“Being Treated like slaves”: Why migrant exploitation exists

Recently Unite Union discovered a case of migrant exploitation where the workers talked about being “treated like slaves”.

In a capitalist society labour is meant to be “free” – unlike the forced labour associted with slavery. Workers are not meant to be the property of an individual owner. But it is also meant to be free in the sense that the worker is not bound to the land like feudal conditions. Then the serfs had no right to leave the land but the owner had no right to evict them either. Creating a class of “free labour” under capitalism involved the forced eviction of peasants from the land.

So, under capitalism, workers are meant to be free from any attachment to the means of production which is owned by the capitalist class. Capitalism appears to be full of freedoms. Landownsers are free to rent their land to someone else or not. Big businesses can sell anything theo own – be it a factory or an iphone – when or if they like.

Workers are “free” to sell their labour power to an owner at a certain price. But I may not find a buyer for my labour if my price is too high, Slaves or serfs did not have this problem. They could not be “laid off” when business was bad. A slave could be whipped, beaten, killed for poor performance but not sacked. The serf always had a piece of land to work.

Capitalism is a system of markets – for commodities, money, shares and bonds – but the most important market of all under capitalism is actually the “labour market”. In this market a worker must offer their labour power for sale at the prevailing price or “wage”.

For this market to function properly it needs a certain surplus of supply relative to demand, otherwise the price would be bid so high profits would be undermined and the system which relies on making profits as its driving force would cease to function. In his briliiant analysis of capitalism the socialist theorist Karl Marx called this relative surplus labour the “reserve army of labour”.

Current immigration poloicies in advanced capitalist countries like New Zealand is aimed at creating and preserving a “reserve army of labour” to hold down wages – the price of labour power.  

Since class society arose a few thousand years ago, the class of non-workers monoplolised ownership of the means of production. Serfs and slaves worked for these owners and a portion of their work each day went to their own reproduction and a portion went to the owners. It appeared that the slave was paid nothing but their were costs associated with their production and reproduction – food and shelter at a minimum – that needed to be met. What must be paid to the slave is “necessary labour” and the wealth produced beyond that is the “surplus labour”. The owner wants to minimise the former and maximise the latter.

Under “free” wage labour system it appears a worker is paid for all their labour. If I work a 20-hour week I get 20 hours pay. If I work a 40-hour week I get 40 hours pay. If I want more money I work more hours. If I want more leisure I work fewer hours. That seems fair. It appears I am working only for myself.

It appears I am selling all of my “labour” and am rewarded fully for it. Actaually what I am selling is my ability to work – my “labour power”. The distinction is important. What I am paid is less than the value I produce – just like under serfdom or slavery. Value is simply a quantity of labour measured by a unit of time and embodied in a commodity or service.

The wage I receive, however, must be less than the value I produce or I would not be employed. During part or my workday I reproduce the value of the money wage paid to me – the necessary labour. After this the labour performed is creating surplus labour which takes the form of surplus value under capitalism and is realised when the commodity or service is sold for money. The “necessary labour” must include the minimum necessary for eating and clothing myself and the next generation of worker.

There is also as Marx explained a “historical and moral” component that can get built up over time – especially if the reserve army of labour declines for a more prolonged period. Worker can use their increased bargaining power in a period of so-called labour shortage to expland that element of their wages. Trade Unions can also be used to combine and reduce competition between workers when t hey bargain with the boss. But any gains made will always remain at risk of losing it again in a future capitalist crisis. That is precisiely what happened in New Zealand in the late 1980s and early 1990s after real wages peaked in the early 1980s and then were driven down by 25% by the mid-1990s according to official statitics.

It was no coincidence that to achieve that goal the capitalist state and their government radically attacked workers legal rights to join unions and cut unemployment and other benefits drastically to increase pressure on workers when they were unemployed. A deep and prolonged recession with a dramatically enlarged reserve army of labour established that was at least in part induced to help crush workers resistance.

