It may surprise the million or so people in Britain who work for the minimum wage (set to go up by 19p to £6.50 per hour in October) that they are considered part of the world’s richest 10 per cent! Yes, according to the latest report form the World Bank anyone who has an income of more than $10 (about £5.95) a day belongs in the same bracket as Bill Gates, Carlos Slim, Warren Buffett, George Soros, and Ramon Abramovitch etc.

The World Bank and Development

Despite talk of how capitalism has lifted “millions” out of poverty in the ‘emerging’ states where the majority of the world’s people live, the standard of living of most wage workers in China, India, and so on lags far behind their counterparts in the ‘advanced’ capitalist heartlands. Like all officialese, the picture of the millions who have benefited from the profit-making ventures of rampant globalised capitalism is painted according to formulas provided by the ‘target setters’ themselves. Thus, we are told that the World Bank’s ‘Millennium Development Goal target’ — of cutting the 1990 poverty rate in half by 2015 — has already been reached. Instead of 1.91 billion people living on less than $1.25 a day in 1990, in 2010 there were ‘only’ 1.22 billion doing so! Almost impossible to imagine. As is the World Bank’s next encouraging statistic: Adjusting for inflation and purchasing power, the share of those living below $2 per day has dropped markedly since 1981, from 70 per cent of those living in developing countries to … a mere 40 per cent or 2.4 billion people. At this rate (roughly 10 per cent a year) nobody would be existing on less than $2 a day by 2050. No doubt some would call this progress when in fact capitalism remains indicted for condemning the majority of human beings to unnecessary poverty in a world of vast material wealth. Answering similar boasts of capitalist success (by Gladstone) in the nineteenth century Marx replied in Capital:

If the working class has remained ‘poor’ only ‘less poor’ as it produces for the wealthy an ‘intoxicating augmentation in wealth and power’, then it has remained relatively just as poor. If the extremes of poverty have not lessened they have increased, because the extremes of wealth have.

Rising Inequality

And all reports suggest that “the extremes of wealth” are now greater than ever (even greater than in Roman slave society some suggest) and are increasing. The richest 1% of the world’s population control half the world’s wealth and since the banking collapse of 2008 90% of all wealth gains in the US have gone to the richest 10%.

But even the World Bank’s ‘happy’ scenario is not going to happen. World capitalism’s crisis — or as the World Bank prefers — “slowdown in growth”, is not going away. Any “recovery” has been a recovery for the rich. Millions who have only recently been lifted out of (official) poverty are (unfortunately) due to slip back into it. Many of the 2.8 billion people who currently exist on between $2 and $10 per day are likely to fall back into (official) poverty. Particularly vulnerable are the 1.5 billion people who manage to survive on between $2-$4 per day.

And getting back to the minimum wage, in the UK even the ruling class are worried. Chancellor of the Exchequer George Osborne has tentatively called for a rise in the minimum wage to £7.00 an hour by 2015 (the OECD says that anything below £7.71 an hour today is a poverty wage). The Chancellor has not had a humanitarian conversion. He is worried that consumer spending will not rise enough to maintain even the feeble recovery they claim is happening. But this is a central contradiction of capitalism. The workers who create the commodities cannot buy them since profitable production requires lower wages. As Marx also noted “the last cause of all real crises lies in the poverty and restricted consumption of the masses”.

The Poverty of Reformism

And here we see the poverty of reformism. The Unite union have demanded that Labour adopt a “radical” new measure – a £1.50 increase in the minimum wage (after the 2015 election). At around £8.00 an hour even this would be below the OECD definition of a poverty wage by then. Under capitalism there is no such thing as a “fair day’s pay for a fair day’s work”. If that happened the system would collapse. As Marx described it

the more productive capital grows … the more does competition extend among the workers, the more do their wages shrink together. Thus the forest of outstretched arms, begging for work, grows ever thicker, while the arms themselves grow every leaner.

The only solution for workers everywhere is not an auction over how little they can get away with paying us – it is the abolition of the wages system altogether.