A Happy Labor Day—Really

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(Photo: AP/Lynne Sladky)
Protesters, part of the national Fight for 15 movement, applaud in support of raising the minimum wage to $15 an hour at a church in Miami in April.

Harold Meyerson. The American Prospect

Labor Day is upon us, marking an end to summertime, when the livin’ is easy and Americans take their well-earned vacations. Well, some Americans. About 56 percent of American workers took weeklong vacations last summer—a new low-point in a steady decline that began in early 1980s, when more than 80 percent took weeklong vacations.

That depressing bit of news is of a piece, alas, with everything else we know about the declining fortunes of American workers. As the Economic Policy Institute documented in report released Wednesday, productivity rose by 72.2 percent and median hourly compensation (that’s wages plus benefits) by just 8.7 percent between 1973 and 2014. As the National Employment Law Project reported in a study released the following day, real median hourly wages declined by 4 percent from 2009 to 2014.

If anything, numbers grow worse with each passing year. In the second quarter of this year, labor costs rose at their lowest rate since the early 1980s—a measly 0.2 percent, despite the economy’s steady growth and falling unemployment, which in a “normal” economy should lead to higher incomes. In the new normal, however, virtually nothing leads to higher incomes for employees—hence their longer hours and shorter, if any, vacations. Instead, the gains from their work accrue almost entirely to owners, stock players, and top executives.

And yet this Labor Day, for the first time since the 1970s, American workers are beginning to reclaim what by right should be theirs. Through actions in city halls and statehouses, through court decisions and labor board rulings, public officials, prompted by workers’ advocates, are finding ways to overcome many of the obstacles—outsourcing, franchising, stagnating minimum wages, union busting—that have created the new normal and with it, the shrinking of the middle class.

The public response to the “Fight for 15” campaign of fast-food and other low-wage workers has exceeded all expectations. Ordinances to raise the local minimum wage, which first popped up in liberal strongholds like San Francisco and Seattle, have in the past few weeks been enacted in St. Louis, Kansas City, and Birmingham, Alabama. A proposed ballot measure to raise the minimum wage to $15 by 2021 in California—home to one out of every eight American workers—commanded 68 percent support in a Field Poll last week.

Unions are polling better, too: In a mid-August Gallup Poll, they commanded a 58 percent approval rating, 66 percent among adults under 35. That’s radically at odds, of course, with the percentage of private-sector workers who actually belong to unions: just 6.6 percent. The chasm between the number who approve and the number who belong is the product of decades of union-smashing by employers, ranging from illegal firings of union activists to corporate restructurings that enable employers to claim their workers aren’t actually theirs.

In hotels across America, the workers who check you in and clean your rooms often come from temporary employment agencies, though there may be nothing temporary about their tenure on the job. In Tennessee and Mississippi, many of the workers on the assembly lines in Nissan factories are also labeled temps, though they’ve been there as long and do the same work, for less pay, as the Nissan employees right next to them. FedEx insists the men and women who drive its trucks are independent contractors, though they can’t drive for anyone else. At Walmart’s warehouses, the tens of thousands of workers who unload the goods from China and ship them to stores near and far are formally employed by a bewildering array of staffing agencies. Many of these workers—permatemps, if you will—hold down the same job for many years, though their employer of record may have shifted repeatedly.

When these workers and the millions like them are paid at lower rates than workers doing the same jobs for parent companies, or when they receive no benefits, or when they’re paid less than the legal minimum or injured on the job, their parent companies have been able to deny any legal responsibility. When these workers have sought to form a union, they’ve had no legal right even to knock on their parent employer’s door. “The current laws,” says one veteran union organizer, “don’t let workers get to their puppet masters, whether they’re the companies whose goods are processed at the warehouses, or who employ the drivers at the ports.”

Now, that’s changing. Last week, the Obama-appointed majority on the National Labor Relations Board ruled that a local union representing the staffing-agency employees at Browning Ferris, a California waste-management company, could bargain with Browning Ferris itself: The parent company, they said, was really a joint employer. In Miller & Anderson, a case pending before the NLRB, that same majority might rule that a union can actually represent both outsourced workers and parent-company employees in the same unit.

The new joint-employer standard announced in Browning Ferris will help fast-food workers in their attempts to unionize chains like McDonald’s. I suspect it will spur even more immediate unionization efforts in the warehouse and hotel industries, and at permatemp-reliant manufacturers like Nissan.

The same “if it quacks like a duck, it’s a duck” standard that the NLRB has now proclaimed also infuses recent rulings against companies that mislabel their workers as independent contractors. California’s labor commissioner, Julie Su, has ruled repeatedly that the state’s port truckers, who carry imports from the harbors to the warehouses, are actually employees who’ve been illegally underpaid. Her rulings have prompted a number of companies to acknowledge the drivers are in fact theirs and to make back-pay settlements; in some cases, those drivers have elected to form unions and have won contracts. Also in California, just this Tuesday, a federal judge ruled that Uber drivers could file a class-action suit petitioning for reclassification as employees.

A different solution to the independent contractor scam may be forthcoming in Seattle, where, as The Washington Post’s Lydia DePillis has reported, the city council has before it a proposed ordinance that would permit the city’s personal transport drivers—the independent contractors who drive not just for Uber and Lyft, but for taxicab companies, too—to unionize without changing their status. The National Labor Relations Act specifically excludes independent contractors from the law’s coverage, in the same section that excludes public employees, agricultural, and domestic workers. The reasoning behind the Seattle proposal is that nothing in federal law prohibited states and localities from enacting their own laws granting bargaining rights to public employees and agricultural workers, and because many states and localities have done just that, they can do the same for independent contractors as well.

Will this new wave of rulings and ordinances spur more workers to attempt to unionize? Elizabeth Bunn, the AFL-CIO’s director of organizing, thinks it can. “Workers will overcome their fears,” she says. “The real problem has been their lack of belief they can win. Browning Ferris can now inform their calculus—it helps them get to the real decision-maker.”

This sea-change in the nation’s concern over economic inequality and the diminution of worker power—and in what may become the nation’s long overdue response to them—is the product of many efforts, but those of the fast-food workers and the union directing and funding their campaign, the Service Employees International Union, have clearly been the game-changer. SEIU President Mary Kay Henry, who mobilized her union behind her belief that it needed to expand its mission to changing the nation’s zeitgeist even if that meant forgoing some campaigns that might more quickly yield new members, has emerged as the gutsiest and most visionary union leader since John L. Lewis and Sidney Hillman founded the CIO. Credit is also due the new-model Teamsters, a cleaned-up union that is waging innovative campaigns on behalf of warehouse workers, truckers, and drivers.

Not surprisingly, the NLRB’s ruling in Browning Ferris upset inequality’s champions—among them, predictably, The Wall Street Journal’s editorialists, who complained not only of the ruling’s substance but also that the decision “ruin[ed] countless August vacations.” Just what you’d expect from an editorial board that either can’t or won’t see that “countless” Americans can’t afford to take vacations anymore.

Harold Meyerson is an Editor of the American Prospect and a Vice Chair of DSA.

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