Labor Day puts an exclamation point at the end of summer, and sounds the traditional starting bell for our election campaigns. And it is the one day of the year that honors working people – those “who from rude nature have delved and carved all the grandeur we behold,” in the words of one 19th century proponent of the holiday.
These days find fewer workers delving and carving, and more of them word-processing or telemarketing. How are they doing this Labor Day?
That depends on whether we look at the top of the labor market or further down the ladder, among the modern-day delvers and carvers. Those at the top –- say the top ten percent of earners with scarce skills and years of higher education –- are doing well indeed. (The top one percent is doing even better.) (See Economic Policy Institute data.) The globalization of markets and growing mobility of capital seem to have increased the market power of the top echelon of workers.
But gains at the top have not trickled down to the bottom. Instead, companies’ intense pursuit of lower labor costs and higher profit margins has eroded job security, wages, and working conditions for many workers. (See Economic Policy Institute data)
The fact of growing inequality seems clear. Yet a major political fault line runs between those who believe it is a serious problem calling for government action and those who do not. Of course, the one-two punch of the sub-prime mortgage crisis and rising oil prices has raised alarms across the political spectrum. But the failure of ordinary working people to secure a fair share of productivity gains and spectacular corporate profits has not. That brings us back to the election campaign that is already well underway this Labor Day.
On one side, news of growing economic inequality is met with a mix of complacency and fatalism. After all, global market forces are behind these developments, and have produced more by way of fabulous wealth at the top than impoverishment at the bottom. Those in this camp – let’s call them Republicans – often portray those who complain about economic inequality as captives of misguided economic populism and class envy. Or, in the words of McCain supporter Phil Gramm, as “economically illiterate” and “whiners.”
On the other side of the aisle are those who are committed to using public policy to foster the well-being of those least favored by the market. Recent studies indeed show that low and middle-income Americans do better economically in Democratic administrations (while higher income Americans do about equally well). In this respect, the Democrats remain the party of the New Deal.
Indeed, divisions are especially sharp over two major pillars of New Deal labor policy – the labor law’s regime for enabling workers to unionize and bargain collectively, and the Fair Labor Standards Act’s minimum wage and overtime protections – both of which were intended to secure for ordinary workers a fair share of the rewards of economic prosperity.
On the issue of unionization, there is less disagreement over what is happening than over what to do about it. Mainstream economists, including current Fed Chair Ben Bernanke, agree that growing inequality is partly due to the decline of unions. Unions give workers leverage to bargain for a fair share of company profits. No wonder so many workers who don’t have union representation say in surveys that they wish they did.
The question for political leaders is whether to do anything to make that possible. Senator Obama and the Democrats support the Employee Free Choice Act, which makes it easier for workers who want union representation to get it, and harder for employers to browbeat their workers out of seeking representation. Republicans, with a few exceptions, appear content to let unions continue their slide toward irrelevance, and to leave workers to their solitary fate within the labor market. (See NYTimes article.)
Disagreement over minimum labor standards is less voluble, but only because one side is largely silent. A recent GAO report finding lax enforcement of wage and hour laws provoked calls for action from the Democrats, and silence from Republicans. Evidence of widespread employer evasion of employee rights and payroll taxes through misclassification of employees as “independent contractors” led Senator Obama, joined by several Democratic co-sponsors, to propose a legislative fix. Republicans remain silent.
The ideological divide here is familiar. But there is a common thread in these debates over labor policy that ought to create some common ground: Both employees’ right to join a union and their right to decent labor standards are being undermined by employers that break the law, sometimes brazenly. Many employers illegally threaten and intimidate workers who seek union representation, risking little more than a legal slap on the wrist long after the union drive’s defeat. For some employers, compelling employees to work off the clock, or even doctoring time sheets to reduce payroll costs, has become business as usual, as Steve Greenhouse shows in his new book, The Big Squeeze.
When scofflaw employers get away with violating workers’ legal rights, they undermine the ability of workers to secure a decent life for themselves and their families, and they undercut and demoralize responsible employers.
The Democrats and Republicans have often diverged over the wisdom of expanding protections for workers. But enforcing the laws that are already on the books ought to be a goal that unites the parties. Unfortunately, when it comes to the law that protects employee rights, that seems not to be the case.
About the Author: Cynthia Estlund is the Catherine A. Rein Professor at the NYU School of Law. Recent work chronicles the crisis of workplace governance – the decline of collective bargaining and the failings of both regulation and litigation – and charts a potential path forward. Her book Working Together: How Workplace Bonds Strengthen a Diverse Democracy (Oxford U. Press 2003) argues that the workplace is both comparatively integrated and intensely cooperative and social, and explores the implications for democratic theory and for the law of the workplace. Other writings focus on freedom of speech and procedural fairness at work; affirmative action; and the significance of property rights in labor law.
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