Contrary to popular ‘Marxist’ belief, the value of labor is not indeterminate. A simple equation dividing the total value produced in a given period by the total number of working hours reveals the value of labor.

Unlike in Marx’s day when the total value produced in the world economy was unknown, today we can use the global gdp as a rough estimate of the sum. Likewise, because the total global population is statistically counted, we can extrapolate the total hours worked.

In 2011, the global GDP was $69,110,000,000,000. The total population was estimated mid-year to be 7,021,836,029. Let us assume that half of people regularly work. In this case, each worker produces about $20,000 per year. This would be the value of labor. Furthermore, if we assume each worker works 40 hours a week for 50 weeks a year, the value of labor is $10 an hour.

If the value of labor is $20,000/year or $10/hour, then a majority of US citizens receive incomes that include the full value of labor plus surplus value from the exploitation of other’s labor. While nearly 40% USians’ over the age of 15 have incomes that are formally below this figure, this portion likely receives welfare and other benefits which make up for their relatively low paychecks. The poorest 5% in the US are still better off than two-thirds of the world’s population. Due to the extreme level of parasitism of the US population at large, even a hypothetical sizable minority of minimally-exploited US workers would be politically and culturally bought off by capital.

As it stands, estimates of the global median income float between $1,250 and $1,700/year, $18,750- $18,300/year less than the estimated value of labor.

– Nikolai Brown

Join the conversation! 34 Comments

  1. This is silly. You have calculated the average value of labor. Some workers engaged with a higher concentration of the organic composition of capital, ie, high tech factories, produce far more value with far less workers, ie, the hourly value produced by these workers is considerably above average.

    • Which average?u.s r world

    • 1hr of value is equivalent to 1hr of value.if a producer produces 1000 use values an hr or only 10 is immaterial.each adds 1hr of value tho in former case it is spread over more use values.technology does not add value.only labor produces value.read results of the immediate process of production by marx

  2. Using GDP to formulate your argument only makes sense if production and cost-of-living were equally distributed worldwide, which is definitely not the case. And like carldavidson says above, the value of labor to stitch together a t-shirt is significantly less than, say, designing a new microchip. The ‘total value of labor’ must include the cost of specialization for that labor.

    Furthermore, your point “Due to the extreme level of parasitism of the US population at large, even a hypothetical sizable minority of minimally-exploited US workers would be politically and culturally bought off by capital” is complete nonsense. Why? 1) every worker that does not work for him or herself (ie, does not own the means of production) is being exploited. You’re either exploited or you’re not. There is no such thing as a ‘minimally-exploited worker.’ 2) virtually the entirety of culture and politics have been bought off by capital the world over. What constitutes culture? Material goods is a big part, and material production and consumption is dictated by advertising either creating or capitalizing on cultural trends. What is politics, except an arena for the rich to exert power over the poor (both in power and in material wealth)?

    Try to make a point with your arguments that does not make you, and the whole idea of anti-imperialism in general, look like a fool.

  3. Bear in mind that not all of production can be distributed as personal income: much of it goes to the means of production, infrastructure, public works, waste, and other ends. If even half of production (probably a considerable overestimate) is available for distribution as personal income, then the value of labor, by the above calculation, is only $5 per hour. Even the minimum “wage” in the imperialist countries is greater than that, so every last First World “worker” is a parasite.

    The comment above by Carl Davidson reflects ignorance of rudimentary Marxism. Automation actually drives the value of labor-power down. And the value of labor-power is based on average socially necessary labor, so it isn’t affected by local differences in the organic composition of capital. We communists have explained that to Davidson a thousand times. I’m not going to waste my time him anymore.

    • Indeed. The argument is over the uneven context and meaning of ‘socially necessary’

      • Ho chi minh certainly did make that statement.when ho wrote it there was still a proletariat within imperialist cores.albeit decreasing numerically.to state that it applies today is nonsense.reproletarianisation will have to be obtained to large degree before it once again is applicable

      • Strange. I live in a blue collar area where 90% are proletarians. Income is below average, and the church on my corner is packed on the first Saturday of every month with folks coming out of the hill and hollows to visit the food pantry because they can’t make ends meet on meager wages or social security. There was a time when they made decent wages producing surplus value for US Steel, but that’s long gone. And they’re all ‘white’ too. You can call them whatever the hell you like, but they’re the working class in my book. They don’t employ anyone to work for them, and they are not in business for themselves. One of us is deluded here, but what I see every day is clear as can be.

      • Fine. We have clarity on our differences.

      • ‘Selling services has nothing to do with value production.’

