This is an excerpt from an essay I had to write for my sociology class that I'm not very proud of but I think it helps explain wage-theft as separate from surplus value so here it is.
But where does poverty come from?
“We have two basic poverty problems in the United States. One is the prevalence of low-wage work. The other concerns those who have almost no work.” (Edelman, 2012)
The minimum legal wage is far too low, to the point where those working at the minimum fall below the poverty threshold for a family of three and must rely on federal assistance programs to feed themselves.
But by what are wages determined?
“Wages are the price of labor-power, the cost to produce a given amount for a given time. It is the cost necessary for the maintenance of the laborer as a laborer, and for their education and training as a laborer. Thus, the less time involved in training for a particular sort of work, the smaller the cost of production to make the worker, the lower the price of their labour-power, their wages. With jobs where little instruction is necessary and the mere bodily existence of the worker is sufficient, the cost of their production is limited almost exclusively to the commodities necessary for keeping them in working condition. The price of their work will therefore be determined by the price of the necessary means of subsistence. But just as the capitalist takes into account the wear and tear of the instruments with which the workers work into the price of the commodities they sell, in order to retain a fund to replace these when they wear out, the capitalist also includes in the price of labor-power the cost of propagation, by means of which the race of workers is enabled to multiply itself, and to replace worn-out workers with new ones. The wear and tear of the worker, therefore, is calculated in the same way as the wear and tear of the machine. Therefore, the cost of production of labour-power is the cost of the existence and propagation of the worker. These costs form a minimum of possible wages, separate from that mandated by the state. This minimum wage, like the determination of the price of commodities in general by cost of production, is not accurate to the single individual, but only for the whole of society. Individual billions of workers do not receive enough to be able to exist and to propagate themselves; but the wages of the whole working class adjust, within the limits of their fluctuations, to this minimum.” (Marx, Aveling, & Engels, 1995).
This means that wages naturally tend to fall wherever they can, to wherever this minimum lies. If this minimum is below what is legal, then the capitalists will still attempt to reach it by illegal means, such as wage theft.
“Wage theft occurs when employers withhold wages that are owed to a worker, for example by requiring workers to work off the clock or refusing to pay overtime. In nearly 9,000 investigations of the restaurant industry, the wage and hour division of the Department of Labor found that 83.8% of the shops investigated had wage and hour violations.” (Gould, 2014)
Wage theft is the expression that this minimum necessary to sustain the worker is beneath what the capitalist is required by law to pay.
As for unemployment, both it and by what wages are determined are linked. “The two overlap,” as Paul Edelman says. In the case of the worker who is not expensive to train and therefore to replace, the capitalist has more options. If this worker does not perform adequately for the capitalist, in one way or another, they can simply be fired and replaced with another worker. This both enables wage theft, since the worker would prefer to maintain their job and any possible benefits than to be fired, and enables lower wages in general. So long as there are more workers available than work, the worker is threatened and must be competitive. They must provide a better price for the commodity of labor-power. By working more, in some capacity, for less. So the minimum possibility of wages of the precariously employed is allowed therefore to plummet as the reserve army of labor grows. Then, should lower wages increase unemployment? Of course not. But it enables the growth of the reserve army of labor. If workers then find themselves paid too little for them and their families to live, they will try to take on more work if they can. The reserve army of labor is not characterized by being formally unemployed, but rather (like reservists) being ready to take the place of a member of the active army of labor. Of course, once they find themselves the extra work, they join the active army of labor, and the newly displaced worker finds themselves a new conscript to the reserves.