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Originally published August 30, 2014 at 8:02 PM | Page modified August 31, 2014 at 8:19 AM

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A bright spot for labor as tough times remain

Tough times remain for organized labor, but successful efforts in cities and states to raise the minimum wage, most notably $15 in Sea-Tac and gradually in Seattle, is something to celebrate.


Special to The Seattle Times

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Tomorrow is a holiday dedicated to organized labor. The first Labor Day was celebrated in New York City in 1882.

Some credit Peter McGuire, of the Brotherhood of Carpenters and Joiners and a co-founder of the American Federation of Labor, with the idea for the holiday. Others say it was Matthew Maguire, of the International Association of Machinists.

Even if you never joined a union, you benefit from members’ efforts and, in some cases, spilled blood. They are responsible or get partial credit for such goods as the five-day workweek, the end of child labor, employer-provided health insurance and the Family and Medical Leave Act.

Not for nothing did the high mark of private-sector union membership coincide with the zenith of the American middle class. So if you see a union member this weekend, thank her.

This Labor Day, labor actually has something to celebrate: successful efforts in cities and states to raise the minimum wage, most notably $15 in Sea-Tac and gradually in Seattle.

Still, these remain difficult times for unions — only 6.7 percent of the private-sector workforce was unionized in 2013 — and for all people who depend on wages for their income.

Here are a few of the challenges:

• Unemployment continues to be stubbornly high. July’s national unemployment rate of 6.2 percent is unprecedented for this far into a post-World War II recovery. Two people are chasing every job opening. The number of people unemployed for 27 weeks or longer was 3.2 million.

• Part-time workers are at a record. Temp and contract work, whether a person wants it or not, is much more commonplace than a decade ago.

• Another unique characteristic of this recovery is the number of people aged 25 to 54 who aren’t able to find work. They make up most of the 6 million “ missing workers” left by the recession. The gap between this prime working-age cohort and the overall civilian population is the highest since record keeping began in the late 1940s.

• Most jobs created since the downturn are low-wage positions. According to a study prepared for the U.S. Conference of Mayors, new jobs pay an average of 23 percent less than those lost in the recession. This even though corporate profits and the stock market have hit record highs.

This adds to inequality as well as pressuring a trend dating back to the mid-1970s where most Americans have seen their wages stagnate or even decline.

The workers in these jobs disproportionately lack benefits and health insurance. Employers gain by off-loading the costs onto taxpayers in the form of Medicaid, food stamps, etc.

The jobs also tend to involve forced flextime, where employers demand that workers handle arbitrary schedules that also keep many from achieving full-time hours.

• A skills gap or de-skilling? The conventional narrative to explain persistent joblessness is that employers can’t find workers with the necessary skills. This is no doubt true in some cases.

However, Peter Cappelli of the University of Pennsylvania, recently produced a paper arguing that the skills gap is overstated. In many cases, workers are overqualified. The demand for cognitive skills has fallen since 2000 even as the number of college graduates has increased.

Likewise, as Michael Teitelbaum reported in the Atlantic, a shortage of graduates in science, technology, engineering and mathematics (STEM) is not to blame for unemployment. Those jobs have been growing slowly or remained flat.

• The fissured workplace. Not so long ago, large companies did most things in-house. The jobs tended to be secure and pay well, offering benefits and overtime. They were a backbone of the middle class.

Today, companies are enhancing their profits by sending much of this work to contractors, subcontractors and franchisees. The biggest motivation is to cut labor costs. It is magnitudes beyond outsourcing, as shown in the important book, The Fissured Workplace. Author David Weil, a Boston University professor, was recently named wage and hour administrator of the U.S. Labor Department.

With fissuring, companies are able to keep tight control over production and service standards, thus safeguarding their brand. But workers at these vendors see a decline in wages, benefits and safety. This new way of organizing employment has increased since the Great Recession.

• Job polarization. The “It” event at the recent Jackson Hole central bankers soiree earlier this month was the presentation of a paper by David Autor of MIT. Instead of broad-based job losses from a new wave of sophisticated automation, he argues, we face a massive polarization.

Low-wage jobs that can’t easily be replaced by machines will remain and increase. Much of the high-paying work done by the elites in finance and technology will also remain. But the large number of jobs in between, another fundamental of the old middle class, will be destroyed.

These are trends similar to ones people once joined unions to combat. Nowadays, much of the working class sees organized labor as an artifact or an enemy. For them, Labor Day is merely another holiday, unless they have to work Monday. If they have a job.

You may reach Jon Talton at jtalton@seattletimes.com



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About Jon Talton

Jon Talton comments on economic trends and turning points, putting them into context with people, place and the environment in the Pacific Northwest
jtalton@seattletimes.com

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