        Really? Try running your factory with a computer network that has crashed. You won’t get any surplus value from it until skilled teams like my old one get you up and running again. Ponder this question: Where does the ‘point of production’ begin and end? Where does the ‘point of consumption’ begin? When a widget comes off the line? When it’s put in a box? When it’s stored in the shipping dept? When a trucker delivers it to a retail store? When a stock clerk puts it on the shelf? Or when the check-out clerk rings up the sale and the consumer takes it out the door?

      • The wrong assumption behind both your arguments is that the price of labor power is somehow objective yet incidental and not subject to deviations produced through historical processes of class struggle. That is to say, the price of labor power is overvalued in the First World as part of the structure of value transference.

        Carl, how about you account for your shilling for the Democrats before begin playing Marxist professor? http://raimd.wordpress.com/2009/11/25/review-arun-gupta-asks-what-anti-war-movement/

      • The difference between compound and simple labor does not affect calculating socially average product of labor.also 80% of production takes place in south.someone who designs microchip is a service provider.socially necessary means 1 of 2things-labor performed with average intensity and average productivity or obtaining xchange on market

      • I had a small computer firm. I had new workers with zero certifications, and paid them $20 per hour. I had a few workers who were very skilled and certified, and paid them $40 per hour. I billed the client according to the tasks completed, and the costs varied accordingly, which means I made a much greater profit per hour from the higher skilled worker than the lower skilled. So relatively speaking, in terms of what he got back in payment as a percentage of what he produced as value, the higher skilled and better paid worker was both more productive and more exploited than the lower skilled, even though the two types of workers put in an equal amount of hours. Why you would want to ‘average’ the two doesn’t make much sense. I never did it. I tried to educated the lower skilled workers to the higher tasks, and sell more of the high skilled services proportionally.

      • Selling services has nothing to do with value production.

      • Average socially necessary labor time is not a choice..instead it refers to a component of the law of value..

      • I agree re class struggle and wages.and of course high wages are necessary for accumulation.carl theres difference between production and realisation of value

      • I agree on historical context. That’s where ‘socially necessary’ comes in. I also understand production and realization of value. I once worked for a truck parts factory as a salesman. I went out of the road and brought in orders and saw to it that they were fulfilled properly, ie, I was paid to ‘realize’ the value of those working on the production line and in the shipping dept. The better I was at it, in relation to rival firms, or in finding new products to add to our ‘line,’ the more workers the boss employed and the more value created.

        As for electoral tactics in today’s conditions, and larger question of strategy, I’ll be glad to develop an argument, but it won’t be ‘shilling’ for anyone, especially the Dems, where my aim, for the party as a whole, is to see it go the way of the Whigs. There are a range of tactics to help that process along, but it’s a bit off-topic here. If you like, take my recent strategy piece, and start a new thread on it.

      • You obviously don’t understand the ‘historical context’ of the over-valuation of the price of labor power in the US, otherwise you would be talking about the history of genocide and terroristic imperialist wars carried out by the United Snakes, not campaigning for Barry Obomber.

        The job you described – sales – in your umpteenth anecdote perfectly describes the sort of superfluous fetter on the productive forces imposed under capitalist-imperialism, the sort of job which is rightly assumed to be sustained by means of ‘deducting surplus-value from profits.’ It is precisely these sort of parasitic jobs which will be abolished under socialism. And because I am talking to you, I should point out once again that the particular structural features of the capitalist-imperialist system, principally wage gradation and parasitic (‘bullshit’) jobs, are not arranged randomly, but were created through a history of settler-imperialism, colonialism, and capitalist-imperialism.

        No one cares about your most recent attempt to paint reformist Kautskyism as radicalism. And yes, you are a shill – an apologist rather – for Obama and Democrats.

      • The man’s name is Barack Obama. Criticize his stands and politics as you like. I do. But it’s mainly the chauvinists of rightwing populism that insist on calling him ‘Barry’ these days. And I’ve written plenty on the genocide and white supremacy in our history, including acknowledging the ‘white’ and ‘great nation’ privileges that accrue to the oppressor nation vis-a-vis the oppressed nations and peoples. (One thing the ‘whites’ were wont to do was call people of color by their proper names). I’m partial to Ho Chi Minh’s summation that despite privilege, imperialism is like a two-headed leech–one sucking the blood from the colony, the other from the working people of the metropole That is the basis for their unity vs Empire. If you want. I’ve put together an eight-part slide show on US history and the development and changes in its Constitution, a class I was asked to prepare by a group of workers who were in arguments with Tea Party rightwingers over whether national health care was ‘Constitutional’ or not. My exposition, of course, covered far more than that.

      • We’ve gone over this before: ‘Barry’ signifies the degree to which the US president serves the power of US-led capitalist-imperialism. Pardon me for not sharing your reverence and respect for a future war criminal.

