Labour power facts for kids

Labour power is a key idea from Karl Marx, a famous thinker who studied how money and resources work in a society. It means the ability or capacity that people have to do work.

Marx explained that there's a difference between this ability to work (labour power) and the actual act of working (labour). Everyone has labour power, but how it's used or traded has changed a lot throughout history.

In a capitalist system, Marx believed that the power of people to create things often looks like the power of money (capital). When people work, their labour power becomes part of the capital. Work becomes just a job, and workers become a general workforce. The control over how work is done mainly belongs to management.

What is Labour Power?

Karl Marx first explained labour power in his book Capital. He said it is: "All the mental and physical abilities a person has, which they use whenever they make something useful."

He also added that: "Labour power only becomes real when it is used; it only starts working by actually doing something. But when it works, a certain amount of human muscle, nerves, and brain is used up, and these need to be restored."

You can also find more explanations of labour power in Marx's other writings, like Wage Labour and Capital (from 1847) and Value, Price and Profit (from 1865).

Labour Power Versus Labour

Marx took an idea from another philosopher, Georg Wilhelm Friedrich Hegel, about the difference between labour power (Arbeitskraft) and labour (Arbeit). Marx gave this difference a new and important meaning.

For Marx, Arbeitskraft (labour power) is like a "force of nature." It means the physical ability of humans to do work. This includes thinking, using skills like being good with your hands, and also just pure physical effort. In a capitalist society, this labour power becomes something that can be bought and sold. It is also something that workers give up when they sell it to business owners.

On the other hand, "labour" means any activity that humans do to make goods or provide services. For example, building a house or teaching a class. In this way, Marx's idea of labour is a bit like the later idea of "labour services" in modern economics.

Marx believed that understanding the difference between labour and labour power helped solve a big puzzle. It explained why extra value (profit) usually comes from the production process itself. It doesn't just come from the money invested in paying workers.

Labour Power as a Commodity

An advertisement for labour from Sabah and Sarawak, seen in Jalan Petaling, Kuala Lumpur

In a capitalist system, Marx said that labour power becomes a commodity. This means it is bought and sold in the market, just like other goods. A worker tries to sell their labour power to an employer in exchange for a wage or salary.

If a worker finds a job, they agree to work under the employer's authority for a certain amount of time. During this time, the worker performs actual labour, making goods or providing services. The employer can then sell these goods or services and make a profit. This happens because the wages paid to the workers are usually less than the value of what they produce for the employer.

Sometimes, labour power can be sold by the worker on their "own account," meaning they are self-employed. Or it can be sold through an agency that helps people find jobs. Even a group of workers can sell their labour power together as an independent team. Some work agreements can be very complicated, involving many different people or companies.

Normally, workers legally own their own labour power and can sell it freely. However, laws often control how labour power is traded. Sometimes, selling labour power might not be truly "free." It could be a forced sale for various reasons, even if the worker owns their labour power. There are different levels of freedom in this process.

The Value of Labour Power

Labour power is a special kind of commodity because it belongs to living people. Since people own it within themselves, they cannot sell it permanently to someone else. If they did, they would be a slave, and a slave does not own themselves.

Workers can offer their services for a period, but they cannot "rent out" their labour in a way that they can get it back later. Once work is done, it's gone. The only question left is who benefits from the results and how much.

Labour power can only be sold if its owners are legally free to sell it and can sign work contracts. Once a person has worked and used up their ability to work, that ability is tired and needs to be refreshed and restored.

Marx believed that in capitalism, the value of labour power is usually equal to its normal cost of living. This means the cost of meeting the basic human needs that a worker must have to be ready for work each day. This includes the goods and services needed for an average standard of living.

The idea of the "value of labour power" is important because many things can affect how labour power is sold and what workers can buy with their wages. For example, if the government adds a tax on goods and services, workers can buy less with their wages. Or, if prices go up (inflation), workers can also buy less. This can happen even if a worker's pay stays the same. So, a worker's standard of living can go up or down just because things become more expensive or cheaper, or because they can't get certain goods or services.

The value of labour power includes both a physical part (the minimum needs for a healthy worker) and a moral-historical part. This second part includes needs beyond the basic physical ones that have become a normal part of an average worker's life. So, the value of labour power is a historical norm. It's shaped by things like how productive workers are, how many jobs are available, what people consider basic needs, the cost of learning skills, laws about minimum or maximum wages, and the power balance between different groups in society.

Buying labour power usually makes sense for businesses only if it can create more value than it costs to buy. This means that using it should bring in more money than what was spent on it. However, in Marx's theory, labour power also does other important things. It helps to keep and move the value of capital. If workers stop working, the value of machines and buildings often goes down. It takes constant work to keep their value. When materials are used to make new products, part of the value of those materials is also moved to the new products.

So, labour power might be hired not just to create more value, but also to protect the value of a business's assets. Without this work, the assets might lose even more value than the cost of the labour. Or, it might be a necessary cost to transfer the value of an asset from one owner to another. Marx called this kind of labour "unproductive" because it doesn't add new value to the total capital. However, it can still be very important work.

