Manufacturing workers produce $114,100 each per year and keep $385 a week

Manufacturing workers produce $114,100 each per year -
and keep $385 a week
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By Gerald Maher
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from the New Unionist, November 1994, page 2

Have you ever noticed newspaper articles claiming that workers must spend increasing portions of each year working to pay taxes before they work for their own needs? One tax-reform outfit, for example, claims that "tax freedom day" for the average American worker did not arrive until May 8 this year.

The truth of the matter is that taxes, directly or indirectly, are paid out of surplus value-that share of value contained in the products and services that workers create with their labor which they never see or enjoy.

Whatever the earnings of this or that worker-whether salaried or hourly wage-the value of the workers' product and their earnings are two vastly different things. In fact, each worker must produce more value than he/she receives in compensation or it would be impossible for the employer to make a profit.

This is not about the employer's "right" to make a profit or to determine how much is a "fair" profit, but to illustrate that workers comprise the vast majority of the consumer market in a world economy that is consumer driven.

Studies indicate that in a typical eight-hour day the value of a worker's product in the first one-and-a-half to two hours will equal his or her day's wages. The other six to six-and-a-half hours of product value remains with the employer, from which profits are extracted, plus the "costs of doing business"-and taxes.

The following figures for 1991, the most recent available, are taken from the Census of Manufactures issued by the U.S. Census Bureau:

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PAYCHECK STUB

Manufacturing Value Produced Per Worker Per Week (1991) ... $2,268

Weekly Take-Home Pay Per Worker in Manufacturing ... $385

Total Deductions Per Worker Per Week (includes money for company's retained profits, stockholder dividends, interest payments, rents, insurance premiums, executive salaries, legal fees, sales, advertising, all taxes) ... $ 1,883

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BOTTOM LINE

Net Assets of 400 Richest Americans ... $300,000,000,000

Net Assets of 150,000,000 Poorest Americans ... 0

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U.S. workers in 20 manufacturing industries produced, on average, $114,100 per worker per year, atarateof $56.70 per hour. In a 40-hour week, therefore, each worker added $2,268 to the value of the product.

Yet, the average gross wage for the same set of workers came to $460 for a 40-hour week. Estimating deductions for a married man with two children leaves a "take home"of $385-and that is for workers in better-paying manufacturing jobs. The total tax burden of $75 is a small fraction of the total $1,883 deducted from the worker's product each week.

Of course, there are classifications of work where the value of production is not the same in relation to wages as this example. But, whether we are considering youngsters flipping hamburgers for minimum wage at the local drive-in, or an auto worker on a highly automated production line, the net effect is that worker-consumers cannot buy back the products of their own labor.

The result is ever-recurring recessions. Having begun iny working career in 1933,1 can testify to witnessing the depths of the Great Depression of the 1930s, and the interminable repetition of a nation pulling its butt out of one recession while sliding it into the next one about every five years since the end of World War II.

Recessions continue to punctuate our lives as we are again and again faced with an absurd catastrophe-an epidemic of overproduction and underconsumption, resulting in millions of workers being deprived of their livelihoods because they produced too much. Because they are underpaid for the values they produce, they are unable to buy back the value of their production. The last recession, which saw its beginning in the spring of 1990, was the ninth since World War II.

Forbes magazine has, for the past 10 years, published an annual issue rating the weathhold-ing propensities of America's richest individuals by listing the estimated net assets of each. In 1982, their total holdings were estimated to be $92 billion. In the 1994 issue, the total was over $300 billion.

Meanwhile, the Federal Reserve estimates that 60% of the population own zero or negative net asset value -- they owe more than they own.

As long as we endure this pyramid structure of wealth distribution, in which the rich get richer and wealth continues to gravitate to the tiny minority at the top, the number of the propertyless and deprived majority will continue to expand toward the base.

Politicians, whether Democrat or Republican, will continue to provide empty promises and band-aid solutions that can only continue this shameless wealth and needless poverty. Only an economy that is owned and democratically managed by the workers who produce all the wealth can deliver lasting prosperity and economic security for all.