Free Classifieds
Letters
Editorials
Human Interest
Environment
Government
Education
Crime
Farm and Garden
Food & Dining
Wine
Events
Hospitality
Health
Art
Music
Real Estate
Business
Legal
Sports
Pets
Parks

Give Labor Its Due

September 5, 2009

The United States of America has been celebrating Labor Day since 1894. We don't have a specific day to celebrate Capitalists, probably because every day is capitalists' day.

Labor comes in many forms. Many very wealthy people continue to work at becoming wealthier. CEOs, upper-level, mid-level, and lower-level managers all work too. Parents work, unpaid, at bringing up their children, and most people do most of their own domestic work. We can all celebrate labor day, but this is a good year to think about Americans who work as employees and are not considered to be in management. I'll just refer to them as workers.

It seems funny to have a holiday, to celebrate labor by not working. But when Labor day was created, days off were few and far between. Sixty hour work weeks were the norm in farms and factories, and many jobs required over 80 hours a week. People were dying from paid work in a way not much different than they would later die from unpaid work in Hitler and Stalin's concentration camps in the 1930's.

What we need to ask about workers and the economy is, what would be fair pay for them, are they getting that fair pay, and how could the situtation be fixed?

In post-modern free-market economic theory everyone is paid a fair wage by definition. Such an idiotically useless theory could only have been invented by modern academic economists. We can learn much more by going back to the original free-market ideas of Adam Smith in The Wealth of Nations. But first, let's take a brief detour through socialist theories.

One form of socialist thought on worker pay is based on the idea of equality. It can be summed up thus: we are all working, we should all get an equal share. Another form is summed up in the old slogan: labor is entitled to all it creates. In practice this too would mean CEO's of automobile manufacturing companies would get roughly the same pay as assembly line workers.

When Adam Smith wrote about free market pricing, he was contrasting that to markets where pricing was set in other ways. I'll lump all other methods into this: take-it-or-leave-it pricing. These prices, for goods or labor, could be set by a government, a guild or merchant group, or by a private monopoly. Most of these methods were left over from feudal economic systems.

The problem for workers in modern industrial society [after the Civil War in the United States] was that they could not freely negotiate their wages with industrial employers. To borrow from 19th century rhetoric, the industrialists owned the means of production, first the factories and mines, later the stores and even farm lands. They had jobs to offer, but offered them to workers on a take-it-or-leave-it pricing basis. Some were more fair to their workers than others, but most grabbed all the value created by their industry for themselves.

Labor unions tried to even up this dynamic. Though an industrialist might not need to bargain fairly for wages with an individual worker, he might be balanced by the collective bargaining power of labor unions. And indeed, unionized laborers are usually paid significantly more than those who fail to unionize. Unions may have their own problems, but I'll save that topic for a later editiorial.

Today the details have changed, but the basic dynamic has not. The federal and state governments do set minimum wage standards, but many employers evade these standards by forcing workers to work some time that does not appear on the books. There are some labor unions, but they mostly exist only in the government sector and for highly-skilled workers.

Even investors, who in theory are capitalists themselves, complain about the power of corporate CEO's to line their own pockets. There is no auction system for corporate CEO compensation that would set Adam Smith-style fair prices for their pay. And most workers can take or leave the same pay scale at any corporate retail chain. Some workers can improve their lot by getting skills, but when the skilled job slots are filled there are still tens of millions of near minimium wage jobs.

Our national culture needs to change. We need to respect the fact that a big percentage of jobs require service skills that are easy to learn. They are hard jobs, standing on your feed all day, ready to serve anyone and everone. We need the people who do those jobs. We need them to be good citizens. And we, the American People, need to see that they are paid fairly. There is no one way to make this change. Higher tax rates on annual incomes above $1 million would help. More union organizing would help. But the main thing that would help is business executives identifying more closely with their employees. In other words, be a good business person, not a greedy predator.

We also must value honest, productive work. The upper-class, inherited-wealth idea that life is a round-the-clock party and that the only money worth earning is easy money is not realistic for most people. Saving money to obtain life's goals should be a basic value. Instead people are duped into using credit to get things — consumer items, houses that are too large — that should have little to do with life's real goals.

William P. Meyers