There's More to Labor Day Than an Extra Vacation Day
WHY YOU SHOULD CARE
Because it’s workers that fuel the American economy.
By Laura Elizabeth
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Labor Day marks more than the unofficial end of summer in the United States. The first Monday of September is also meant to honor the contribution that workers make to the well-being of the country — right now, the size of that contribution is unprecedented.
“We tend to look at the labor market as a barometer for the health of our economy,” explains Jim Glassman, head economist for Commercial Banking at JPMorgan Chase. “It’s looking amazingly good,” he says, noting:
The country’s unemployment rate is at a 16-year low of 4.3 percent.
Job creation and employment figures over the summer have far exceeded Wall Street forecasts. Lay-offs are at the lowest point since the early 1970s and the lowest ever relative to the size of the labor force, which is almost double today what it was back then, according to the U.S. Department of Labor. Several years ago, in the spring of 2014, employment returned to pre-recession levels. Today, employment is at a new record high and stands six percent above the peak level reached a decade ago. And it’s not just the fact that people are going to work that helps strengthen the country, says Glassman.
“Most economies live around what consumers do,” he notes. “Consumer spending in the U.S. is 70 percent of the economy. So the economic health of the worker is important.” Put simply: the nation’s prosperity is powered by how successful its people are.
What better time, then, to celebrate the true meaning of Labor Day? The holiday first emerged in the U.S. in the 1880s as a tribute to the labor movement, which fought for better working conditions and fair wages. In essence, the movement made it easier for American workers to find good jobs and cultivate their own upward social mobility.
Companies thrive on what their talent contribute to the business, so it’s in everyone’s interest for workers to be happy.
Jim Glassman, head economist, JPMorgan Chase & Co.
But those rights were hard-won: Unions faced violent opposition from anti-labor employers. In fact, Labor Day began more as a protest march, one Tuesday back in 1882. Workers paraded through New York City carrying signs with slogans such as, “Labor creates all wealth.” A national holiday to recognize that fact was finally made official 12 years later. Remembering those foundations is crucial to maintaining a booming economy and country today, Glassman says. “Companies thrive on what their talent contribute to the business, so it’s in everyone’s interest for workers to be happy.”
One reason behind the job market recovery this year is what Glassman calls “the digital economy.”
“It’s an upshot of the digital frontier opening up all kinds of possibilities; technology is fueling innovation and giving people more options.” He cites the sharing economy and start-up culture as opening up a “whole new frontier” for working-age Americans, who no longer need to “sit around and wait for a defined job.” And he thinks this will continue to fuel the labor market in the future: “The businesses we’re going to be living with ten years from now are going to look a lot different to the ones we’re living with today.”
Still, nothing is perfect. While official metrics show near full employment in the U.S., skeptics point to slow wage growth and the number of people in part-time work, although down significantly from recession levels, as cause for concern. And while technology has in some cases created new jobs — in fact, the U.S. economy has created enough jobs to employ anyone who wants to work through two-and-a-half centuries of significant technological change — there are fears it will displace workers as well, particularly with the advent of factory robots and self-driving cars. Even the optimistic Glassman is keen to point out that, when it comes to a truly roaring economy, “What matters most is not how fast you’re growing, but how well your economy is doing per person — how much income is each person earning?”
So, if you remember one thing on Labor Day, perhaps make it this: Every single worker counts. “When we’re all working, we’re all contributing to something — we all depend on each other,” Glassman points out. If the labor movement gave everyone a shot at the American Dream, then Labor Day celebrates how workers keep that dream alive: for themselves, for each other, and for the country itself.
- Laura Elizabeth, OZY Author Contact Laura Elizabeth