Made with Real Bits of Panther: Labor Day

In 1894, railroad workers across the United States joined together to protest the Pullman company and the US government after their wages were slashed. Around 250,000 workers either slowed or stopped service entirely in many parts of the country. President Grover Cleveland's response was to send the army into these areas and violence ensued. Two years later, peaceful protests in Chicago caught national attention as workers fought for an eight hour work day (they ended up hurting their cause as one of the protesters threw a stick of dynamite at the police, killing seven). Fearful of mounting anger by the labor unions during the Gilded Age, Congress passed a law that designated the first Monday in September to be a national holiday celebrating the American worker. Hence, Labor Day. Over a century later, this hollow gesture serves as a microcosm for all that ails those employed in the United States.

The average American gets eight vacation days per year. Contrast that to a medieval peasant, who only had to work about half the year. Americans work harder than citizens in any other country. So what do we have to show for it?

We have more money than any other country in the world. This is a good thing right? Well, I don't need to tell you that digging deeper into these numbers shows a perverse reality.

If the arc of history has taught us anything, it is that the powerful will do anything they can to retain their power. Instead of ordering businesses to pay their workers livable wages in 1887, or establishing a set of workers rights, Congress did what they do best: a half-measure designed to temper the anger of the public while ensuring that the super rich didn't lose their economic standing. They carved out one day to "honor" workers while ensuring that they could still get screwed ten ways to Sunday the other 364 days of the year.

The Gilded Age was marked by gargantuan differences in lifestyle between labor and the people who sign their checks, while the government either turned a blind eye to this injustice or helped to exacerbate it. Sound familiar?

That's because we are in the midst of another Gilded Age; one where CEO's at big companies live like literal Kings and the people beneath them are treated as costs, not co-workers. This is a national emergency (one of about a bazillion that we refuse to address), and we must treat it as such. Mitt Romney may think that corporations are people, but they sure as hell aren't Americans. If they were, they would not fire their workers at the drop of a hat just for a small bump in quarter to quarter profits. We need to understand that while American companies have served as some of the greatest drivers of wealth the world has ever seen, they are not interested in driving the majority of the wealth towards anyone but their executives and shareholders. We need a national Bill of Rights for non-executive workers. So what would that look like?

First and foremost, we need to recognize that businesses in the private sector deserve a certain level of autonomy in running their operations, so things like guaranteed wages and price fixing are completely off the table. But at the same time, the chart below is beyond disturbing.

Simply put, your average US worker today has about the same level of purchasing power as an American in the late 1930's. About 70% of our economy is driven by consumption, so if we do not reverse this trend that began in the 1980's, America will cease to be the world's economic power. This is an indisputable fact.

So how do we fix this problem? Well we should start by reversing the trend that began in the 1980's where CEO's and executives are paid astronomical wages relative to those working for them. This has driven money out of the real economy and into hedge funds and offshore bank accounts.

The first part of this new Bill of Rights for non-executive labor will entail limiting CEO and other executive pay to a ratio of what they pay their average worker based on yearly revenues and industry averages. I'm not smart enough to figure out what the ratio should be, but it should not be the one that we have seen over the past thirty years.

Americans work harder than anyone else and the vast majority of the economic gains we generate are going to the upper 1% and 0.1%. The enforced ratio in the previous paragraph aims to solve part of that problem, but we still have a lot of work to do.

The United States is the only advanced country without a national vacation policy. Now that we live in an age where people can work from anywhere, this puts less importance on being in the office. The second act of this new workers Bill of Rights is to ensure a minimum of three weeks paid vacation time per year for everyone with a full time job. What is the point in generating wealth if you cannot enjoy it?

The third, and last part of this new Bill of Rights is to eliminate the traditional "golden parachute" or severance packages for executives and replace it with a fairer system tied closely to their performance. The modern model is simple: executives negotiate million dollar settlements in the event of their termination, regardless of how they performed on the job (for example, after basically driving AIG out of business, Martin Sullivan, their former CEO, was fired in 2008 with a $47 million severance package). Why should he get compensated for his failure when those working far beneath him are not?

Our current system incentivizes executives to focus solely on quarter to quarter profits for their shareholders, and if their short term actions result in long term harm, it doesn't matter because everyone gets paid. Well, except for the lower level workers. Their golden parachute consists of everything they can carry out of their office.

The Gilded Age began in the 1870's and continued into the 20th Century. It is remembered as a disdainful era in American history; one where the common man was treated as a modestly compensated slave. Labor laws have since been enacted to counter basic injustices, but what we have seen over the last thirty years is a philosophical return to policies that favor the 1% at the expense of the 99%.

Many who advocate the 99% vs the 1% argument say we must return to the halcyon days from the 1950's to the 1980's when America was fairer. I wouldn't go that far because in the post-WWII period, the highest tax bracket was around 90%, which should make every millionaire want to flee the country. We need to create a new social economic contract that ensures if you work full time, you will be able to pay for your basic needs. It also must equitably compensate those who create a lot of economic value relative to their actions and risks taken.

Many of those older than generation X and the millennials view the US as a land of opportunity where anyone can make it regardless of their skill set or where they came from. Well, because of the policies enacted and the executive conduct by those generations that came before us, this is the picture of the United States that has been painted for us younger generations and it isn't pretty. America has become the land of the super rich and the home of the shareholder.