Labor Day

"The government consists of a gang of men exactly like you and me. They have, taking one with another, no special talent for the business of government; they have only a talent for getting and holding office. Their principal device to that end is to search out groups who pant and pine for something they can't get and to promise to give it to them." — American writer H.L. Mencken (1880-1956)

Labor Day began over 100 years. To appreciate it, one needs to know the history preceding it.

At the time the United States was founded, most jobs were agricultural or in trades, such as blacksmiths, cobblers, bakers, upholsterers, etc. Then the Industrial Revolution began with the harnessing of water and steam power, leading to the creation of factories which could mass produce items inexpensively. Most factories were located in the Northern States.

In early United States history, there was no Income Tax, as the Federal Government was funded primarily from:

Excise Taxes on items like salt, tobacco, liquor; and

Tariff Taxes on imports making them more expensive, so people would buy goods produced in American factories.

The problem was that the Tariff Taxes that helped the North, hurt the South, as the South had no factories to protect. At one point, nearly 90% of the Federal Budget was from Tariff Taxes collected at Southern Ports, fueling the animosity which led up to the Civil War.

After the Civil War, the North passed more Tariff Taxes which allowed factories to grow enormous.

Inventions and advances in manufacturing made more and more goods available to the masses of people at cheaper and cheaper prices, resulting in the fastest increase in the standard of living and per capita income for common men and women in world history.

New ways of making stronger steel led to the building of bridges, buildings, steamboats, and mining machinery. Railroads now could take people safely and inexpensively across the entire nation opening up unprecedented mobility and opportunity. Immigrants arriving in America could get jobs working in factories.

George Pullman founded a Pullman Railroad Sleeping Car Company in Illinois just outside of Chicago. He saw that workers needed a place to live, so he built them houses in a safe little village around the factory. Their rent was deducted from their paychecks and they were paid in company script.

There were company owned grocery stores. It was thought to be a utopian workers' community and worked well for over a decade. Then something happened. In 1893, there was a nationwide financial panic and orders for railroad sleeping cars declined.

George Pullman had to lay off hundreds of employees, and make cuts in wages to the rest, though the rent and groceries stayed the same price. Employees walked out, demanding lower rents and higher pay.

Growing discontent provided a seedbed for Karl Marx's theory of class struggle and Communist redistribution of wealth.

A young worker named Eugene V. Debs led a strike of workers, and railroad workers across the nation boycotted trains carrying Pullman cars. There was rioting, pillaging, and burning of railroad cars. It became a national issue when mail trains were interrupted.

Democrat President Grover Cleveland declared the strike a federal crime and deployed 12,000 troops to break the strike. More violence erupted, and two men were killed.

In 1882, Matthew Maguire, a machinist, first proposed the holiday while serving as secretary of the CLU (Central Labor Union) of New York. Others argue that it was first proposed by Peter J. McGuire of the American Federation of Labor in May 1882, after witnessing the annual labor festival held in Toronto, Canada.

Oregon was the first state to make it a holiday in 1887. By the time it became a federal holiday in 1894, thirty states officially celebrated Labor Day. Following the deaths of a number of workers at the hands of the U.S. military and U.S. Marshals during the Pullman Strike, the United States Congress unanimously voted to approve rush legislation that made Labor Day a national holiday; President Grover Cleveland signed it into law a mere six days after the end of the strike. The September date originally chosen by the CLU of New York and observed by many of the nation's trade unions for the past several years was selected rather than the more widespread International Workers' Day because Cleveland was concerned that observance of the latter would be associated with the nascent Communist, Syndicalist and Anarchist movements that, though distinct from one another, had rallied to commemorate the Haymarket Affair in International Workers' Day. All U.S. states, the District of Columbia, and the territories have made it a statutory holiday.

It was an election year, and Grover Cleveland thought it would help his re-election if he appeased the workers, so he pushed through a National Labor Day. He chose the first Monday in September, rather than May 1, as he did not want it to be in coordination with the Communist "International Workers Day.