        The proposition which you attribute to Ho is ridiculous and wrong. Obscuring the qualitative difference between the relationships of First and Third World workers to capital epitomizes the chauvinistic/slavish outlook of First Worldism. Of course, none of this is sinking in for you. You have a religious worldview, and the embourgeoisifed First World ‘working’ class is your golden calf.

        So please, take your tired First Worldist reformism and Kautskyist misdirection back to whatever Democrat-supportive campaign you are currently on, and quit making the same defeated arguments over and over again here.

      • Why the hell does this Davidson person get to publish here the same old First Worldist rubbish that we have refuted a thousand times if once? Has the international communist movement nothing better to do than entertain Obomber-loving revisionists who think that a half-ass network technician in the U$ is “exploited” for making “only” $40 per hour? (Just exactly how much should these people be paid, in Davidson’s view? Billions? Trillions? Quadrillions?)

        The comrades who run this site should do self-criticism for wasting the international proletariat’s time on Davidson’s First Worldist blather.

        As to the other comments below (not those of Davidson, which I am ignoring):

        Skilled labor is more valuable than unskilled. For one thing, skilled labor embodies the value that was necessary for its production, notably in the form of education and training. Also, many tasks—such as producing microchips—are not even possible without skilled labor. For these reasons and others, skilled labor tends to demand higher wages than unskilled under capitalism. Even during the earliest phase of socialism, higher payment for skilled labor is appropriate as a matter of bourgeois right, because it simply wouldn’t do for large numbers of people to quit or avoid the skilled professions (which tend to exhibit a great shortage in a fledgling socialist state) just because, in their narrow views informed by bourgeois ideology, they could make the same wages by sweeping floors.

        It is quite true that an hour of socially necessary labor time produces the same value whether it be spent on the design of microchips (which, by the way, is not a service) or on transplanting rice seedlings. That does not, however, mean that skilled labor and unskilled labor have the same value. As I discussed above, skilled labor has a greater value.

        Why do wages vary even though socially necessary labor time of whatsoever kind produces the same value? Because workers are paid not for their labor time but for their labor-power, a commodity whose value varies under capitalism according to market conditions. Thanks to the injustice and obscene insanity of capitalism, a completely unproductive worker (such as a salesperson, a banker, or a police officer) may be paid more than a highly productive worker. Indeed, that is the norm. Worse still, the value of labor-power differs enormously between North and South, thanks to imperialist-instituted geographic monopolies on the mobility of workers. As a result, wages in the First World almost invariably exceed value produced, which means that workers in the First World generally are not exploited but in fact benefit from imperialist exploitation.

  4. We’ve been over the cost of living many times. Years ago I wrote an article entitled “High Cost of Living in the Third World” on this very subject. The cost of living in the Third World is similar to, and frequently higher than, the cost of living in the First World. In any event, minor differences in cost of living do not come close to offsetting the massive differences in wages between the Third World and the First World.

    It is true that there are no minimally exploited workers in the U$. That’s because there are no exploited people in the U$ at all.

  5. Automation has two sides to it. It ‘drives down’ some labor by eliminating it entirely. But the remaining highly skilled high tech workers managing the robotic equipment have their wages increased. They efforts are more productive of value, and thus they are even more exploited than the lower-skilled labor they supplant. Yes, one can be both ‘more exploited’, ie, creating a greater portion of surplus value even at a higher wage, and less ‘oppressed’ at the same time. As Marx said, ‘be his payment high or low,’ the wage worker is still exploited. Exploitation and oppression, while they overlap, are not the same thing. All that is the ABC.

  6. Wrong. Study some Marx. Stop wasting our time with your nonsense. Plainly you don’t know even the rudiments of the labor theory of value.

  7. In regards to the so-called high cost of living which accompanies First Worlders’ high real wages: this should be understood as one means through which imperialism concentrates and saturates stolen value (i.e., surplus) within its borders. First Worlders are essentially paid over the value of labor, charged a bit more, and sold a lot more in order to the perpetuate a cycle in which value is realized (though not necessary produced) in the First World at the expense of the Third.

    In response to Carl directly. First, stop trolling. There are plenty of First Worldists movements for your to contribute to. Your future comments, unless they are substantively different in topic and argumentation will be severely moderated.

    Second, your comments ignore the fact that different rates of compositions of capital are reproduced as part of the function of imperialism. What you understand as value added is really value captured. This has already been dealt with here: http://anti-imperialism.com/2012/11/06/review-part-3-of-3-john-smith-the-gdp-illusion-value-added-versus-value-capture/ .

    Third, exactly what production in the US are you talking about which produces so much value? The US barely produces anything except that which it has a monopoly on and taste-less, nutrition-less frankenfood which it hoists on the planet. Otherwise, the US economy is highly tertiary and financialized, i.e., structured around the realization of value and not its production. Seriously, have you been asleep for the last 40 or so years?

