Save the tribute; just treat workers right
Aug. 26, 2013
by Ivan Raconteur

According to the US Department of Labor, “Labor Day, the first Monday in September, is a creation of the labor movement and is dedicated to the social and economic achievements of American workers.

“It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.”

Many changes have taken place since Labor Day was first celebrated in New York City in 1882.

As another Labor Day approaches, I wonder how many workers feel appreciated, on Labor Day or any other day.

I get the impression, from the people I have encountered in my travels, that many workers do not feel valued. In fact, many feel like they have been getting the shaft.

Perhaps this is not without reason.

According to the Economic Policy Institute (EPI), a non-profit, non-partisan think tank, productivity grew by 62.5 percent from 1989 to 2010, far more than real hourly wages for both private-sector and state/local government workers, which grew 12 percent in the same period.

Real hourly compensation grew a bit more (20.5 percent for state/local workers and 17.9 percent for private-sector workers) but still lagged far behind productivity growth.

This trend has continued for decades.

Productivity has improved, while wages have not.

While productivity grew 80 percent between 1979 and 2009, the hourly wage of the median worker grew by only 10.1 percent, with all of this wage growth occurring from 1996 to 2002, reflecting the strong economic recovery of the late 1990s, according to the EPI.

Perhaps it is not surprising that some US workers are disgruntled by the fact their improvements in productivity have not been reflected in their wages.

So, where is the money going?

According to the EPI, corporate profits are 22 percent higher than they were before the recession, while total corporate-sector employees’ compensation is 3 percent below pre-recession levels.

In short, profits are up, but they are not being shared with the employees who helped make those profits possible.

The EPI suggests this unhappy trend (from the point of view of the workers) is the result of an economy that is designed to line the pockets of the wealthy, rather than producing good jobs or a better standard of living for workers.

This trend has been in place for 30 years or more.

During the past decade, even workers with college degrees have not seen any real wage growth, according to the EPI. In fact, median weekly wages, when adjusted for inflation, fell slightly for both high school and college graduates from 2000 to 2009.

Some economists describe this trend of no wage increases as “median wage stagnation.”

“For the average worker in this country, there is a sense of despair, there is a sense of hopelessness and growing anger because they’re now seeing that corporate profits are hitting record levels again, corporations have extraordinary savings, and that CEOs always manage to pay themselves more,” said Stephen Lerner, director of banking and financial reform for the 2.2-million-member Service Employees International Union.”

This trend seems to compound economic problems.

The people at the top of the food chain are getting wealthier.

The middle class, which typically spends a greater portion of its income, generating economic activity, is getting squeezed out, and those at the bottom of the income scale are drowning.

In “A Decade of Flat Wages: The Key Barrier to Shared Prosperity and a Rising Middle Class,” EPI President Lawrence Mishel and economist Heidi Shierholz analyzed wage trends and showed that wages have been flat across all job categories and most major demographic groups.

The report noted that between 2002 and 2012, wages were stagnant or declined for the entire bottom 70 percent of the wage distribution.

It seems clear that productivity has been increasing while wages have not.

But that is not the whole picture.

Although wages have not increased, expenses have.

The cost of living continues to climb, with things such as health care, insurance, gas, and housing taking bigger and bigger bites out of workers’ budgets.

As a result, even if wages stay flat, workers have less money at the end of the month, because the cost of living has outpaced their wages.

As a result, many workers are finding themselves a paycheck or two away from being on the street.

This is not because they are lazy or unproductive. It is because they are trapped in an economic system that is designed to favor those at the top and ignore the majority of workers.

Workers have no say and no leverage. If workers push for more equitable treatment, more jobs are shipped overseas.

So, please forgive me if I don’t celebrate the glory of the American worker this Labor Day.

I suspect most workers would rather have good jobs and living wages than empty words and empty wallets.

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