Eugene Debs went to prison and Cleveland lost the election, but Labor Day remained a national holiday.

Unions successfully advocated the 8 hour day, the 40 hour work week, minimum wages, safer working conditions, and more benefits for workers. With these unprecedented improvements came a consequence: "out-sourcing."

After World War II America helped rebuild Germany and Japan. And a global economy emerged. With newer factories and cheaper labor, foreign countries could produce items for less, whereas in America costs continued to increase with:

• Higher wages;
• Increased taxes;
• Expensive lawsuits;
• Burdensome government regulations;
• Greater environmental restrictions; and
• Crony capitalism, where government favors particular companies which support a political agenda, leaving other companies at a financial disadvantage.

These cost increases resulted in American made goods being more expensive as compared to foreign made goods.

As people bought less American made products, American factories shut down and jobs disappeared.

In 1950, about 50 percent of workers were union members, but today it has shrunk to around 7.6 percent in the private sector. But the power and influence of the public sector and teachers unions has been growing since the 1970’s and today the number of public sector and teacher union members far surpass those of the counterparts in the private sector.

America's increasingly uncertain economic future is weakening its international influence. Alexander Solzhenitsyn, who spent 11 years in Communist prisons and labor camps, warned in Washington, D.C., on June 30, 1975:

"I would like to call upon America to be more careful with its trust and prevent those, because of short-sightedness and still others out of self-interest, from falsely using the struggle for peace and for social justice to lead you down a false road. Because they are trying to weaken you; they are trying to disarm your strong and magnificent country in the face of this fearful threat. I call upon you: ordinary working men of America. Do not let yourselves become weak."

To bring jobs back to America, the answer is as simple as making it more profitable for factories to be located here than there.

Today’s labor movement is a far cry from the days of Matthew Maguire and Eugene V. Debs. It is no longer concerned with workers in the private sector. According to the U.S. Bureau of Labor Statistics in 2011, the union membership rate--the percent of wage and salary workers who were members of a union — was 11.8 percent, essentially unchanged from 11.9 percent in 2010 of wage and salary workers belonging to unions, at 14.8 million, also showed little movement over the year. In 1983, the first year for which comparable union data are available, the union membership rate was 20.1 percent and there were 17.7 million union workers.

In 2011, 7.6 million employees in the public sector belonged to a union, compared with 7.2 million union workers in the private sector. The union membership rate for public-sector workers (37.0 percent) was substantially higher than the rate for private-sector workers (6.9 percent). Within the public sector, local government workers had the highest union membership rate, 43.2 percent. This group includes workers in heavily unionized occupations, such as teachers, police officers, and firefighters. Private-sector industries with high unionization rates included transportation and utilities (21.1 percent) and construction (14.0 percent), while low unionization rates occurred in agriculture and related industries (1.4 percent) and in financial activities (1.6 percent).

Some of the highlights from the 2011 data are:

• Public-sector workers had a union membership rate (37.0 percent) more than five times higher than that of private-sector workers (6.9 percent). To
• Workers in education, training, and library occupations had the highest unionization rate, at 36.8 percent, while the lowest rate occurred in sales and related occupations (3.0 percent). (See table )
• Black workers were more likely to be union members than were white, Asian, or Hispanic workers. (See table)
• Among states, New York continued to have the highest union membership rate (24.1 percent) and North Carolina again had the lowest rate (2.9 percent). (See table)

In 2011, 7.6 million employees in the public sector belonged to a union, compared with 7.2 million union workers in the private sector. The union membership rate for public-sector workers (37.0 percent) was substantially higher than the rate for private-sector workers (6.9 percent). Within the public sector, local government workers had the highest union membership rate, 43.2 percent. This group includes workers in heavily unionized occupations, such as teachers, police officers, and firefighters. Private-sector industries with high unionization rates included transportation and utilities (21.1 percent) and construction (14.0 percent), while low unionization rates occurred in agriculture and related industries (1.4 percent) and in financial activities (1.6 percent).

