The stagnation of wages experienced by a vast majority of American employees has emerged as a core issue in economic policy debates, with parties of both parties noting its significance. Economic inequality has emanated as a central issue and the policy makers are already seeing the link between inequality and wage stagnation. Wage stagnation implies how inequality rise has destroyed the vast majority of the United States employees. The economists, Karl Marx and Adam Smith, presented an interpretation of the “The Great Divergence” scenario.
Graph: Productivity (goods produced per worker per hour) against average hourly wages.
Adam Smith Interpretation
For long duration, people linked lower real wages of goods-producing workers to lower productivity. From the graph, it is noticeable that significant sector productivity and real wages continued to increase proportionately until the 1970s. After that, the considerable sector productivity continued to rise while the real wages for goods-producing workers remained and stagnant or otherwise reduced. Adam Smith, a proficient economist predicted such a trend and as such had an in-depth interpretation of the then scenario and now; across the patterns as the years keep rolling.
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Adam Smith explained the trend basing his explanation on the relationship between the division of labor and productivity. The pace at which the economy rises is determined by the size of productive labor and the productivity of the labor. Smith and McCulloch (1838) mentioned that the labor productivity relies upon the technological progress that a nation experiences and that builds upon the division of labor. The division of labor raises the productivity of labor through various aspects of specializations of the tasks. Marx and Engels (1942) reiterated that w hen a duty is subdivided into varied sections and an employee is tasked to perform the smaller portions of the duty as opposed to the whole job, their efficiency increases and therefore, can focus their attention in more careful manner. That, thus, implies that division of labor means a transfer of complicated production process into several more straightforward operations with a view of facilitating the introduction of the various production methods ( Godfrey-Smith, 2009) .
According to Marx and Engels (1942), Adam Smith did particular emphasis on the social division of labor that emphasized the cooperation of all to satisfy the desires of everyone. Different kinds and types of labor can produce goods to meet the personal wants of the producers and they change into social labor, which produces goods for the exchange for other goods ( Smith & McCulloch, 1838) .
In the earlier dates, before the year 1970, there was less technological advancement in the various methods of production. One person would do a variety of the junks of work alone. That was highly time-consuming and less productive ( Godfrey-Smith, 2009) . At the same time, it proved to be costly. With the advancement in technology and fresh methods of production, a shift was realized in the productivity. The aspects of specialization came into operation. That diminished the charge on labor and increased productivity ( Godfrey-Smith, 2009) . Workers became more goals oriented, specialized, and thus led to the increase in productivity outcomes.
Karl Marx interpretation
Karl Marx views the graph from a capitalist point of view. Before the 1970s, Engels (1880) argued that the capitalist aspect had not taken a toll on the wage bill, and thus the productivity and real wages were moving in proportionate degrees. After that, the aspect of increasing productivity with stagnant or decreasing wages was caused by exploitation of the capitalist class of the community ( Marx & Engels, 1942) . It was defined by the mediaeval society in which the individual production was small. The various means of production were adapted for personal usages thus were primitive, petty, ungainly, and dwarfed in action (Engels, 1880). The production was meant for immediate consumption. In the event of excesses in production, they offered the extras for sale, and thus entered the exchange system (Engels, 1880). The creation of commodities was therefore only in infancy. The amount of work done was proportionate to the labor costs at that time and thus proportionately increased the productivity.
Exploitation occurs because of making use of someone due to their weakness or vulnerability for individual gains or accomplishments. Marx explores the aspect of exploitation through the control and authorities within a structure of those who are in power and them this at are made to follow orders ( Marx, 1981) . Capitalism entails an idea whose fundamental principle is to raise the exchange value of commodities and with a view to gaining profit. It is majorly concerned with freedom to produce and involvement in free enterprise ( Marx, 1981). The goods are generally manufactured to be exchanged with other commodities, and the value of the exchange is in the form of money. The capitalists own the means of production, and the employees sell their labor.
According to Marx, the tendency and the result of the capitalist mode of production are continuing to raise the productivity of labor. Thus, it also increases the quantity of the means of production that are converted into products by the utilization of similar amounts of extra labor ( Marx & Engels, 1942). The additional labor is then progressively distributed over a more significant quantity of products, and that reduces the price of every individual commodity in general. That, therefore, implies that the development of capitalist production and the subsequent reduction in costs, and subsequently an increase in the mass of goods.
Different companies offer small amounts of money, and the struggling labor market have little power to reject such kinds of offers. In such a situation, any amount of funds invested is an advantage. Most of the labor is overworked and paid little salaries ( Marx & Engels, 1942) .
On another view, the growing perfection of pieces of machinery caused by competition has become a necessary need for every producer or manufacturer ( Marx, 1981) . A rising displacement of workers has complemented that. The machines profoundly cut the wage bill and increase productivity. Technological advancement in various sectors has therefore resulted in the decrease in the volume of labor that is employed ( Marx & Engels, 1942) . Small salaries are paid to the ones that are engaged. Such capitalist and technological advancement ideas according to Marx account for the last section of the graph from the 1970s to date.
There is need, for a way forward, for proletarian revolution as that will assist in providing solutions to the various contradictions. Such a revolution seeks to seize public power through transforming through socialized means of production.
References
Engels, F. (1880). Socialism: Utopian and scientific. The Mar , 683-717.
Godfrey-Smith, P. (2009). Theory and reality: An introduction to the philosophy of science . University of Chicago Press.
Smith, A., & McCulloch, J. R. (1838). An Inquiry into the Nature and Causes of the Wealth of Nations . A. and C. Black and W. Tait.
Marx, K., & Engels, F. (1942). Wage-labour and capital (pp. 203-17). Workers' Literature Bureau.
Marx, K. (1981). Capital, volume three. The Marx-Engels Reader , 439-42.