    Fourth, you comments basically amount to apologia for a mythical proletariat, one which quite frankly isn’t buying your bullshit First Worldist psuedo-Marxism. Thus, since you are obviously not doing much else you have plenty of time to troll around our site as a tool for the labor aristocracy. Congratulations.

    Fifth, your last string of comments amounted to a tactic admission that you could give two shits about oppressed people. The only reason you are allowed to post such trash on our comments is because it is fun and highly demonstrative to respond. Otherwise, you’re whole ranty reformism aged First Worldist spiel is pretty pathetic.

    Serve the People, Good points and thanks for chiming in. You are especially correct when you say Davidson has no fucking clue what he’s talking about.

    To Dunbar. These different costs and jobs don’t just drop from the sky. Prices do not reflect value. Rather, they serve to move value within the world-economy. That is to say the price of labor power (i.e., compensation) does not necessarily correlate in any manner with the production of value (other than value has to be produced somewhere). The whole bit about someone who designs a microchip being more exploited ignores the fact that access to education and such jobs are mediated through structural oppression. Thus, your comments come off as borderline racist and classist. I occasionally talk to people who earn six figure incomes in key positions at large corporations. Do you know how they justify their salaries? They mention how much additional revenue (typically in the millions or billions of dollars) their efforts brought their companies. Do you buy that shit as an accurate representation of how much they were exploited? If so, please go out and organize those with six-figure incomes for revolution: put up or shut up.

    The rest of your rant is non-nonsensical and doesn’t approach anything close to Marxism. Some of your points were already corrected in other forums so I won’t waste time bringing it up here again. Approach these questions again after you’ve engaged with the wider array of traditional Marxist and Third Worldist material.

  8. I think there is a desperate need to start a new labor movement for America:

    White-Collar Professionals of the World Unite!

    All you have to lose are your 401Ks, iPhones, and luxury condos.


  9. […] wage for Amerikan workers (39,500 USD) is nearly twice abstract labor’s exchange-value (around $20,000 per year for full-time work) and and over 31 times greater than the global median for the price of labor-power (1,250 USD), […]

  10. […] more causal mechanism through which the concentration of capital is achieved has been outlined in a previous article: “The investments required by large (and especially multinational) companies go beyond the […]

  11. […] years, in particular with the growth of casino gaming, most Onkwehón:we still earn less than the global abstract value of labour (roughly $20,000 a […]

  12. […]   3. Nikolai Brown, Calculating the Value of Labor. http://anti-imperialism.com/2013/02/19/calculating-the-value-of-labor/   4. Richard D. Vogel, Harder Times: Undocumented Workers and the U.S. Informal […]

  13. […] and these strata may be progressive or even revolutionary. Others have put forward the model of the abstract value of labor (the average value that labor produces globally) as a mechanism to gauge where the progressive […]

  14. As I mentioned here a year ago, Comrade Brown’s estimate is far too generous. Comrade Brown’s calculations show that the value of average abstract socially necessary labor time is less than $10 per hour (or $20k per year). It is actually a lot less, precisely because much of the value produced in the world is allocated to purposes other than personal income: the means of production (which must be renewed and often expanded), infrastructure, public works, services of various sorts (such as free public schools and health care), waste (an especially big category under capitalism), and so on.

    Some years ago, I published at a Maoist-Third Worldist Web site my estimate of the value of average abstract socially necessary labor: approximately $2 or $3 per hour. That corresponds to a full-time wage (taking “full time” to mean 40 hours per week, 50 weeks per year—an unrealistically low figure for much of the Third World) of about $5000 per year. Even at the minimum wage, a “worker” in the U$ gets three times that; in Canada and many other imperialist countries, at least four times as much. Theoretically a Stakhanovite in an imperialist country might be paid below value, but in practice there just isn’t any exploitation in the imperialist countries: with perhaps a handful of exceptions, everyone in the imperialist bloc is grossly overpaid.

    Note as well that relatively little productive work takes place in the imperialist bloc—especially in the U$, where most “workers” are in the unproductive sector. I pointed out a few years ago that there are more than two food-service “workers” for every “worker” who was in or even near the productive sector. If, like most Amerikkkan employees, you work in retail or bean-counting or pencil-pushing or information technology or health care or government or pig work or advertising or management or entertainment or some similar service, you are in the unproductive sector and do not produce any value; however important your work may be, you are parasitic upon production, irrespective of your “wages”.

  15. […] ‘Aristocracy of Labor” [4] Nikolai Brown, “Calculating the Value of Labor”, http://anti-imperialism.com/2013/02/19/calculating-the-value-of-labor/ [5] J. Sakai, “Settlers: the Mythology of the White Proletariat”, […]


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Imperialism, Marxism, Political Economy, Theory


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