Among occupational groups, education, training, and library occupations (36.8 percent) and protective service occupations (34.5 percent) had the highest unionization rates in 2011. Sales and related occupations (3.0 percent) and farming, fishing, and forestry occupations (3.4 percent) had the lowest unionization rates.

When it comes to money collected from public sector union dues the Democrats are the largest recipients by far with the National Education Association ($6,800,167) and the American Federation of State, County, and Municipal Employees ($4,235,500) leading the pack.

Public employee unions represent workers at every level of government – federal, state and local. Since contract negotiations for these workers are dependent not on private corporations, but on the size of government budgets, this is the one segment of the labor movement that can actually contribute directly to the people with ultimate responsibility for its livelihood. While their giving pattern matches that of other unions (which overwhelmingly support Democrats), public sector unions also concentrate contributions on members of Congress from both parties who sit on committees that deal with federal budgets and agencies. (You can see more statistics on this by clicking here)

Union bosses have made such a big deal about being upset with the DNC’s pick of Charlotte, North Carolina for its convention (even going so far as having an August “shadow convention”) that, while they may be in the state for the Barack Obama nomination celebration, they’re making every effort to make it look like they’re absent. As noted above North Carolina is a “Right to Work State” with the lowest percentage of union membership (2.9 percent) in the nation.

Adding insult to injury, not only is North Carolina the least unionized state in the nation, the stadium where Barack Obama is giving his acceptance speech was built by entirely union-free labor.

The lack of union support (and money) at the convention is likely why the DNC is giving away free tickets to people from neighboring states to go and watch Obama’s acceptance speech on Thursday.

Although about a dozen of the building trade unions, along with Machinists’ union boss Tom Buffenbarger are boycotting (and some plan to protest) the Democrats’ celebration, other union bosses are attending the convention. However, they are taking fewer members and a much lower profile than past conventions. It should also be noted that the unions are upset over Obama’s cancelation of the construction of the Keystone XL pipeline, a project that would have created 20,000 union jobs.

Eight years ago, when John Kerry tried to defeat the incumbent George W. Bush, he accused Bush of leading a “jobless recovery.” When the economy started creating hundreds of thousands of jobs, Kerry and the Democrats then claimed that Bush was creating mostly “McJobs,” low-wage, non-union positions rather than higher-paying jobs for people with significant skills.

Today, the Obama administration keeps claiming to have added 4.3 million jobs by choosing to start from February 2010 rather than the start of the recovery in June 2009 or the passage of Barack Obama's stimulus package in February 2009. The Obama recovery in full has only added less than 65,000 jobs per month, far below the level needed to keep up with population growth (125K-150K per month), and the civilian population participation rate has fallen to a 30-year low this spring. A new study now shows that even those jobs that have been added are the “McJobs" that Kerry inaccurately accused Bush's recovery of generating. We're not even keeping up with population growth in this recovery. The average jobs added per month since January has been 83,286, according to the Bureau of Labor Statistics, still a long way from keeping up with population growth. That's not a recovery in jobs at all, which anyone looking at the participation rate (63.7%) would instantly recognize. The data shows that even the paltry job creation of the Obama recovery has done little to advance the economy. Businesses won't invest in job-creating activities that require more expensive labor until they can reliably calculate future costs, which in this regulatory and tax environment, they cannot do. That's why companies are sitting on their capital, and why we won't get anything but McJobs in significant numbers until those policies change.

You can see that there is a split in today’s labor movement. Unlike the 1950s when 50% of American Workers belonged to unions — the vast majority in the private sector, particularly in manufacturing and construction — today’s labor movement is much more focused on the public sector employee. Unlike the private sector unions where the health of the business economy influences the wages and benefits the public sector unions are bankrupting the United States with their wage demands. Pensions, health and welfare costs, and work rules. It is the American Taxpayer that bears the financial burden for their demands.