Economy: Labor Day Archaic?

by Judy Ferro

Has Labor Day become archaic?

Perhaps everyone did take a moment yesterday to reflect on the contributions of the American labor movement to development of the middle class and the American dream. That’s still a far cry from the original Labor Days featuring parades and festivals demonstrating the unity and strength of American workers.

The history of the world is a story of rich and poor, of a small privileged elite catered to by masses of workers. Military might, tradition, and religion worked together to keep an upper class in place. Most centuries the 97% worked for subsistence. Gains came occasionally as famine or disease created labor shortages, but setbacks came also.

The discovery of the New World and the resulting surplus of land brought the possibility of a society of small farmers, each creating their own destiny by working land they owned. It was a great step forward for thousands even though gains could depend on the fair-mindedness or greed of those controlling finance, transportation, and markets.

After the 1920s—when, reportedly, factory owners paid workers $3 a week and mistresses $1800 a month—many believed inequality had caused the Great Depression and left much of the world open to communist revolutions. With millions out of work, our government stretched the Constitution enough to ban child labor and give unions legal standing. World War II ended the labor surplus by drawing millions into ammunition factories and the military.

In the next three decades labor unions worked with government to change the face of America. The 40-hour work week and overtime pay became standard. A federal minimum wage, originally applied only to those associated in some way with interstate commerce, became a national minimum.             Social Security and Medicare meant families didn’t have to decide between caring for their elderly or sending their kids to college.

Regulations made it possible for workers to insist on conditions and equipment necessary to do a job safely.

Unemployment insurance helped millions keep their families together during hard times.

Vacation and sick leave days, safety standards, and health insurance all made life better for millions of families.

Then things changed.

Between 1970 and 2011 union membership fell from 33% to 11% of American workers. Actually, only 4% of workers in the private sector have union contracts.

Productivity went up, but workers’ wages didn’t.

The reason isn’t clear. Some point to the Teamster’s ties to organized crime and air traffic controllers’ demands for $10,000 bonuses at a time when members already made double the average U.S. salary. It’s hardly possible, however, that events of the 1970s are responsible for a 40-year trend.

Others suggest that unions just aren’t necessary any more. Certainly many non-union companies—tech and healthcare in particular—offer good wages and benefits. If that were general, though, America’s middle class wouldn’t be shrinking, and inequality today wouldn’t rival that of the 1920s.

Some suggest that Americans today just aren’t joiners; after all, membership in churches and civic groups is also in decline. It’s hard to imagine, however, that workers who aren’t allowed to speak to one another at work, much less take a bathroom break, wouldn’t unite to change things if they dared.

And, some say growing inequality is the inescapable result of changes in technology and world trade, as though people were in no way responsible for change; as though people weren’t at work every day figuring new ways to exploit others.

All said, I guess Labor Day is still a better name for a holiday than Official End-of-Summer Day.

I hope your Labor Day was great!

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