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Anxiety Reigns for Workers This Labor Day

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The mood of the American worker in a word: jittery.

This Labor Day, organized labor celebrates (if you can call it that) its 12 percent-of-the-workforce clout – 7 percent if you count only the private sector.

Gone are the days when the unionized workforce was an effective checks-and-balance agent for stratospheric executive pay. Thirty years ago, when unions were stronger, the ratio of top executives’ pay to average worker pay was about 35 to 1; today, the ratio of S&P 500 CEO compensation to average worker pay is 344 to 1.

Slipping away is the ability of unions to help define a viable middle class.

Union members, like most of the rest of the workforce – except for the top 5 or so of earners – are observing Labor Day 2008 anxiously.

Job eliminations, raise pools that lag this year’s inflation pace, and wage freezes are common.

According to a survey taken in May by the John Heldrich Center for Workforce Development, more than 8 in 10 workers are worried about the state of the job market. (See Heldrich Center study.)

Although a majority of workers in many surveys have said they’re at least passively looking for a better job, the Heldrich report found that two-thirds think it’s a bad time to be looking.

The U.S. Bureau of Labor Statistics reinforced that concern in a report published in August. About 8.3 million U.S. workers lost their jobs from January 2005 through December 2007 because of business closures or moves, insufficient work, or elimination of their shifts or jobs.

The Heldrich study produced a further sobering note: Slightly more than half of the workers it surveyed are working fewer hours than they’d like. For hourly wage earners, that translates into an income cut.

Various reports peg the share of workers who say they’re living paycheck-to-paycheck at one-third to two-thirds of the workforce. And, as a whole, the national personal savings rate has fallen below zero; we are going into debt and spending more than we earn.

Then, because our national health care insurance system ties subsidized coverage to employment (or poverty), the prospect of losing an employer-based plan is terrifying. Correctly so.  A leading cause of personal bankruptcy is inability to pay medical bills.

Small wonder that The Conference Board finds consumer confidence tumbling. Why would it not in the face of slipping home values in many markets and higher prices for such consumer-prominent products as gasoline and food?

Yet few of these opinions are mirrored at the top of the income scale. Top executives and political policymakers continue to build vacation homes and hop on airplanes, commercial and private. They continue to have tax dodges that lesser earners don’t. A $4-a-gallon fill-up doesn’t dent their budgets or force them to make spending choices.

The Economic Policy Institute reports that top 1 percent of earners enjoyed income growth of 204 percent from 1979 to 2006, while the lower 90 percent of earners gained 15 percent.

Meanwhile, business owners rail against any increase in the minimum wage, blaming inflation on those modest raises for a relative handful of the nation’s least-paid workers (which don’t come close to keeping up with cost of living).

In short, more productivity is being squeezed out of the workforce in return for a smaller share of the rewards. The need for systemic change is paramount.

Can we place hope in an election year?

About the Author: Diane Stafford is the workplace and careers columnist at The Kansas City Star.

A veteran journalist, she has held several reporting and editing positions at The Star on both the business and metropolitan desks. Currently, she writes columns that appear in The Star on Thursdays and Sundays as well as other business and economic news articles throughout the week.  Her daily “Workspace” blog also is available at www.workspacekc.typepad.com. She is the author of “Your Job: Getting It, Keeping It, Improving It, Changing It,” a career advice book.

She holds bachelor’s and master’s degrees in communication from Stanford University.


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