Why we Celebrate Labor Day

I have been a long time fan of Labor Day, but it used to bring me a hollow feeling in my gut too. As a young man, I knew that as soon a Labor Day came, summer was ultimately over. School would be starting the next day and it was not my favorite thing to do.
As I got older and starting working for a living it was just another holiday and three day weekend I could enjoy with my friends and family. I never gave it much thought, until now. What is Labor Day and why do we celebrate it? Does it serve any purpose?
Labor Day exists because we as people have traditionally put money above our fellow man. Consider this, children around the age of 5 and 6 were working in mills across our country for less than a living wage. Men and women were expected to work 12 hour days, 7 days a week for substandard wages. Factory workers were performing tasks that were extremely dangerous and without any safety equipment.
These men and women would start to come together and form unions to protect themselves and others from harsh working conditions. They also were at great risk of persecution from the police and the business owners. One such example took place in Chicago in 1886. It was called the Haymarket Riots and due to a labor protest rally near Chicago’s Haymarket Square turned into a riot after an unidentified person threw a bomb at police. Eight people reportedly died as a result of the violence that day. And despite any evidence against them, eight labor activists were convicted in connection with the bombing.
This and many other labor events soon after, set the stage for the Federal government to enact the national holiday called, Labor Day. Grover Cleveland signed this legislation on June 28th, 1894.
As I look at the details of what it took for our government leaders to just recognize that children shouldn't be working in mills or anywhere else and that adults should work an 8 hour day with weekends off it made me wonder why this was such a problem.
As I reflect back on the past and look at where we are today as a country I get a little uncomfortable. I don't know of many people who work just 40 hour work weeks and I know they are working weekends because of the ease in which they can remotely work online.
I also look at the flat wage curve compared to inflation and I am startled. Today’s real average wage (that is, the wage after accounting for inflation) has nearly the same purchasing power it did 40 years ago. And the wage gains that have been made are mostly going to the highest-paid tier of workers anyway.
That means that your money is still worth what it was in 1980 but your buying power is in 2020. I'll give you an easy example based on you buying a car in 1980.
Say you want to buy a Honda Accord in 1980 and a fully loaded Accord EX is $8,500. That same car today is $33,500. So the car got more technology and better fuel economy but the price rose by $25,000.
Your buying power is maybe 1% more in 2020 then it was in 1980 and you have to cover an additional $25,000 to purchase the same car. Now you can also look at the fact that a 36-month loan was considered a long term loan and today you can take out an 84-month loan to buy that car.  My vote is to help balance the wage gap and inflation and we won't have to make poor barrowing decisions. 

My point here is, enjoy your Labor Day celebration but don't forget it took the average Joe and Joesphine to motivate Congress over a hundred years ago to passing basic safety laws, better water purity laws, and better working condition laws. And from where I'm sitting we may need to revisit the fair wage act again. 


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