Labor Day 2021: This May Be the Best Year for Labor in a Generation

New dynamics are shaping the labor market, labor organizing and labor policies

Economists are scratching their heads furiously — why is there a labor shortage amidst high unemployment? Everywhere employers are posting “Help Wanted” signs but still face shortage of workers. Construction projects are stymied, retail shops are half-staffed and produce rots in the fields all because of a lack of workers. There is no fresh supply of “essential workers” who are surging into the job market.

The conservative view, that people don’t want to work and that the unemployment benefits are a disincentive, has been debunked by the evidence. An academic study analyzed the effect of cutting unemployment benefits (done in 26 states which are all but one led by Republican governors). On employment rates, the impact was negligible — only 7 of 8 people who were dropped from unemployment rolls actually gained jobs. But for households, the impact was harsh and tens of thousands faced struggles in paying rent and bills and buying food. Also, household spending dropped $2 billion in those states, causing damaging ripple effects.

Workers are voting by staying home. Lousy job conditions — low pay, dangerous work environments including the risk of COVID, mistreatment — are not attracting workers to the workplace. Further, with uncertainty over schooling for children, needed care for others in the household and the generalized risk of COVID, re-entering the public space entails, for many, more sacrifice and risk than it is worth.

The last six months of worker disillusionment with the job market shows a new source of power: the power of workers when they withdraw the services of their labor. It’s not accurate to call it a worker boycott or strike since it’s the cumulative effect of the individual decisions of millions of workers to hold back, but the “wisdom of the crowd” to eschew bad jobs is having an impact. Wages are going up (marginally), benefits are offered (nominally), and employers offer more flexibility in scheduling (somewhat).

Another growing form of worker power is the movement of worker centers. In towns and cities across the U.S., local worker committees and nonprofits have sprung up to defend the rights of low wage workers in exploitative jobs — construction, meatpacking, light manufacturing where unions don’t have a presence. Twenty years ago, the National Day Labor Organizing Network started the first worker center in Los Angeles among day laborers gathering outside of lumber yards and today their network includes 70 worker centers across the country. Worker centers can be found in each state and in each sector of the economy.

I joined a retrospective on the worker center movement this past week hosted by The American Prospect, Open Society Foundations (OSF), and the Ford Foundation. Worker centers have been one of the bright spots in defending the rights and raising the standards for the most exploited workers in this country and in setting the agenda for policy change. In a pre-read for the symposium, Ford’s Sarita Gupta and OSF’s Laine Romero-Alston reflected:

"Particularly from 2010 to 2020, [worker centers] grew tremendously in scope, scale, sophistication, and ambition. What was originally a movement focused largely on the rights of immigrant workers in major coastal cities deepened its reach and context-specific orientation to make gains in the South, Southwest, and Midwest, as well as in suburban and rural areas.

"They’ve been instrumental in raising the minimum wage, enforcing wage theft ordinances, winning domestic-worker bills of rights and paid leave policies, and securing protections for immigrant workers. …They have advised on President Biden’s executive actions and other efforts, taking advantage of the political openings created by the strongest pro-worker administration in decades."

Another not-so-new dynamic is that the locus of policy advocacy is shifting from the national to the states. Changing the laws and regulations which governs labor in this country is desperately needed. Federal minimum wage remains stuck at $7.25 and the rights of workers to organize and bargain collectively is eroding. Further, the absence of policies for paid sick and family leave, the lack of protections for gig workers and the inflexibility of job schedules shows how little policy change has kept pace with societal change. Yet, labor policy change, like much other needed legislation in Congress, is hostage to the filibuster in the Senate. So, while Rome fiddles, the states act — under pressure from worker advocates.

A new report by Oxfam, Best States to Work Index, ranks 52 jurisdictions (50 states plus Washington, DC and Puerto Rico) according to wage policies, safety in the workplace, and rights to organize. The best states like Oregon, New York, Massachusetts, and California are pulling ahead and the worst states (Alabama, Mississippi, Georgia, and lastly, North Carolina) are falling further behind.

The Cinderella in this story is my home state of Virginia which jumped from absolute bottom in 2020 to 23rd place in 2021 (and 15th place in worker protections). Raising the minimum wage to $15 per hour over the next five years and first-in-the-nation COVID protections for workers made all the difference. Advocates like the Virginia Interfaith Policy Center have pushed for these changes and call for continued pressure to hold the Governor and the Assembly to their commitments.

This Labor Day, thankfully, feels more hopeful for workers across the land. Tectonic shifts start imperceptibly before re-aligning the world.