This is essentially Marx’s theory of surplus value (the correlation between exploitation of labor and profits) in a nutshell:
Big U.S. companies have emerged from the deepest recession since World War II more productive, more profitable, flush with cash and less burdened by debt.
… Overall, the Journal found that S&P 500 companies have become more efficient—and more productive. In 2007, the companies generated an average of $378,000 in revenue for every employee on their payrolls. Last year, that figure rose to $420,000.
In other words, each worker produces on average $420,000 worth of wealth, minus raw materials, tools, machinery, advertising, etc. Even applying extremely conservative figures, let’s say that all these latter “fixed” costs account for 90% of total production costs. That still leaves $42,000 per worker.
And even if the worker is paid an amount that would put them on the high-end of the national average workers’ wage — around $35,000 (which for Starbucks or McDonald’s workers would realistically be more like $21,000) — we then are left with around $7,000 in surplus value for each worker.
And this is where profits ultimately come from — it is the difference between the total new wealth a worker generates in the course of their labor, and the portion of that wealth that goes back to the worker in the form of wages (and benefits, if lucky or unionized).
If a company employed half a million workers nationwide, at the rate cited above, they would have made $3.5 billion in surplus value, or profit, last year (which is approximately what McDonald’s actually reported).
When the Wall Street Journal says that companies have become more “productive” and “efficient,” what they are really saying is that the rate of exploitation has increased. That workers are being payed a smaller and smaller share of the total wealth they are creating.
Thus, theft, plain-and-simple, on the part of the capitalist against the worker, lies at the heart of our entire economic system. It is the reason why the 1% richest Americans who own these companies constantly get richer, while the rest of us see our wealth either stagnate or decline …
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