Wages

Marx saw money-wages and salaries as the price of labour power. Workers can also be paid with goods or services. This price is usually linked to the hours worked or the amount produced. The price can be higher or lower than the actual value of labour power. This depends on things like how many jobs are available, special skills, laws, and how well workers can negotiate.

Normally, if the government doesn't stop it, high unemployment will lower wages. On the other hand, full employment (when almost everyone who wants a job has one) will raise wages. This follows the basic rules of supply and demand. But wages can also be lowered by high price inflation and taxes on what people buy. So, it's important to look at the difference between how much money you get (nominal gross wages) and what you can actually buy with that money (real wages), after taxes and price changes.

The cost of labour for an employer is not the same as the actual buying power a worker gets. An employer often has to pay taxes and fees to the government for their workers. These might include contributions for social security or retirement benefits. There are also often administrative costs. For example, in the United States, out of the total money employers spend on labour, workers might get about 60% as take-home pay. The other 40% goes to taxes, benefits, and other costs. Employers might get some of this money back through tax credits or lower business taxes.

There is usually a constant disagreement over wage levels between employers and employees. Employers want to keep wage costs low, while workers want to increase their wages or at least keep them the same. How wages change depends on the demand for workers, the level of unemployment, and how well workers and employers can organize and act on pay demands.

Marx thought of wages as the "outside form" of the value of labour power. How workers are paid in a capitalist society can vary a lot. But there was always a part of the work that was paid for and a part that was not. Marx believed that the "best" way for capitalism to pay wages was through piece wages. This is when a worker is paid for each item they produce. In this system, the business owner only pays for the work that directly adds value to their capital. Marx saw this as the most efficient way to use labour power.

Using Labour Power

When labour power is bought and a work contract is signed, the worker usually isn't paid right away. First, the labour power must be used in the production process. The work contract is just the agreement that brings the worker's ability together with the tools and materials needed for production.

From that point on, Marx argued that labour power, when it's being used, changes into capital. Specifically, it becomes variable capital, which helps in the process of making capital grow in value.

When labour power is used as variable capital, it creates both useful things (like products) and new value. It also helps keep the value of other business assets (like machines) from going down. And it moves part of the value of materials and equipment to the new products. The main goal is to make the invested capital more valuable. This means that, if all else is equal, the value of the capital is kept safe and also grows because of the work done by living people.

At the end of the workday, labour power has been used up quite a bit. It needs to be restored through rest, eating, drinking, and having fun.

Doctors' estimates for how much holiday time full-time workers need to fully recover from work stress vary by country. But generally, about three continuous weeks of holiday is considered best for the average worker's body and mind.

Statistics from the International Labour Organization (ILO) show that average hours worked and average holidays are very different in various countries. For example, workers in Korea work the most hours per year, and Americans have fewer official holidays than people in Western Europe.

Some researchers have wondered if working extra hours really makes workers much more productive. Especially in service jobs, the work done in five days could often be done in four. The hardest thing to measure is how intense the work is. Some people think that the number of work accidents can be a good way to measure this. If a company lays off workers but still produces the same amount of goods or services, or even more, with the same technology, it often means that the work intensity for the remaining workers has increased.

Reproduction of Labour Power

The ability to work needs to be reproduced or renewed. This means that workers need to be fed, housed, educated, and cared for so they can keep working. This renewal happens in many ways, often outside of paid work.

For example, many feminist thinkers who follow Marx's ideas have pointed out that unpaid household work, often done by women, helps to create, maintain, and restore people's ability to work. This is like a huge "free gift" to the capitalist economy. Studies that look at how people spend their time show that unpaid and volunteer work makes up a very large part of the total hours worked in a society. Markets rely on this unpaid work to function at all. Some feminists have even asked for the government to pay "wages for housework." This idea often clashes with the legal rules of capitalist governments, which usually only take financial responsibility for citizens or families who don't have other ways to get money or support.

The Role of the Government

The government can affect both the value and the price of labour power in many ways. It usually controls wages and working conditions in the job market to some extent. For example, it can do this by:

• Setting minimum and maximum wage rates for work.
• Setting maximum and minimum working hours, and the age when people can retire.
• Setting basic requirements for working conditions, workplace health, and safety.
• Setting rules for work contracts, how trade unions are organized, and how wages are negotiated.
• Legally defining the rights and benefits of workers.
• Changing tax rates and fees for workers and employers.
• Adjusting social insurance policies, like pension payments.
• Creating and changing unemployment benefits and other social support.
• Helping workers or their employers in different ways through benefits or extra payments.
• Influencing general price levels through economic policies, or by setting price controls for goods and services.
• Regulating what goods and services workers can buy.
• Watching over workers on and off the job, and dealing with crimes related to workers' lives.
• Requiring young workers to do military service for a set pay.
• Creating more jobs through various policies, or allowing unemployment to grow.
• Encouraging or preventing workers from moving to different jobs or places.
• Allowing or stopping immigrant workers from coming in, or workers from leaving the country.

