Labor Day celebrates workers — but not everyone’s winning

  • Despite historically low unemployment around the U.S., millions of Americans aren’t benefiting.
  • Those faring less well include people with only a high school degree, middle-skill workers in manufacturing and African-Americans.
  • Still, recent survey data show that most workers are happier with their jobs and pay than in previous years.

Labor Day was created by the labor movement over a century ago to mark the contributions of the American worker. And by a number of measures, the nation’s 160 million workers have much to celebrate, with unemployment at a half-century low and jobs in ample supply.

But the benefits aren’t being enjoyed by everyone. Indeed, a decade after the Great Recession, the labor market has become a story about the haves and the have-nots. Workers at the top of the pile — from corporate executives to engineers and other high-paid specialists, often with tech or business skills — are reaping outsized benefits, such as juicy pay hikes and high incomes. 

The situation is considerably less rosy for workers without college degrees, who can likely find a job but who may struggle to find full-time work that assures them a middle-class lifestyle. In recent years, wage gains also have been disappointing for the typical worker, falling far short of what economists believe should be the norm given the historically low unemployment rate. 

“The labor market hasn’t reached full employment yet, and there are still workers re-entering the workforce without being coaxed in by large wage increases,” said Daniel Zhao, senior economist at employment website Glassdoor. 

The best jobs in America for career advancement

He added, “Despite low unemployment, there’s a wide range of structural factors that may be holding down wage growth, like increasing corporate consolidation and the diminishing power of unions.”

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In other words, workers have less bargaining power than they held in previous decades. Partly, that’s due to a decades-long slump in union membership, which hit a record low last year. In 2018, participation in a union fell to 10.5% of workers, compared with a peak of almost 40% in the late 1950s. 

Who’s winning?

Americans with college degrees. Highly educated workers have fared best, according to a July analysis of wages by the Congressional Budget Office. Workers with a college degree have enjoyed a 9.3% increase in inflation-adjusted wages from 1979 to 2018, compared with a 24.4% inflation-adjusted plunge for those with only a high school degree. 

Workers with STEM jobs. Jobs for workers with skills in science, technology, engineering and math have grown much faster than non-STEM jobs over the past decade, at 24% compared with 4%, a U.S. Department of Commerce report found in 2017. Wages in the science and tech fields are also accelerating, with STEM workers earning 29% more than non-STEM workers. In 2010, that gap stood at 26%.  

Women workers. Median wages for women grew almost 26% from 1979 to 2018 (adjusted for inflation), the CBO found. By comparison, median wages for male workers declined 5.1%. A big caveat: Although women are earning more and closing the gender wage gap, they still earn less than their male counterparts. Women earned about 85 cents for every $1 earned by men in 2018, Pew Research noted.

Who’s losing?

Workers with only high school degrees. As noted above, workers with only a high school degree have seen their inflation-adjusted wages fall more than 20% since 1979. That’s making it harder for blue-collar workers to maintain their foothold in the middle class. 

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Middle-skill workers in manufacturing and clerical jobs. These workers are among the high-school-educated employees who have seen labor market losses due to outsourcing and automation. Clerical workers and manufacturing workers are among those who have been hard-hit by the phenomenon. “This has limited the opportunities for workers without a college degree to move up the economic ladder,” Zhao said. 

Black workers. Even though the unemployment rate for black Americans has declined since the end of the recession, African-Americans are twice as likely to be unemployed than white workers, according to the Economic Policy Institute. Black workers are also more likely to be underemployed —meaning they are working in jobs that don’t take advantage of their skills — than white workers, EPI said. 

How do workers view their jobs? 

Despite the uneven labor market, most workers are happier with their jobs and pay than in previous years, according to a recent survey from the Conference Board. Fifty-four percent of workers said they’re satisfied with their jobs, an increase of 3 percentage points from a year earlier and the second-biggest increase in the survey’s 32-year history. 

The new face of labor

And even if wage growth isn’t what it should be, it’s still a good time for workers to look for new opportunities.

“Right now it’s a job-seeker’s market, and workers have more agency over where they work and when they seek out opportunities, which gives them more confidence to take risks, find new jobs better aligned with their preferences, and negotiate for better pay and benefits,” Zhao said. “When the economy and job market do eventually slow down, workers can’t be as choosy.”

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