[OPE-L] empirical measurement of changes in the value of labour-power

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Wed Dec 12 2007 - 11:24:49 EST

I'm a bit strapped for time, but I'll try for a reply:

- the costs of replacing the worker (including the costs of raising children)
- the paid and unpaid labourtime involved in reproducing the worker to arrive each day fit to work

As regards the first, there are financial costs involved in hiring and firing workers, both costs to the worker, to the firm, to the state, and to related parties. The workers costs could involve the loss of earnings, legal fees, health costs, tax costs etc. The firm's costs could likewise include all kinds of costs, administrative costs, legal costs, tax costs etc. But there is no standard procedure for estimating those costs, you could do the costing in different ways, and consequently there are no standard social statistics on that subject to my knowledge. 

The "cost of replacing a worker in total" can be estimated in terms of the income he would be expected to earn over a certain interval of time, or over a lifetime, and the cost of hiring him for that period (not the same thing). You can also add a Keynesian "multiplier" effect since if a worker disappears, then this means a loss of expenditure for other people. This is just the direct and indirect financial costs. You could also consider other indirect costs, such as the cost of social security provisions, health provisions or the cost of increased criminality. In all this costing, it is important however to remember whose cost it is, and whose account you are talking about, since you usually have several transactors in the system, i.e. several transacting parties. Insurance specialists generally can help you out with lifetime earnings projections. In the case of Canada, the Supreme Court ruled on the calculation of foregone lifetime earnings related to the compensation of severely injured accident victims. http://links.jstor.org/sici?sici=0317-0861(197921)5%3A2%3C155%3ATCOFLE%3E2.0.CO%3B2-7

As regards the costs of raising children, many countries now have budgetary advisory services who estimate the average costs of raising a child. Thus for example the Dutch National Institute for Budget Information I mention in the Paris Hilton article estimates that raising a Dutch child up to 18 years would set you back 109,000 euro on average (that is 6,055 euro a year). In the USA, the Department of Agriculture determines the average cost of raising a child from birth until the age of 17. This cost is estimated every year based on averages, inflation rates, and common trends throughout the country.  According to the 2005 US report, the average cost of raising a child to the age of 17 would be approximately $500,000, or about $30,000 a year. In Britain, the annual 'Cost of a Child' survey shows parents could in 2007 spend an average 186,032 pounds on raising a child from birth to the age of 21, which is equivalent to 8,859 pounds a year, 738 a month or 24.30 pounds a day.

As regards incidental expenses which a worker pays out of his wage with respect to his or her employment, I mentioned a British survey already. But it again involves a difficult question of costing, because in order to reproduce the labour force you need additionally a whole additional physical and social infrastructure to a large degree paid for by the state. This is what the social democrats are always talking about. The unpaid labour-time involved can be estimated from "time use surveys" which are available for a variety of OECD countries. For Japan or New Zealand, for example, you can get market rate estimates for household labour.

As I have argued before, contrary to the Marxists but with Marx, there is no scientific proof possible for the truth of any economic concept of value as such, and all price accounting involves commitment to a value theory. The only proofs available consist of the applications of the economic value theory in limited, defined contexts. An accounting norm is a social convention, which is normally legally enforced or at least subject to legal scutiny. A similar point is made by ecologists who complain that some costs cannot be priced, or that some costs aren't priced that should be priced. It all depends on your accounting point of view, and what you want to measure, and why. A Marxists would of course reject class-neutral valuations, i.e. no class-neutral accounting is possible, unless you are willing to argue that everybody has the same interests. 

As regards the social wage, you can compute levies paid, and monetary benefits paid out, but it is difficult to estimate intangible costs and benefits. As an annex to the UNSNA, standard public accounts are computed for social expenditure of the state. In the USA, Professor Shaikh showed that the workers get as much money from the state as they pay in, so there is no net payment by the state to the workers. In Dutch research, it was concluded that the well-off get more money from the state than the poor do. The bourgeois state generally does not have "transparent" accounts showing exactly who gets what and how much from whom, the true financial costs and benefits are hidden, in the same way as with big multinational corporations. There cannot be full accountability, because the information base simply does not exist. In New Zealand, considerable progress was made with government capital accounts (assets and liabilities), but the concepts used again hide the true state of affairs to some extent in terms of who gets what and how much from whom. 

Bourgeois society, characterised by universal competition among people with different interests, is unable to reveal and acknowledge its own true nature, except partially in things like novels and movies etc. To understand it in its totality is a great scientific undertaking, assuming a lot of experience. Most people do not want to do the hard work to get there, they'd rather talk theory. Talk is cheap, getting the data is hard. Very, very hard sometimes. Generally I think it takes the co-operation of a whole party to understand it.

Anyway, the way I am going blind I am better off starting to talk about benefits rather than costs, I'll leave it there.


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