Labor Day Issues Past and Present

The Past

Labor Day, September 6, 1967, is a day this author will never forget. Like most of us, I was not born with a silver spoon in my mouth. I paid for my college education by working summers in the Gary steel mills. The day before Labor Day 1965, I was offered a double trick (two shifts) at one and a half hours pay per hour (per hour pay was $2.37 and tuition was $6.00 an hour). I jumped at the opportunity to mine that pot of gold.  

          As I drove down to the Mill entrance, I heard on the radio that there was a Wildcat strike at the mills. The annual Local 1014 Steel Workers Union (which I was a proud member of) Labor Day Picnic earlier that day had resulted in a small group of celebrators upset about some change in shift assignments.  They marched down to the Gary Works mill and set up a picket line at the gate.

          I was paying attention the semester before in my Labor Economics class and had learned this was a non-sanctioned strike. So, when I pulled up to the gate, a fellow Union member the size of the wrestler Haystacks Calhoun carrying a pickaxe stopped my car. He informed me that we were on strike. I, armed with the wisdom and labor law knowledge, replied that this was an illegal strike. He disagreed. I then said, “What if I go down to the Union Hall? Will they tell me this is a legal strike?” He picked up the Pickaxe and looked me in the eye, and said, “Son, WE ARE ON STRIKE.” I replied, “Yes, Sir, and I wholeheartedly agree.” I turned around and went home impoverished but in one piece.

          I learned first-hand that day the difference between an industrial union strike ( a physical barrier) and a craft union strike (informative picket line).

          Labor issues continue today, and strikes continue, including current mechanics strike (craft union) at the Chicago area car dealerships. This treatise will explore some of those contemporary issues.


A word of Caution about Labor statistics

          Any discussion of labor issues starts with employment, unemployment, pay, and other statistics put out by the Department of Labor, Bureau of Labor Statistics (BLS).

           To understand those numbers correctly, a reader must take into account how BLS calculates the numbers. First, they gather Civilian force numbers. The Civilian Labor force only includes persons who are employed or seeking employment (labor participation rate). This number does not include the Joliet panhandler who recently refused an offer to dish wash from a local restaurant or anyone else who has dropped out of the workforce.

          The result is that the statistics may not explain all the labor issues precisely. For example, the decrease in labor force participation suggests that the official unemployment rate understates the share of Americans out of work. Workers who left the labor force during the pandemic and are not seeking employment are not counted among the unemployed, as per usual practice. As the economy improves, many of these workers may reenter the labor market looking for a job, adding to the number currently counted as unemployed. For that reason, Jerome Powell, chair of the Federal Reserve board of governors, recently suggested that those who left the labor force since February 2020 should be counted among the unemployed to understand the slump in the labor market better.

          Adjusting the unemployment rate for labor force exits and correcting for measurement are challenges that have affected government surveys in the pandemic. The U.S. unemployment rate in February 2021 may have been as high as 9.9% instead of 6.6%, as officially reported.

          The difference between the official and the adjusted unemployment rates was highest in April 2020. The official rate stood at 14.4% in that month, compared with an adjusted rate of 22.7%. The labor force participation rate had dipped to 60.0% in April, the lowest rate recorded in 2020, and measurement issues also loomed large in the government surveys

Some Current Labor Issues

1. The growth of unionization

          President Biden has committed to creating a cabinet-level working group with the sole focus of promoting union organizing and collective bargaining. The group’s task is to deliver a plan to increase union density and address economic inequality dramatically.” In that vein, the Biden administration has pledged to “study” areas that could significantly alter U.S. labor/management relations.

          Biden’s control of the National Labor Relations Board changes the pro-business Trump administration focus to a more compatible policy view with employee issues.

2. COVID-19 Compliance

          There will be a continued proliferation of ever-changing federal, state, and local statutes, ordinances, and executive orders, as well as local public health orders relating to COVID-19 and addressing issues such as:

  • closures, capacity, social distancing, masks, etc.;
  • employee and customer screening and protective measure requirements;
  • employee and customer positive test reporting;
  • work-from-home and remote work rules, policies, and procedures;
  • paid leave requirements; and
  • hazard pay requirements.

          The current state of affairs is a mess. For example, The Texas Supreme Court issued an idiotic ruling that temporarily blocks mask mandates which is a significant setback for the state’s counties and local institutions trying to follow public health guidance amid a surge in COVID-19 cases and hospitalizations in Texas.

          On the other hand, Florida and Texas counties and school districts ignore the prohibition of mask mandates.

          A significant problem for employees is how to deal with the customer who refuses to wear a mask.

3. Diversity and Inclusion

          Diversity and inclusion continue to be a top issue on the minds of employers in the wake of the 2020 Black Lives Matter protests and other social justice movements. Many retailers continue to create, implement, and manage comprehensive D&I programs and training initiatives. In addition, President Biden may issue a proactive requirement on federal contractors to require D&I or implicit bias training and programs.

4. Women in the workforce

          Pew Research reports More women than men quit the labor force in the first year of the COVID-19 recession. From February 2020 to February 2021, a net 2.4 million women and 1.8 million men left the labor force – neither working nor actively looking for work – representing drops of 3.1% and 2.1%, respectively. Women accounted for a majority of the decrease in the labor force in the first year of the downturn, even though they make up less than half of the U.S. workforce. Returning women to the workforce may ease as schools return to in-class.

          Hispanic and Black women accounted for much of the decrease in labor force participation among women. The net 2.4 million women who left the labor force from February 2020 to February 2021 included 582,000 Hispanic women and 511,000 Black women. Collectively, Hispanic and Black women accounted for 46% of the total decrease among women but represented less than one-third of the female labor force in the U.S.

5. Workers in low-wage jobs experienced the most significant drop in employment, and this continues to be a problem 

          Pew Research also notes from February 2020 to February 2021, employment among low-wage workers fell by 11.7%, from 28.1 million to 24.8 million. This compares with a loss of 5.4% among middle-wage workers, whose employment fell by 5.5 million over the period. Meanwhile, work among high-wage workers was roughly unchanged, at slightly more than 28 million.

          The COVID-19 recession hits hardest the services sector, especially the leisure and hospitality industries, and accounts for many low-wage jobs. The trend in the current recession stands in contrast with the Great Recession, which saw middle-wage occupations shed jobs at a higher rate than other occupations.

About Larry Hill

Dr. Larry Hill is Chair and Professor of Economics. Areas of interest include economic analysis, energy economics cost benefit analysis and economy. To subscribe to the email list of Dr. Larry Hill's Economic Memos, contact Tracey O'Brien at obrientr@lewisu.edu. Credentials include 1967 B.S., Indiana State University, 1968 M.S., Indiana State University, 1976 Ph.D., Northern Illinois University He is a member of honorary fraternities in economics and social science. He is currently writing a book on Managerial Economics and revising previous book, "The Basic Macroeconomics of the American Economy"

Leave a Reply

Your email address will not be published. Required fields are marked *