Submission from a member of Cleveland DSA
An “hourly rate of pay” is such a universal practice that it might even seem strange to question it. Even a salaried worker’s pay is usually derived from an hourly rate, which is theoretically superfluous. It cannot have always been this way; it’s only within the last few years or so that reliable timekeeping devices became truly widespread. So where did the arbitrary standard of hourly pay originate?
The answer lies in the advent of the modern factory system. If you were to time travel to any era before the rise of mass industry (which was, at risk of offending any sticklers for historical precision, roughly around the 17th century), asking anyone what they were paid for each hour they worked would likely yield a rather perplexed response. Let’s say you were to go to a 15th century blacksmith and say “I want to pay you to make horseshoes for me for one hour. What would you charge me?” They would likely respond, “What are you talking about? Just buy the horseshoes! They’re 15 shillings a piece.” (I don’t know how much a horseshoe costs or what a shilling was worth)
Being the persistent time-traveler that you are, let’s say you pressed the issue and insisted on paying this blacksmith for an hour of their work. The metalworker might actually become indignant and snap back with “Just buy the damn horseshoes, you weirdo! Why do you need to know when I’m working on them? Why do you want to control my time? Who do you think you are, a king? And what do you think I am, your slave?”
Ye olde blacksmith is right, if you think about it. Being paid “by the piece” makes far more sense than setting an arbitrary timeframe that determines compensation for a generalized concept of “work” or “labor”. Wouldn’t it make more sense for a barista to be paid by how many drinks they make and sell, or for an assembly line worker to be paid by the number of parts they complete? It could actually allow for more accurate and fair compensation, in theory.
Therein lies the rub; or partially, at least. By paying per hour of work rather than pieces or parts delivered, business owners can avoid paying workers more when they produce more. Instead, they keep the extra value generated as profit. Karl Marx would have described this practice as one of the many ways that capitalists ensure a “higher rate of relative surplus value” for themselves, or, more generally, a higher rate of profit relative to their competitors.
By paying per hour of work rather than pieces or parts delivered, business owners can avoid paying workers more when they produce more.
So how did this blatantly exploitative method of compensation become the norm? One could argue that it was partially born out of practical necessity, although that logic disregards the power imbalance between capitalists and workers. “Paying per piece”, or paying a worker for what they produced, was the universal norm until factories expanded the scope and accelerated the rate of production. Before machines and assembly lines, complex manufacturing and fabrication was carried out by small workshops of “artisans” with years of training and practice specializing in a specific trade or handicraft. These workshops or guilds earned an income by selling their wares, with the younger apprentices paying a fee for training and access to the guild’s equipment.
This all changed when the factory system came into play. Suddenly, manufacturing, fabrication, and the processing of raw materials could be aided by machines which required little or no training to operate. The concept of an “unskilled” worker is a myth, of course; the workers who ran these machines were required to develop the skill to do so. But the fact that a new employee could be taught the basics of operating a metal press in a matter of minutes dramatically undercut the value of the years of training and practice that would have been required to perform the same task by hand. Consequently, it allowed for a massive increase in productivity.
In the factory system, the number of workers involved jumped from the handful of artisans in a workshop to dozens or even hundreds of workers on a factory floor. And with so many individual employees, a new problem arose: how was the factory owner supposed to keep track of what each of these workers were producing in order to compensate them according to the traditional “pay-per-part” standard? There were so many workers, each producing at different rates, that a whole team of accountants would be required to calculate their payment if it were based on the amount each of the factory workers produced.
“Pay an entire staff just to be able to pay another staff? But that would cut into profits!” griped the capitalists, “To hell with that! Let’s just pay them all the same wages by the day.” And so it was. Factory workers were paid a set amount per day, regardless of how productive they were. This led to a windfall of new authority that capitalists could wield over workers. “So how long is a full day?” a worker may ask. “Why, 16 hours, of course,” smiled the quick-thinking factory owner, wanting to maximize the amount of time his machines were operational. “And not a second less, or you won’t get paid.”
In a pre-union era, workers were in no position to argue or protest. The capitalists were quick to point out that employees were “free” to seek work in a different factory; nevermind that other factories were obliged to adopt the same exploitative, cost-cutting practice in order to stay competitive in the market. Moreover, the artisanal guild system of production was quickly driven out of business by the exploitative and highly profitable practices of the factories. Managerial overreach and abuse grew more and more commonplace, and the workers’ options shrank just as quickly. So they began to band together and form a resistance.
Workers’ rebellions had occurred sporadically throughout history; european miners fought back against tyrannical mine owners during the renaissance, disgruntled sailors have mutinied against abusive ship captains for millenia, etc. The organization of industrial era factory workers into early unions, however, is the origin of the modern workers’ movement as we understand it today. Their trials and tribulations are dramatic and heroic, and their efforts deserve study and admiration. But let’s keep our focus on the origin of hourly pay.
Along with generally abusive and corrupt managerial practices, some of the primary grievances of these early factory workers were unfair compensation and strict time requirements. Factory employees were routinely docked pay for “slacking” or not technically completing “a full day” of work, in spite of toiling in the factory for hours upon hours. On top of that, factory owners were known to slow down clocks, lie about compensation, withhold pay, and myriad other petty tyrannies.
So an obvious early target for these disgruntled factory workers was the clock. “Look,” they argued, “If I’m scheduled to work for 16 hours and I have to leave 15 minutes before the shift ends because I lost a half finger in the hydraulic lathe, you should still have to pay me for the time I worked.” The factory owners resisted but eventually caved to social, economic, and political pressure brought on by strikes, demonstrations, coordinated work stoppages, etc. So thanks to the diligence of these militant worker organizations, capitalists were forced to pay by the hour instead of the day, a dramatic improvement from the far-more-easily-abused day rate standard.
Workers today produce far more than they are actually compensated for, and the fact that they’re paid by the hour instead of the day gives them little comfort or protection.
But today, we haven’t progressed any further. Sure, unions have won many more material improvements for workers, all of which are achievements that are to be lauded. Yet “pay-by-production” versus “pay-by-hour” isn’t really part of the mainstream labor rights conversation outside of the handful of nerds who read books by David Graeber and the like. Workers today produce far more than they are actually compensated for, and the fact that they’re paid by the hour instead of the day gives them little comfort or protection.
If we truly want to shift how we think about work and compensation, if we truly want to chip away at the foundations of capitalism’s means of working class exploitation, this should be one of our prime targets. And needless to say, moving from hourly pay to a more ethical system of compensation based on production would not end the exploitation of labor, just as raising the minimum wage wouldn’t end it either. But reframing the argument in this manner forces capitalists to engage in debate on our terms and not the other way around. At the very least, it gives us a more honest and accurate understanding of the economic injustices wrought by our economic system.