Labor Day is a celebration of the American worker — the person whose productivity and skill made this country great. It is a distinctly American practice to celebrate workers in their own right for this reason in the fall, not in the context of socialism on May 1.
Today, the American workforce is evolving in a new direction, in large part thanks to workers’ ingenuity. The traditional employment relationship, though still dominant, has long been fraying at the edges due to increasing worker mobility between jobs. But today, it is under an especially intense assault from the gig economy. An estimated 36% of American workers participate in the gig economy for part or all of their income, and more than 90% say they are at least considering it.
President Joe Biden, through his so-called PRO Act, wants to kill the gig economy dead. He wants to make independent contract work illegal or at least prohibitively difficult, just as California’s state legislature did with its ruinous AB 5 legislation. Biden and other Democrats have as a goal to preserve an ossified, union-friendly version of the traditional employment system, in which big companies employ everyone and have adversarial relations with their workers. They see this as key to the survival of a moribund organized labor movement. Were he to succeed, it would be a death blow to economic dynamism, to say nothing of the flexible work schedule and environment that a growing number of workers have embraced by choice.
Democrats need to start thinking more of workers and less of union bosses, because the interests of the two are clearly diverging.
Here’s the reality: Despite having every possible advantage under the nation’s outdated federal laws governing union organizing, labor unions are utterly failing to make themselves relevant to the modern workforce. This is why their share of the overall workforce continues to shrink.
One of their major problems is that fair working conditions and labor standards are taken for granted and guaranteed by government. It made more sense to clamor for a union in 1922, when your workplace was appallingly filthy and dangerous; not so much in 2022, when thousands of government regulations govern safe and clean working conditions. Another problem they face is that workers increasingly value their independence over the steady security of a union job they work for 50 years. Biden and Democrats feel like they can stem the tide by robbing workers of their independence. They are barking up the wrong tree.
Does union membership still provide workers with some advantages? Yes, but there is far less to this idea than meets the eye. If the question is about pensions, most nonunion workers have 401(k) plans that can provide for their retirement. If it’s about fringe benefits, most nonunion jobs provide them now — and for the ones that don’t, insurance is available through Obamacare.
Union workers do still make slightly more in wages, but the nominal wage gap between private sector union and nonunion workers mostly vanishes when you account for union dues, for union workers being disproportionately older, and for their being concentrated in higher-cost jurisdictions such as California, New York, and New Jersey. It is not an accident, either, that more affordable areas correspond to states with right-to-work laws.
Labor Day is a celebration of workers. As workers’ needs evolve beyond forced unionization, it is time for the law to evolve as well. Congress should pass the Employee Rights Act and let workers make their own choices about what sort of organizations they want to belong to.