Labor Day in America

Today, Monday Sept 3rd, there is much commentary in the United States over the meaning of Labor Day.

I associate Labor Day with American Capitalism. As I remember, it was initiated to discourage American workers from celebrating May 1st, the day set aside by the Socialist International for honoring and elevating working men and women in the early phase of global capitalism.

The American political elite wanted no truck with socialism and, as a result of this political agenda, set aside a day for labor to be honored within a free market capitalism where individualism and rights of free association were regarded as correct socio-economic scripture.

Socialism is now discredited and Communism is dead. So May 1st seems to have become a superfluous holiday.

So too in many ways has "labor" day. "Labor" as a factor of production is becoming an historical artifact. Workers and employees will always be a part of product - but "labor" with its connotation of physical human efforts, sweat, and drudgery is less and less part of employment - especially highly paid employment.

Value in the free market increasingly goes to forms of capital - not physical power paid for as a commodity in hourly or daily units. Finance capital gets higher and higher returns. The rising share of national income in the United States held by the well-to-do is to a great extent a reflection of their participation in securities ownership and the rising return to securities over the last 40 years.

Reputation capital - brand equity - gets a good return.

Human capital - productive, education, specialized employees - gets more return than human labor power.

Management skills - human relations skills - bring more than assembly line or trade union work. White collar is more pervasive these days than blue collar.

Knowledge, invention, intellectual property rights - all get higher returns these days.

Manufacturing as a share of national income in the US is declining - not just because of outsourcing to low cost producers, but as a result of the information and computer chip revolution in human civilization. Just as agriculture in the US now absorbs a tiny fraction of the work force - about 2% I think - (once it was over 80% before the industrial age got going), manufacturing done under modern conditions takes in fewer and fewer workers. Each worker is more productive and can command higher wages, but the number of workers needed in shrinking.

In short, employees are moving from costs on the income statement to becoming an asset on the balance sheet.

In consequence, our entire way of thinking about workers and employees needs to change. If they are capital assets for society, then we need to ensure that they are properly "capitalized" - with life long education, good health care, with their own retirement savings accounts, with easy access to finance capital to start their own businesses. And, moreover, the wellbeing of our workers - those who have a large responsibility in making capitalism work - is important to us all.

Steve Young