialist labor market. The additional ‘value’ is fitted as surplus, which nevertheless is not given to the worker.

In this regard, the Marxist perspective concerning income distribution hardly follows the differences in ‘human resources’ but the correlation between the worker and the means of production (Wolff 14). Capitalists who have owned the means of production reap the greatest rewards and monetary returns.

The employees who have no access to the means of production are forced to sell labor power for remuneration. They are consequently denied the opportunity to secure the true value of their labor.

In Marxists’ perspective, the contemporary labor market is unfair besides being highly structured. The current employment platform requires more than investment in human resources to escape from the deprived positions in the labor market. It demands further essential social changes that address the organizational disparity in the industrialist labor market (Tilly 14).

The urge to accumulate resources according to Marxists is the determinant of what happens in the community. The differences inherent in capitalist societies between the employer and employee are contributed by the urge of the employee to establish own businesses. As a result, many individuals opt to enter into sole-proprietorships to avoid taking orders from employers but create profits to better their lives.

When such moves fail to yield, individuals resort to other means of ensuring access to the true value of their labor such as joining unions. There is unending pursuit of profitability not only among employers but also among the employees. The profits realized by capitalists are ploughed back to attain more profits. This creates a never-ending twist of resources accumulation.

The quest to accumulate capital leads to inventiveness, social and technological change. The reason why there is a McDonald in every street and increasing manufacturing in Australia is the aforementioned reasons. The changes have come given that the firms are competing with each other to increase profitability. In addition, employees are utilizing innovation to remain relevant to the employer.

Knowledge workers are contemporarily required by the contemporary capitalist labor market. It has become essential for any person seeking employment to possess requisite training, skills, knowledge, competence and proficiency (Wolff 115).


The labor market comprises of a discriminatory playing field. Provided the labor market is allowed to operate without hindrances, the potential employees enter the market with an opportunity that is determined purely by human capital one has to offer. This one determinant influences whether or not an employee will receive considerably high value for the labor they offer.

Marx’s theory is currently overtaken by events in the labor market. The trends in the contemporary labor market reflect that there is a significant change of approach regarding the relationship between employers and employees.

The employees currently recognize the merit that will present them with the opportunity to receive the rewards in terms of wages that they deserve. The pursuit of relevant education, competences, skills and abilities by prospective employees reflect a change in attitude from Marx’s theory.

Works Cited

Boswell, Terry and William Dixon. “Dependency and Rebellion: A Cross-National Analysis.” American Sociology Review, 55.3 (1990): 540-559. Print.

Cuneo, Carl. “Exploring Exploitation.” Canadian Review of Sociology and Anthropology, 15.2 (1978): 284-300. Print.

Doogan, Keller. “Long-Term Employment and the Restructuring of the Labor Market in Europe.” Time and Society, 14.1 (2005): 65-87. Print

Gomme, Peter. “What Labor Market Theory tells us about the ‘New Economy.” Economic Review, 34.3 (1998): 16-24. Print.

Kalleber, Alex. “Organizing Flexibility: The Flexible Firm in a New Century.” British Journal of Industrial Relations, 39.4 (2001): 479-504. Print.

Nozick, Robert. Anarchy, State and Utopia, Oxford, UK: Basil Blackwell, 1974: 253-262. Print.

Parkin, Frank. Marxism and Class Theory: A Bourgeois Critique in Social Class and Stratification: Classic Statements and Theoretical Debates, Maryland, USA: Rowman & Littlefield, 1998: 1-269. Print.

Robertson, John. “Transaction Cost Economics and Cross-National Patterns of Industrial Conflict: A Comparative Institutional Analysis.” American Journal of Political Science, 34.3 (1990): 153-189. Print.

Tilly, Catherine. “Labor Market Inequality, Past and Future: A Perspective from the United States.” Gender Segregation, 2.2 (2006): 13-28. Print.

Wolff, Jonathan. “Marx and Exploitation.” Journal of Ethics, 3.2 (1999): 109-120. Print.

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IvyPanda. 2020. "Understanding of Contemporary Labor Market by Marxist Concept of Exploitation." January 23, 2020. https://ivypanda.com/essays/understanding-of-contemporary-labor-market-by-marxist-concept-of-exploitation/.


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