This Labor Day, We Need to Pay Attention to the Wage Crisis

This weekend, amid the days at the beach and barbecues and last-minute back-to-school shopping trips, it’s worth remembering what Labor Day is really about: the work that builds this country, and the American tradition of workers coming together to get fair compensation for that work.

Unfortunately, this Labor Day, an ongoing crisis of employment and wages is making it hard for workers to carry that tradition forward.

Harold Meyerson puts the situation into stark relief:

Corporate profits — which comprise a larger share of the nation’s economy than at any time since World War II — are being plowed into share buybacks or dividend payments, but decidedly not into wage increases…The United States leads the industrial world in the percentage of its jobs that are low-wage

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This situation has real, and negative, effects on the whole economy, notes Meyerson, as does Timothy Noah.

Part of the explanation is that middle class jobs are vanishing, especially in manufacturing, and the job growth we’ve seen after the recession hasn’t been the re-emergence of middle-income jobs, but their replacement with lower-wage jobs.

In many ways, our economy has become “financialized”: not only has the financial sector swelled to outweigh other industries, but every industry is facing increased pressure from a more-powerful financial sector to “maximize shareholder value:”

The pressure to respond to the short-term demands of Wall Street has paved the way for an economy in which companies are increasingly disconnected from the state of the nation, laying off workers in huge waves, keeping average wages low and threatening to move operations abroad in the face of regulations and taxes.

The result is that for many companies, labor costs start to look like just another input, rather than being actual people who create the value of the company.

And, predictably, that means an economy that distributes its rewards exactly how you’d expect:

Most of the modest growth has gone to the small share of the population that owns the vast majority of the country’s assets…workers only got about a third of the economic growth generated so far this year.

It’s no wonder than an overwhelming majority of low-wage workers, despite wanting to do well at their jobs, are feeling underpaid, frustrated and pessimistic.

Economist Jared Bernstein notes that the usual explanations about education or globalization are insufficient to understand what’s going on. He says that we need to make increasing overall employment levels a major priority, because that will increase working people’s leverage to demand more in wages.

And yesterday’s fast food strikes show that, for many working people, enough is enough. They’re ready to take action—at some risk to their own jobs—to speak out about how they aren’t getting paid enough to live on. And you can make your own day at work better using our website FixMyJob.com.

As Teresa Tritch, writing in the New York Times, puts it:

There’s no intrinsic reason that service jobs at profitable corporations, say, in restaurants and big box stores, should pay so little. What is missing today is employee bargaining power…Corporations benefit from the status quo. Workers don’t. That’s why they want a new bargain.