September 2018

By Jeremiah J. Baronberg

Every September on Labor Day, the United States pays tribute to the social and economic achievements of U.S. workers and emphasizes their vital contributions to the strength, prosperity, and well-being of the nation.

In the U.S., Labor Day became a federal holiday in 1894 and serves as a reminder of the critical role played by American workers in the U.S.’s standard of living, innovative production, and vibrant economy. It was not long ago that the average American worked 12-hour days and seven-day weeks. Where school age children toiled in mills, factories, and mines across the country. Where manufacturing employees worked 100 hours a week. And where the working poor and wave after wave of new immigrants faced unsafe working conditions, while lacking access to fresh air, bathrooms, and breaks.

Today, while we have much to be grateful for, Labor Day forces us to remember that the modern U.S. standard eight-hour workday and 40-hour workweek, even the very concept of a weekend, cannot be taken for granted. Like other worker protections—such as a minimum wage, the right to organize and bargain collectively, unemployment insurance, health benefits, overtime pay, and the prohibition of child labor—they are the product of decades of pressure and public advocacy from labor organizers and their supporters and the sacrifices of generations of American workers.

Unfortunately, this progress is somewhat diminished as we experience the many challenges we face as an economic and social polity. For example, a recent finding by the Pew Research Center shows that for most U.S. workers, actual wages have barely risen in decades. The Pew research reveals that, despite a strong labor market, real average wages for American workers have “about the same purchasing power (that they) did 40 years ago…(and) what wage gains there have been have mostly flowed to the highest-paid tier of workers.” The result is that even though their paychecks may be bigger than they once were, the actual purchasing power of many American workers’ wages just hasn’t kept up.

Workers should be doing better than this.

This lack of wage growth is further compounded when contrasting the difference in real wage growth between those workers in the lowest (3% wage growth) with the top tenth (nearly 16% wage growth) of the earnings distribution. Moreover, the U.S. Bureau of Labor Statistics recently announced that real average hourly earnings were down 0.2 percent over the 12 months ending July 2018. Perhaps most alarming is that wage stagnation, as the Pew data argue, is a key cause—and manifestation—of widening income inequality, which observers cite as a contributing factor to a host of correlated societal ills such as life expectancy, social mobility, health, education, and even innovation and entrepreneurial gaps.

While there are a number of suggested explanations for the persistence of wage stagnation, there is not only no consensus on any one cause behind it nor what to do about it. But that is no excuse for not trying.

Today and every day let us each commit to doing our own part to honor and celebrate the legacy of America’s workers and to recognizing our responsibility to safeguard their future.