By Kathy White
This weekend, many Coloradans will celebrate Labor Day as Coloradans
have since 1887. More than 125 years
ago, the Colorado General Assembly designated a “Labor Day” to honor the effort
and achievements of the worker. Congress followed suit in 1894 declaring the
first Monday in September the national holiday that we still celebrate today.1
And while the Labor Day celebrations that we’ll see this weekend will look a
lot like those from decades past – picnics, parades, leisure time with family
and friends – the workers we celebrate and the value we place on their labor
are quite different.
The United States worker has never worked harder, produced
more or played less. U.S. workers log long hours – more than competitors in
other developed countries like the United Kingdom, Japan and Germany.2 U.S.
workers also take and are offered less paid time off (PTO) than peers in every
other developed nation. On average, the U.S. worker is given 12-14 days PTO,
but most of our workers use half or less of those days for economic reasons.3
Remarkably, the U.S., unlike every other developed nation on the globe,
including those with economies that outperform ours, does not require employers
to provide PTO of any kind – not to rejuvenate and celebrate, not to heal from
an illness, not to recover from a death in the family and not to adjust to the
birth or adoption of a new baby.
Moreover, the typical worker today must invest more in
themselves in order to compete in to today’s “knowledge-based economy.” Today,
roughly two-thirds of students seeking a bachelor’s degree borrow money from
banks to do it, when just 20 years ago only 45 percent borrowed for college.4
Today, the average worker is saddled with thousands of dollars in debt right
out of the gate.
Yet, despite this effort and achievement, today’s worker
reaps less benefit from their work and sacrifice than ever before. According to
research by the Economic Policy Institute (EPI), from the late 1940s to the
mid-1970s productivity and hourly pay for workers grew hand-in-hand. But
something went awry in the 1970s, something that continues to steamroll today.
Productivity continued to grow, but worker compensation stagnated. From 1973 to
2011, productivity grew by more than 80 percent while median hourly
compensation grew by just under 11 percent.5 (See
Figure 1).
Figure 1
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| Click to Enlarge |
The smart guys over at EPI attribute this “wedge” between
productivity and compensation to three things: 1) inequality of compensation;
2) shifts in labor’s share of all income; and 3) divergence of consumer and
output prices.
6 What
does that mean? Well, I’m not an economist, but it basically boils down to
this: the first means the gap between how much income in the economy went to
the worker and how much went to owners of capital. The second means the growing
gap in income between high income workers and everyone else. And the third
means the gap between the price of what U.S. workers buy and what they make. While
the economists over at EPI carefully explain each of these in great detail, by
sub-period no less, in their upcoming signature publication,
The
State of Working America 2012,7
the main reason why workers today benefit less from their hard work than
ever before is growing inequality. Inequality between workers, i.e. average
workers and CEOs. Inequality between those who work and those who own, i.e. average
workers and corporations.
Yes, you’re probably wishing you could dust off your version
of Marx’s
Das
Kapital about now or maybe you have a hankering to dig out that old
Pink Floyd
Animals album. You may even feel
like you want to review anthropologist David Harvey’s 10-minute RSS Animate
refresher that went viral earlier this year, the
Crises of Capitalism.
8
(Or maybe you’re just thinking that I did to write this blog.) But none of that
is necessary to get the real point, which is: from 1973-2011 less income
generated in the economy went to wages and more went to capital. In other
words, owners of capital took the gains of productivity as income (dividends,
interest, profits) for themselves, rather than sharing those gains with workers
through greater wages and better benefits.
And
this is a policy issue – not some natural economic storm that has befallen the
U.S., which means, it’s a reversible trend, a solvable problem.
Since the mid 1970s, the U.S. has witnessed an all-out
assault on unions and every worker’s right to collectively fight for better
wages, greater safety and decent benefits. When wages and productivity were
happily growing together in a long marriage of shared prosperity, the number of
workers covered by unions was at its highest point. In 1973, more than a
quarter of all U.S. workers benefited from union coverage. By 2011, that number
had dropped to just13 percent.9 (See
Figure 2)
Figure 2
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| Click to Enlarge |
Weakened labor unions has not only meant that there are
fewer union members who enjoy the higher pay and better benefits negotiated by
their union, but also that there are fewer labor standards that protect and
benefit all workers. Weakened labor unions has made it near impossible for the
average individual wage earner today to reap the benefits of their long hours
and increased productivity. It has left the individual worker almost powerless
to negotiate for health insurance, paid sick days or family leave, education
and training benefits, higher wages or even a national holiday to celebrate the
achievement and effort of the American worker.
But it doesn’t need to be this way. We can all support our
friends in labor and advocate for policies that advance our common ideals of equality,
opportunity for all and shared prosperity. So this Labor Day, amidst the
picnics and parades, we should all take a moment to reflect and consider what
we can do throughout the year to truly honor the achievement and effort of the
American worker.
Kathy White
303-573-5669 ext. 303
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