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Our Views: Challenging times for workers this Labor Day weekend

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August 31, 2013

This Labor Day weekend, workers everywhere face mixed messages.

Last week, the state reported its unemployment rate fell from 7.0 to 6.8 percent from June to July. The higher Janesville-Rock County rate fell more sharply, from 8.5 percent to 7.9 percent. That’s good news. Realize, however, that real joblessness here and nationwide is much higher if you consider part-time workers and those who left the work force.

On Thursday, fast-food and retail workers in Milwaukee and Madison joined throngs in cities across the country demanding a minimum wage increase from $7.25 to $15 an hour. The demonstrations came after months of similar actions organized by unions.

That same day, the federal government reported the U.S. economy grew at a 2.5 percent annual rate from April through June, much faster than an earlier estimate. That boosts hopes for workers across the pay scale. The government also said people filing for unemployment the previous week fell to 331,000, fewest in five years.

These are troubling times for unions, what with membership at historical lows. Today, 93 percent of private-sector workers toil without representation. Meanwhile, income inequality is rising toward record levels, according to the Congressional Budget Office. That disparity is expected to grow until 2035. Earnings for workers at the median will decline while those at the high end rise. Unions see organizing workers in low-wage industries as their best chance to add members and reduce the growth of that income gap.

The Affordable Care Act isn’t helping employment. Uncertainty over Obamacare is forcing many companies to limit hiring or hire part-timers. Some small businesses are trying to avoid the insurance mandate by keeping full-time staffs below 50.

Workers calling for a higher minimum wage should likewise consider potential unintended consequences. Pete Hanson of the Wisconsin Restaurant Association points to a survey that showed 77 percent of restaurants nationwide either raised prices or shed jobs after a 2007 hike in the minimum wage.

Price pressure discourages customers and can force restaurants to close and cost even more jobs. Hanson argues that his industry’s entry-level workers earn pay matching their experience and skills and that few are raising families on that wage. He says 70 percent of those earning the minimum are younger than 25 and 46 percent are teens. He cites statistics that say 85 percent of those earning the minimum are students, young people without kids or the second or third wage earners in their families. Average household income of a minimum-wage earner, he says, is more than $62,000.

In today’s Gazette, Marcia Nelesen offers workers hope. While manufacturing employed 16,000 workers in Rock County in 2002 and the recession halved that number, things are looking up. Don’t expect a return to those heady days, but UW-Whitewater economics professor Russ Kashian believes Rock County could get a couple thousand back.

Factories competing against low-wage foreign companies, however, must keep reducing waste and costs and automate with technology. That means workers need skills in science, technology, engineering, math and teamwork to find jobs, Bob Borremans of the Southwest Wisconsin Workforce Development Board told Nelesen.

Perhaps the key for people still looking at years or decades of work comes in the words of Rebekah Kowalski of ManpowerGroup.

“Economic cycles are getting tighter and tighter, and jobs that have been around forever are disappearing,” she said Aug. 22 in a speech at Beloit’s Business Education Summit. “The future will include jobs that we can’t even imagine today.

“That highlights the importance of lifelong learning and development. Individuals have to be greedy learners.”



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