Marx knew about these government influences. In Das Kapital, he gave many examples, often from official government reports and factory inspections. Part of the government's job is to make sure that general conditions for workers' well-being and renewal are met. These are conditions that individuals and private businesses cannot provide on their own. For example, because:

• Providing these conditions needs an authority that is above different competing interests.
• Meeting these conditions is too expensive for private companies, as they might not have enough money.
• It's technically not possible to make these conditions private.
• The conditions to be provided are not profitable enough, or too risky for private companies.
• There is a specific political or moral reason for the government to step in.

However, Marx didn't create a full theory about the government's role in the job market. He had planned to write a separate book on wages and the labour market, but he couldn't finish it, mainly due to poor health. Still, Marx made it clear that capitalism "removes all legal or traditional barriers that would stop it from buying any kind of labour-power it wants, or from using any kind of labour."

In modern times, because the government has a big effect on wages and the value of labour power, new ideas like the social wage (benefits provided by the state) and collective consumption (services like public transport or healthcare) have come up. If the government takes as much money from workers through taxes as it gives back to them, then it's hard to say if the government is truly "paying a social wage." However, often the government redistributes income, meaning it takes money from one group of workers and gives it to another, reducing some incomes and increasing others.

Making the Job Market Flexible

The value of human labour power is closely connected to what workers, as citizens, believe they need. It's not just about supply and demand; it's also about human needs that must be met. So, labour costs have never been just an "economic" or "business" matter. They are also a moral, cultural, and political issue.

Because of this, governments have usually put strong rules and laws on how labour power is sold through work contracts. These laws affect things like the minimum wage, how wages are negotiated, how trade unions operate, what employers must do for employees, hiring and firing rules, labour taxes, and unemployment benefits.

This has led to repeated complaints from employers who say that job markets are too heavily regulated. They argue that the costs and duties of hiring workers are too much for businesses. They also say that too many rules stop workers from moving freely to where they are really needed. If job markets were less regulated by removing too many legal restrictions, businesses argue that their costs would go down, and more workers could be hired. This would lead to more jobs and economic growth.

However, trade union representatives often argue that less regulation actually lowers wages and worsens working conditions for workers. This, in turn, could reduce people's ability to buy products, leading to slower economic growth and a drop in living standards. They say it could also lead to more temporary jobs and "contingent labour" (workers hired for specific projects or periods).

They argue that because employees and employers are not equal in the market (it's usually easier for an employer to lose an employee than for an employee to lose an employer), employees must be legally protected from unfair treatment. Otherwise, employers might just hire workers whenever it suits them, without caring about the workers' needs as citizens.

In some countries, there's another issue: unions are part of the government system. They might not be interested in collecting complaints from individual employees, hiring enough staff to help members, supporting employees' legal cases, or speaking out against the government. For example, in China, some workers have been jailed for criticizing the official unions.

Often, the call for "labour market flexibility" is combined with a demand for strong immigration controls. This is to stop any movement of workers that would only be a burden for capital accumulation (making more money). The term "flexibility" is used because, while money (capital) should be able to move freely around the world, the movement of workers must be strictly controlled. If this control doesn't exist, it is argued, it could mean extra costs for employers and taxpayers.

Criticism

Some thinkers, like Ian Steedman, have argued that Marx's idea of labour power was actually very similar to what David Ricardo and Adam Smith had already said. So, they believe Marx wasn't saying anything truly new. However, Marx's view is different from the "natural price of labour" that earlier economists talked about. Marx believed that the "free play of market forces" doesn't automatically lead to the "natural price" (the value) of labour power.

Because labour power is a unique and special commodity, located within a living worker, it does not follow all the same rules as other types of goods. Depending on social conditions, labour power might be traded for prices that are much higher or much lower than its real value for a long time. Marx only assumed that labour power was traded at its value to show that even in that case, workers were still being economically taken advantage of. But he knew that labour power often didn't trade at its value, either because of bad conditions for negotiating wages or because there weren't enough workers available.

A more recent criticism by Professor Marcel van der Linden points out some issues with Marx's idea. He asks: "Marx's idea is based on two questionable assumptions: that labour must be sold by the person who actually has and owns that labour, and that the person selling the labour sells nothing else. Why does this have to be the case? Why can't labour be sold by someone other than the worker? What stops someone who provides labour (their own or someone else's) from offering packages that combine labour with tools? And why can't a slave do wage labour for their master on someone else's property?" These questions were first raised in the 1980s by Tom Brass.

The buying and selling of human work can take many more forms than Marx recognized, especially in the area of services. A modern information society allows for all sorts of new ways for people to earn money.

Marx himself said that capitalism "removes all legal or traditional barriers that would stop it from buying any kind of labour-power it wants, or from using any kind of labour." The idea of the value of labour power referred to the underlying economic relationship, not to be confused with all the different kinds of work contracts that are possible.

See also

In Spanish: Fuerza de trabajo para niños

• Abstract labour and concrete labour
• Compensation of employees
• Reserve army of labour
• Surplus labour
• Surplus product
• Wage labour