Industrial Reserve Army

A large number of unemployed and semi-unemployed people that often exist in capitalist society.

The industrial reserve army is constituted by a relative surplus population. Capitalist production can by far not content itself with the quantity of disposable labor-power which the natural increase of population yields. It requires an industrial reserve army that is independent of these natural bounds. With the increase in the productivity of labor, the supply of labor-power caused by capital is much larger than capital’s demand for labor-power by capital, and the over-work of the employed part of the working class further reduces capital’s demand for labor-power and swells the ranks of its reserve as a means of enriching the capitalists. The industrial reserve army rises and falls with the cyclical periods of capitalist reproduction, with the unemployed increasing during the crisis phase, when the scale of production shrinks and capital’s demand for labor-power decreases, and increasing at the peak phase of recovery, when capital’s demand for labor increases and the unemployed become the reserve force for expanded reproduction.

The existence of an industrial reserve army is convenient for capitalists to lower the wages of the workers and increase the degree of exploitation of the workers. Therefore, the industrial reserve army is both an inevitable product of capitalist accumulation, but also a favorable condition for the existence and development of the capitalist mode of production.