The great advantage of the system of “free wage labour” for capitalism is that the capitalist only needs to pay for the labour he uses if it creates surplus value – profit – when he uses it and can discard the labour when it is no longer productive of surplus value as happens periodically under capitalism through the so-called business cycle. In part, the purpose of the business cycle for capitalism is to recreate the industrial reserve army and restore or improve the profitability of employing labour. Labour power is part of “circulating capital” like raw materials used in production rather than “fixed capital” like buildings and machines. Wherever possible, capitalists prefer to convert fixed capital to circulating capital. This reduced the risks associated with a total loss of value tied up in fixed capital as a result of business reduction or complete failure. Sacing a worker or cancelling an order for raw materials is easier than selling a building in distressed times.

In advanced capitalist countries the strong post-World War Two economic upturn reduced this reserve army considerably. As a consequence, nearly every country has turned to the “world market” for labour power to help recreate that surplus. They deliberately create situations where there is a pool of accessable labour that can be exploited or even better can be super-exploited.

Super-exploited workers are paid even less than the usual value of labour power in the particular country. This is achieved by having a pool of workers with fewer rights and less ability to assert them. In the US this is done by having so-called “illegals” who cross the border from Mexico in their millions. They also have hundreds of thousands of temporary work visas for agriculture and other industries issued each year. Right wing campaigns in the US like US Presiddent Trump is leading against the so-called “illegals” is not designed to keep them out but to keep them down when they are inside the US.

In New Zealand we recreate the reserve army of labour with weak access to full labour market rights by allowing a massive growth in “temporary” labour associated with the search for permanent residence, student visas, seasonal workers from the Pacific, and working holiday visas. Last year a quarter of a million temporary visas were issued of all types. At any one time there are over 150,000 temporary workers in New Zealand at any one time. Many of these workers are tied to particular bosses through their visa conditions. This makes it virtually impossible for them to stand up for themselves in the same way as workers with full residency rights.

Labour markets are meant to work like other markets. As shortages appear, first for skilled workers, the employer is forced to offer higher wages. This helps restore margins for skill that are needed to encourage young workers to undergo apprentiships and other training that may be required to obtain those skills. If the economic boom continues and shortages appear for less skilled labour, then again the price of that labour needs to rise to bring people into the labour market from out of the existing reserve army of labour that exists.

This begins with jobs for the official unemployed who are “actively” seeking work (124,000 people or 4,5% of the labour force) plus more hours for those in the labour force already working who want more hours (another 117,000 people). In addition, there is another 80,000 people who want work but aren’t actively seeking, and 20,000 wo are actively seeking but not immediately available for whatever reason). The official “underutilisation” rate is actually around 12% of the workforce – New Zealand’s actual reserve army of unemployed.

Employers are forced to offer work to people less-skilled, less experienced, former prisoners and so on that they may not want to. That is the labour market at work. It is clear that this process has been blocked by the surge in temporary work visas. Companies are offering no more than the minimum wage for often very skilled work like that associated with running dairy farms in Otago-Southland.

In my view everyone who is currently in NZ on a temporary visa should be offered permanent residence if they want it. That is the only way to end the superexplotation that is daily being exposed.

But no one else should be able to bring in a worker from overseas as a bonded worker to a particular employer. All workers should be able to change their employer if they want to. New Zealand bosses need to treat workers better if they want to keep them.

Employers wanting to import labour should also have an obligation to take on a young unemployed person on an apprenticeship programme or something similar. If they claim they can’t find a worker like that to employ at their current wages on offer, then wages need to adjust upwards until they find someone. That’s what a genuine free market would do. That doesn’t happen nopw because the market is rigged in the employers favour.

Working people must fight for a country where full employment and more generous welfare systems with benefitsm for the unemployed are important protections for workers. But if we achieve therse goals it will only be a temporary stage under capitalism.  So long as we have a system based on private ownership of the means of production, and a competitive search for profit, the class of owners will fight back and destroy the economy if needs be restore their power and priviledges. We must be prepared to go beyond capitalism towards a deomcrativcally planned socialist economy for New Zealand and the world.