Tricontinental: Institute for Social Research

It is not sufficient to know that workers are exploited, or to demand higher wages within a capitalist system: it is necessary to have a framework to understand more deeply the injustices that we see in places like Foxconn factories, where long workdays and unsafe working conditions are the norm.

This framework is provided by the concept of ‘rate of exploitation’—one of the most essential concepts in Marx’s theory. Its measurement allows us to show how much the worker contributes to the increase of value in the production process. It shows that even if the worker is paid more, by the special magic of mechanisation and of efficient management of the production process, the rate of exploitation increases.

Recently, Tricontinental brought out a report that used Marx’s rate of exploitation on the iPhone manufacturing process to show quantitatively the contradictory interests of the capitalists and of the workers. It enables workers to see how much of the share of the value produced is appropriated from them by the capitalists, and to therefore make the case for a different way to organise production and to end exploitation.

Here is a brief summary from the report:

If the iPhone were made in the United States, it would cost at least $30,000 per phone.
In order to purchase one iPhone for $30,000, a minimum wage worker in India would have to work for 15.5 years, each day. A minimum wage worker in South Africa would need to work for 14.5 years for one phone.
Each time an iPhone X is sold for $999, Apple receives $603.56 of surplus value in money form. In other words, every time an iPhone is purchased for $999, Apple keeps $605.56.
The rate of exploitation of the iPhone is 2458%. This is 25 times the rates of exploitation that are gleaned from Marx’s examples in Capital, published in 1867. Workers who make the iPhone in the 21st century, in other words, are 25 times more exploited than textile workers in England in the 19th century.
What does this number—2458%—tell us? It tells us that an infinitesimal part of the working day is devoted to the value needed by the workers as wages. The bulk of the day is spent by the worker producing goods that enhance the wealth of the capitalist. The higher the rate of exploitation, the greater the enhancement of the capital’s wealth by the worker’s labor.