This Labor Day, where we are is not where we want to be.
Labor Day is about recognizing the contributions working people have made to the social and material prosperity of the country. So show labor some love and give yourself a pat on the back for your own contribution. I hope your pay and benefits reflect the gratitude your country and your employer feel toward the work you do.
But the country needs new ways to ensure most workers will have something to celebrate, because the old ways aren’t working so well.
Six years into recovery from the Great Recession, more jobs are being created and the unemployment rate keeps dropping, but the financial love is not yet raining down on most workers.
The stock market is up and down, but mostly up since the recession, despite recent corrections. That’s good if you have a lot of money invested. Executive pay is way up, and people on Wall Street who play with money for a living are doing quite well.
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But most workers aren’t getting a fair share of what they help create. It’s been that way for years, but the recession and its aftermath made income and wealth inequality impossible to ignore. Both political parties are talking about it this election cycle.
A report from the Economic Policy Institute last week explored the disconnect between productivity and the typical worker’s compensation.
Here are a couple of points: “Net productivity grew 72.2 percent between 1973 and 2014. Yet inflation-adjusted hourly compensation of the median worker rose just 8.7 percent, or 0.20 percent annually, over this same period, with essentially all of the growth occurring between 1995 and 2002.”
After 1948, worker compensation rose right along with productivity. That changed around 1973.
The report says, “Since 2000, more than 80 percent of the divergence between a typical (median) worker’s pay growth and overall net productivity growth has been driven by rising inequality (specifically, greater inequality of compensation and a falling share of income going to workers relative to capital owners).”
What we all know by now is that the economy is making money, but most of it goes to a small group of people. That isn’t good for the majority of Americans economically or politically.
It doesn’t have to be this way. We can’t go back to the economy that existed before 1973, when manufacturing jobs and union representation kept workers’ interests on the table economically and politically. But we don’t want to stay where we are now.
There are ongoing efforts to address pay at the low end, such as Seattle and other cities adopting higher minimum wages. A new ruling by the National Labor Relations Board (NLRB) should help workers in minimum-wage jobs by clarifying who is responsible for their compensation.
Franchises, for instance, have been great for protecting corporate profits. A corporation such as a fast-food company could say it was not responsible for workers at stores owned by individual franchisees. And those franchise holders could say they’re just little guys, not the corporation.
In fact, franchise holders are fighting Seattle in court over the city’s decision to classify franchises as large businesses, which means a faster timetable for reaching $15-an-hour minimum pay.
The NLRB ruling is about union representation, so I don’t know what its impact might be on the Seattle case, but what’s good about the ruling is that it tries to adapt to the growth of franchising and the use of contract labor.
The minimum-wage-increase campaigns being waged around the country are also responses to new circumstances in which a lot of job growth has happened at the low end.
There’s a need for innovation at all levels to replace the power that workers lost with the decline of unionization.
I read an article recently by Jess Kutch, a young digital strategist and co-founder of Coworker.org. Coworker is an online platform designed to help workers, from college faculty to baristas, come together and advocate for their needs.
Starbucks workers used a Coworker petition and media campaign to win the right to display their tattoos. That seems like a small thing, but it may be part of a start toward a larger voice for modern workers and maybe more respect for labor.