Give Labor Its Day

Labor holds the key to the nation’s future global competitiveness, its standard of living and the health of its democracy. This Labor Day we honor the recession-battered U.S. workforce, which deserves to have its day.

The U.S. worker, typically the world’s most productive, has increased productivity for 18 months of this recession, even though he or she had fewer co-workers to share the workload. But such productivity cannot last forever, nor has it. At the end of the second quarter, the Labor Department reported a 0.9 percent dip in productivity for 2010. That dip could spark rehiring; the question is when.

Productivity is a two-edged sword. When fewer workers accomplish more, the greatest beneficiaries are not the workers but their employers, whose operations gain efficiency, and the shareholders, whose stock values rise. A recession gives employers the latitude to freeze or squeeze wages; high productivity allows them to postpone rehiring. More than layoffs, the delay in rehiring has kept 14.6 million former workers on government assistance and off the private payroll—nearly half of them for six months or longer—and has prevented new workers from landing a job.

Joblessness has worsened this year. The national unemployment rate held at 9.5 percent in July only because 181,000 workers stopped looking for work. The inclusion of part-time workers and those who have given up their job search but want full-time work would raise the rate to 17 percent or more.

Millions of U.S. workers had begun to lose ground decades before the recession—their wages flat, pensions phased out, benefits and promotions cut, and the jobs they performed regarded as expendable, the first cost to be slashed in any downturn. Unions have remained weak. Their top priority—the Employee Free Choice Act, which would make it easier for workers to organize—was introduced in both houses of Congress in 2009 but has been lobbied almost to death by business interests.

During the George W. Bush administration, workers at the top of the income ladder saw their pay and perks grow exponentially as their tax rates shrank, offering them plenty of cushion in hard times. Yet the enormous difference in pay at the top is not always merited by education, expertise or experience. Recent reports of excessive pay for unexceptional corporate leadership and wanton risk-taking with other people’s money have enraged the public. Too often the rich get richer not because their work is outstanding, but because the capitalist system favors them.

In the 1981 encyclical “On Human Work,” Pope John Paul II affirmed the primacy of labor: “Workers’ rights cannot be doomed to be the mere result of economic systems aimed at maximum profits. The thing that must shape the whole economy is respect for the workers’ rights within each country and all through the world’s economy” (No. 17).

President Obama has had some success reining in the recession during his 18 months in office. His administration has saved the jobs of millions of public workers through state assistance, rescued much of the auto industry, extended unemployment benefits to millions, kept inflation low and through loans and grants enabled more low-income students to attend college, improving the long-term workforce. But the administration did not make the workforce a priority when the recession hit, as Germany, for example, did. The German government subsidized both businesses and workers to prevent layoffs and retain workers for shortened work weeks. As the economy picked up, businesses began rehiring, and Germany’s unemployment rate has already dropped to pre-recession levels. By contrast, the U.S. government has neither created enough new jobs nor convinced the private sector to do so, which was the strategic plan.

To be competitive in the global workplace of the future, the United States will need to close the gap in income and education between the highest-paid workers and all other workers, a gap exacerbated by high unemployment. If left unchecked, this gap could also threaten the health of the large middle class that characterizes the world’s best democracies.

The Catholic Church, which values the worker as central to society, could help to elevate the workforce in the public mind. Societal leaders must understand that corporate profits and shareholder returns cannot in justice be made at the expense of the nation’s own labor force. Nations with a rich clique lording it over everyone else are too prevalent in the world, but none of them are thriving democracies. Nor are they just. If the United States is headed in this direction (as neglect of the growing income gap indicates), then workers, employers and civic leaders ought to begin this Labor Day figuring out how to reverse course.

This article appears in August 30 2010.