Disposable workers: today's reserve army of labor

Monthly Review, April, 2004 by Fred Magdoff, Harry Magdoff

Members of the reserve army--a mass of people living in insecurity or fearful of future job prospects--can be thought of as belonging to one of the following broad categories:

a. the unemployed (including those officially recognized as unemployed because they have recently looked for work as well as those that have stopped looking because they can't find jobs);

b. part-time workers that want to work full-time;

c. people making money independently (self-employed) doing various odd jobs or getting occasional work while desiring a full-time job;

d. workers in jobs that are likely to be lost soon (due to economic downturn, increased mechanization, or their jobs moving to countries where workers earn lower wages). Although not unemployed, these workers usually know that they are in a precarious situation and behave accordingly. Agricultural labor displaced by increased productivity in the countries of capitalism's center no longer provides large numbers of reserve army members. However, people displaced from agriculture in the periphery are a huge potential source of reserve labor for their own countries and, as immigrants, for the center;

e. those not counted among the economically active population but available for employment under changed circumstances (such as prisoners and the disabled).

Through much of U.S. history, employers had the right to terminate employment at will. As far as capital is concerned, this is the most desirable situation because it provides the highest level of flexibility to control labor and labor costs. The wording of an 1884 Tennessee Supreme Court decision is an indication of the extent of capital's rights during this period:

  Men must be left, without interference to buy and sell where they
  please, and to discharge or retain employees at-will for good cause or
  for no cause, or even for bad cause without thereby being guilty of an
  unlawful act per se. (Payne v. Western & Atlantic Railroad, Tennessee
  1884)

The doctrine of firing workers at will applied to most workers, except where union contracts stipulated otherwise. However, legislation at the state level and legal findings in state courts gradually modified this right of capital for many states. This made it more expensive to fire workers with implied contractual rights to continued employment--when not done for reasons of financial need--often resulting in lengthy legal battles and/or severance pay. Capital has responded with techniques to overcome this handicap such as increased use of temporary, part-time, and contract labor, the privatization of government functions, and outsourcing portions of industrial and service operations to other locations at home and abroad. All of these contingent or nonstandard work arrangements have the advantage for capital that they further weaken its already weak obligations to workers.

The Supply of Workers for the Reserve Army

The reserve army has not remained the same over the years. The details of its composition and sources of supply have varied through history, according to local conditions and the economic relations between the countries of capitalism's center and periphery. The supply of people for the reserve army is generally provided through the normal workings of capitalist development--job growth is rarely great enough to keep pace with both population growth and the employment needed for those workers displaced by increased labor productivity. Sometimes land is taken for development--for dams, roads, and factories--forcing displaced farmers to seek employment in cities. Productivity growth, the mantra of many academic economists, is supposedly good for both capital and labor. It is maintained that as productivity increases, higher wages for workers are possible while at the same time higher profits can go to owners of capital. However, the reality of increasing labor productivity under capitalism usually has been quite different.