Labor Day Celebrating the American Worker

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Americans celebrate Labor Day with backyard barbeques, blockbuster sales and bumper-to-bumper traffic as vacationers rush to get home on the day that’s become the unofficial last day of the summer season.

Originating in the height of the Industrial Revolution, Labor Day was born out of a need for workplace reform. In 1894 Congress passed a law making Labor Day a national holiday in response to the civil unrest following the Pullman Strike that year. They set aside the first Monday in September to mark the occasion and the rest, as they say, is history.

Workers then vs. workers now

According to the 1880 Census, the average worker made about $347 per year (roughly $8,070 in today’s dollars if adjusted for inflation). Over 20 percent of the workforce was involved in some form of labor, either as a farm worker or laborer. Popular professions that year included carpenters, dressmakers/tailors, school teachers, blacksmiths, miners and cotton mill workers. The average workday was approximately 10 hours (though it often went longer) and most workers toiled six days per week. Health insurance and paid time off were nonexistent.

Today, it’s a different story:

  • According to the Social Security Administration, the average wage in the U.S. is approximately $44,888 (five times more than what those in the 1880s made, even when adjusted for inflation)
  • Rather than working 60 hours per week, U.S. workers now put in on average 47 hours
  • Many workers without access to employer-sponsored healthcare have access to affordable healthcare as a result of the Affordable Care Act passed in 2010
  • According to the Bureau of Labor Statistics, 90 percent of full-time workers in the private industry enjoy paid holidays and 69 percent have access to retirement plan options

Of course, nothing’s perfect

While the Great Recession of 2009 certainly made things difficult for millions of American workers, things are on the upswing. In 2010 the national unemployment rate hit nearly ten percent. Today, it’s nearly half of that.

Jobs are coming back to the U.S., too. According to Harold Sirkin of Forbes, the idea that the U.S. is loosing jobs to cheaper foreign markets just isn’t true. In fact, while some jobs continue to move offshore, more are moving back to the U.S., a trend referred to as "reshoring." Sirkin cites increased labor costs in China, the difficulty in maintaining long-distance supply chains, the abundance of low-cost energy in the U.S. and the "significantly higher productivity of the U.S. labor force" as some of the biggest factors driving the reshoring trend.

The return of "Made in America"

It’s not just high productivity that’s bringing jobs back to the U.S. Perception of value is playing a big role, too. According to Firkin, "even low-income consumers in China, India, South Africa and elsewhere are willing to pay a premium for goods carrying the 'Made in the USA' label."

Cheap energy is another factor bringing jobs in sectors such as manufacturing and engineering back to the shores of the U.S. A recent article in Fast Company suggests the boom in natural gas production will drive tremendous growth in the manufacturing sector: “The natural-gas industry will bring around three million new jobs directly to the United States by the end of this decade, which adds up to three percent to our GDP and trillions in additional tax revenue.” Many of these jobs will go to manufacturing, industrial and energy production industries.

Innovation is the new export

Finally, it’s America’s ability to innovate that will continue to create new industries and re-invigorate old ones.

Hush Mehta, executive director of EASi (a subsidiary of Aerotek) credits ongoing innovation in new product development and more favorable economic conditions as major contributors to the movement to bring more jobs back to the U.S.:

    "In an effort to revive the economy coming out of the recession and with the boom in new product development, there has been a huge re-shoring of U.S. manufacturing operations — helping to create jobs and new business opportunities. While smaller, finer parts may still come from emerging countries, shipping and logistics for large items has become a greater expense for companies. That, coupled with U.S. wage rates post-recession, companies are moving on-shore and gaining access to advanced technology and skilled workers that perform final assembly at a more efficient rate."

New technologies like 3D printing are re-defining the entire manufacturing industry, spurring tremendous growth. According to analyst firm Wohlers Associates, the 3D printing industry grew an amazing 35.2 percent in 2014 to become a $4.1 billion industry — and could grow to $20.2 billion by 2020.

Aerospace, another industry that many saw as in decline or stagnant, is being reinvigorated by the explosion in the unmanned aerial vehicle (AKA drone) industry. The drone industry could create at least 100,000 new jobs in the next decade.

The energy industry — often seen as one of the most conservative — is being transformed by new developments in "green technologies" such as solar power. Jobs in the solar industry sector are increasing at a rate of about 20 percent per year, with 174,000 workers currently employed by over 6,100 businesses.

Despite the bumps of the past few years, one thing seems pretty clear on this holiday: for the American worker, the future looks bright.