Hello, folks, Buster, your greying old hound dog here again. I felt that I needed to take a week off from trying to comprehend our terribly important and wickedly weird Financial Sector.
In a couple of days we will be celebrating Labor Day. This holiday, as you are surely aware, means a day off for many workers and lots of back-yard barbecues, weekend jaunts to the woods or beaches for that last summer blast, and, of course, shopping. While many of us will be enjoying a few days away from work, quite a few people will be working longer hours for lousy pay in the retail industry which just happens to be our largest source of employment these days, and a whole bunch of people will still not be able to find jobs after long periods of unemployment. DOES ANYONE SEE ANYTHING WRONG WITH THIS PICTURE?
At the moment, Ms. Janet Yellen is busy fending off the “hawks” in her Federal Reserve System. The “hawks” at the Fed aren’t the same blokes advocating our jumping into the Syrian mess and/or piling back into Iraq and Afghanistan with both booted feet, using up some more of that surplus equipment that the Military/Industrial Complex (M/IC) feverishly wants to unload. No, no, “hawks” and “doves” at the Fed are a much more civilized sort. The “hawks” merely feel that we have gotten enough “slack” out of the job market, meaning that folks who have employable skills and who want to work have jobs, and the Fed can stop trying to stimulate the economy and be on the look-out for that dreaded ogre, inflation. The “doves,” on the other hand, feel unemployment is still too high, and, hence, the Fed should continue their “quantitative easing,” which means keeping interest rates at ridiculously low levels.
Well, old pappy and I happen to agree with the “hawks” on raising interest rates, but not for the same reason. In our opinion, the low rates are punishing savers and artificially pumping up the stock markets for the potential of another nice crash! They are also providing cheap borrowing to big business which is not using the easy money to hire workers here in the good old U.S.ofA. Actually, the Fed’s efforts at job creation have been questionable, but are the only tool our unimaginative Pols can come up with. We are way too broke to use Fiscal Policy to help expand the economy, even if the no-compromise political parties were to consent. So, we still have a lot of people out of work or working at lousy jobs.
Ok, back to Labor Day – what did it used to mean? Well, just a little history. You see, back when our good old country was still only about one hundred years old, as a people, we honored work as a worthwhile endeavor. In the later part of the 19th Century, a number of cities began celebrating workers with picnics and parades such as the New York City parade in Union Square in 1882. Then, states got into the act as Oregon designated a Labor Day in 1887. Finally, the good old Federal govamint climbed on board declaring in 1894 that the first Monday in September should henceforth be known and celebrated as our National Labor Day. This initial Congressional recognition was unfortunately done almost apologetically after the Pullman strike where 30 workers were killed by federal troops sent by President Grover Cleveland to stop the strikers from obstructing railway trains. The strike began in Pullman, a “company town” near Chicago, where workers’ wages were reduced due to a deep economic downturn, but rents for the company’s houses and other costs in the company town were not lowered. The strike became a nationwide boycott against all trains carrying a Pullman car. Interestingly, according to Wikipedia, a Methodist minister in Billings, Montana, took up the cause of the strikers saying that President Cleveland and his party leaders were, “the pliant tools of the ‘codfish’ monied aristocracy who seek to dominate this country.” SOUND FAMILIAR? Pap and I recommend you google “Pullman Strike” on Wikipedia — a very interesting story with lots of side effects!
Anywho, legislation for the Labor Day holiday was pushed through Congress and signed by President Cleveland just six days after the strike ended! The current Department of Labor website describes Labor Day as “a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.” Nice words, but alas, all but forgotten in our modern day “consumer” society!
Unfortunately, our legions of astute consumers are dwindling in numbers due to the massive shift in economic gains going overwhelmingly to a minute portion of the populace. Bear with us for a moment for a just a tad more hysterical stuff about Labor. Seems it wasn’t paid very well before the advent of unions. In the late 19th Century, trade unions of skilled workers such as tailors, bakers, roofers, carpenters, etc., began forming, and then in the early 20th Century workers in less skilled jobs in factories began organizing. The high point of union membership was probably in the 1950’s and 1960’s, and their presence definitely had a positive effect on wages and working conditions. Unfortunately, as the labor unions became larger and more powerful, corruption wormed its way into their leadership and excesses in their demands on employers began causing a backlash. Aint it a shame that when good things get too big they wind up bad?
Old Henry Ford shocked the industrial world, such as it was in those days, in 1914 when he began paying his workers $5/day, about twice the average factory wage rate at the time. Apparently, he made such a drastic move in order to stabilize his workforce and was very successful in increasing the productivity in his factories. A rather famous side effect (folklore claimed that Ford increased his workers’ wages to enable them to buy his cars) may indeed have begun the dubious popular trait of consumerism which plagues us in the present day. At any rate, Dear Old Henry (who incidentally hated unions) and the growth of unions were instrumental in establishing the thriving middle class in our good old U.S. of A.
Then along came make believe cowboy Ron Reagan, whose administration was the most anti-union of all time, and the decline of unions was ignited. Some folk probably believe Reagan’s dislike of unions may have originated when he got little respect for his B-movie career from his film actor pals, but that belief would be pure speculation. Anyway, union memberships declined precipitously in recent years from a high of around 35% (in private industry) to less than 7% today. Public sector unions now stand around 36%. Unfortunately, currently neither private or public sector unionization is reputed to add very much to productivity and hence is not embraced by employers or most workers.
Thus, we arrive at another celebration of Labor Day at a period when very little of economic gains are flowing to workers, and the “middle class,” despite promises of help from Pols of all stripes, is shrinking and struggling. How will we acknowledge the contributions of workers to the public good this year? Why, of course, we’ll follow the sage advice of one of our recent Presidents and go shopping!