Business & Economics

How about protests instead of picnics this Labor Day?

Robert Reich

Labor Day is traditionally a time for picnics and parades. But this year is no picnic for American workers, and a protest march would be more appropriate than a parade.

Not only are 25 million unemployed or underemployed, but American companies continue to cut wages and benefits. The median wage is still dropping, adjusted for inflation. High unemployment has given employers extra bargaining leverage to wring out wage concessions.

All told, it’s been the worst decade for American workers in a century. According to Commerce Department data, private-sector wage gains over the last decade have even lagged behind wage gains during the decade of the Great Depression (4 percent over the last ten years, adjusted for inflation, versus 5 percent from 1929 to 1939).

Big American corporations are making more money, and creating more jobs, outside the United States than in it. If corporations are people, as the Supreme Court’s twisted logic now insists, most of the big ones headquartered here are rapidly losing their American identity.

CEO pay, meanwhile, has soared. The median value of salaries, bonuses and long-term incentive awards for CEOs at 350 big American companies surged 11 percent last year to $9.3 million (according to a study of proxy statements conducted for The Wall Street Journal by the management consultancy Hay Group.). Bonuses have surged 19.7 percent.

This doesn’t even include all those stock options rewarded to CEOs at rock-bottom prices in 2008 and 2009. Stock prices have ballooned since then, the current downdraft notwithstanding. In March, 2009, for example, Ford CEO Alan Mulally received a grant of options and restricted shares worth an estimated $16 million at the time. But Ford is now showing large profits – in part because the UAW agreed to allow Ford to give its new hires roughly half the wages of older Ford workers – and its share prices have responded. Mulally’s 2009 grant is now worth over $200 million.

The ratio of corporate profits to wages is now higher than at any time since just before the Great Depression.

Meanwhile, the American economy has all but stopped growing – in large part because consumers (whose spending is 70 percent of GDP) are also workers whose jobs and wages are under assault.

Perhaps there would still be something to celebrate on Labor Day if government was coming to the rescue. But Washington is paralyzed, the President seems unwilling or unable to take on labor-bashing Republicans, and several Republican governors are mounting direct assaults on organized labor (see Indiana, Ohio, Maine, and Wisconsin, for example).

So let’s bag the picnics and parades this Labor Day. American workers should march in protest. They’re getting the worst deal they’ve had since before Labor Day was invented – and the economy is suffering as a result.

Cross-posted from Robert Reich’s blog

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Comments to "How about protests instead of picnics this Labor Day?":
    • bradley thomas

      I enjoy and agree with professor Reich. I read your articles in the Des Moines Register. We have problems that we never had before. Its all about money. The middle class is being stomped on. As a Chicago Bears fan I have a hard time taking this without a FIGHT! I hope you will keep writing your articles. We have to let everyone know whats going on.Thank you for your integrity. The middle class is the backbone of America. Without the middle class we will surley be in peril.

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    • william

      This is the sad but true the way things are in the United States now. But really everything and almost all the problems concerning employment and money can be boiled down to one simple word–GREED.

      Why does everyone have to raise prices, taxes, etc on everything? why do prices always go up until there is a crash? greed. No other reason. Someone decides to raise their price for a good or service or raw material which begins a chain reaction all the way down to the end user. Price of oil goes up, gas goes up, groceries go up because cost to get things to the store goes up and on and on and on.

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    • Anthony St. John

      Bob, it’s hard to tell whom to protest against first.

      UC and CSU fees are totally out of control due to reasons that Reader’s Digest documents in their latest issue:
      “10 Reasons to Skip the Expensive Colleges”
      http://www.rd.com/money/10-things-every-parent-should-know-about-college/

      Too many courses are unavailable to far too many qualified California students who are supposed to be first in line.

      Our universities have stopped producing leaders for all of our institutions who are dedicated to doing the right things to guarantee the future for California, America and Humanity.

      Far too many of our California schools are politicized, and failing to educate us to at least be responsible citizens.

      A root case of the failure of our education system is that our politicians are focused on selling our their integrity to enough special interests to stay in office, so the future for our children and future generations is in increasing jeopardy.

      The Bottom Line is that we have no politicians in government today who are willing to “mutually pledge to each other our Lives, our Fortunes and our sacred Honor” like our Founding Fathers did.

      And we certainly don’t lack enough things to protest about every day of the year, including Labor Day.

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    • Victor S. Reuther

      Great post Robert, straight to the point. My late grandfather, Walter Reuther, would have surely affirmed your sentiments. It is tragic how the neoliberal narrative has seemingly been embraced by all those in the belt way. The democrats need to put forth a counter-narrative, one that is emphatic about restoring the purchasing power of average Americans as a means of creating jobs and economic growth here at home. Furthermore, it is time for the rank-and-file to learn what it truly means to be a card carrier — it is time the working people of this country mobilize themselves.

      As always, thanks for the insight.

      Victor S. Reuther

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