Happy Labor Day

I posted a blog about Labor Day three years ago, so before I started this particular entry, I reread it to see the particulars of that post and to decide the direction of this one.


That post revolved around the fact that, due to the prevalence of service industry jobs in America today, so many more people are working on Labor Day that in years past. 


Of course, nothing has changed since then in terms of more people working on Labor Day.  In fact, the trend is getting worse with more employers opening their stores on other "national" holidays, i.e July 4th, Thanksgiving and Christmas. 


Still, there is good news.  After peaking in October 2008 at 10%, unemployment has dropped to about 6.2% as of July, according to the Bureau of labor Statistics.  So, in theory, as the availability of labor begins to equalize with the open or newly created jobs, pay rates should start to increase as employers will find it harder to keep good employees who may now find better paying jobs, and/or find new employees for new positions.  Also, a possible consequence of the health exchanges will be that some people will no longer have to stay at poorly paying or unchallenging jobs, as they are less tied to their employer for reasonably priced health care insurance.  We may see an increase in new start up companies, as well as an increase in those deciding to pursue income from non-traditional jobs, as I discussed in a recent post about work pyramids. 


Unfortunately, the bad news is that many employers, especially corporations, will first move their jobs to states with lower standards of living, or countries with very low salary expectations and little or no environmental and work force regulations which protect their employees.  Taken as a whole, it seems that the continued state of working Americas living in poverty may continue for some time.


And that is bad news for all of us.


As long as the American consumer, those people who do two-thirds of the buying of goods and services, continues to struggle from one payday to the next, our economy can't possibly recover fully.  As long as the benefits of what marginal economic growth there is stays in the hands of the few at the top, we will continue to see stops and starts in GDP growth. 


Which brings us to the hot topic of late, raising the minimum wage.


I did some brief reading about the effects of raising the minimum wage in terms of potential job loss.  Many economists believe that low pay jobs will be the most at risk should minimum wages increase.  Makes sense, since it is those very jobs which pay the least.  Others believe that such job loss will be matched by an increase in spending money for those at the bottom of the pay scales, which could result in a demand for some goods and services (more job openings) and perhaps even a reduction in government assistance for those making more money (lower government expenditures).  Still others believe that any increase in wages, if not resulting in job loss, will automatically be passed along to the rest of us as consumers thereby causing prices to rise and negating any increase in pay. 


Talk about the circle of life.


For me, it is worth the risk to increase minimum wages, gradually, so that the market can accommodate the increase.  I like the idea of an increased minimum wage, in stages of 75 cents per year for four years to reach the $10.25 mark, by the year 2018.  The key though is to tie continued minimum wage hikes, after that, to a standard that does not need future legislation.  Cost of living would be good.  Increase in CEO pay might be better.  If the market can "bear" CEO pay to increase by some estimates up to 700% in the past 35 years, compared to 10-20% for the average worker, then I imagine that the smart men and women that run our biggest companies can figure out a way to increase worker pay similarly without causing job loss.  Or perhaps, just increasing CEO pay at the same rate as average worker pay will be sufficient to raise all of our salaries without adding to inflation or job loss.  Better yet, perhaps CEO's and those at the top of the pay scale, entertainers, sports stars, etc, those making over $5 million a year, could live on that money in ensuing years and take no more pay raises for a bit, instead passing all that money that would be given to them anyway to those people who do the actual work in America. 


Can you imagine?  All those hypocrites in Hollywood, on Wall Street and in Washington DC, putting their money where their mouths are and sharing their fortune with their fellow working class Americans.  (See the story, The Change which I wrote a few years ago and can be found on this blog and in my e-book on Amazon.com)


Oops sorry, I digress.


Anyway, happy Labor Day.  For those of you who had the day off, good for you.  Perhaps, rather than assuming all the Wa-Wa's and grocery stores and shopping malls will be open for you next year, you can make a New Years resolution to NOT shop on national holidays in 2015.  Perhaps then, all American workers will actually have off on these holidays.  And, while you are at it, make it known that everyone should get paid to not work.  Seems like the least we can do for the American workforce on Labor Day.