The BDN Editorial Board operates independently from the newsroom, and does not set policies or contribute to reporting or editing articles elsewhere in the newspaper or on bangordailynews.com.
We hate to be a downer, but there aren’t a lot of reasons to celebrate this Labor Day.
For one, although summer is not officially over, the summer vibe is waning. Kids are back in school, temperatures are dropping, and pumpkin spice is popping up on menus all over.
Second, life for working-class Americans isn’t all that rosy right now.
Wages have been stagnant for decades, even while productivity has sharply risen. These two used to be more closely correlated, but the link has weakened as corporate profits and shareholder value have risen while real wages have not.
As a result, workers’ share of the American pie, known as the “labor share of income,” has shrunk. In fact, it’s at the lowest level in 75 years, according to research by the Federal Reserve Bank of New York. Labor share of income is a measure of how much of the country’s economic output is returned to workers in the form of salaries.
This year, American workers received 54% of national income, compared to 65% in 1947. This means more money is flowing to corporations and their investors. One reason for this is tax law changes that have been favorable to executives and shareholders. Declining union membership is also a factor.
“A lot of people look up after 10 years of working and just feel like they have not gained as much ground as they want to. More and more stuff just seems to be out of their grasp, because their wages have not kept up,” Josh Bivens, chief economist at the Economic Policy Institute, told CBS News about the new data.
Working-class Americans are also not keeping up as the costs of living increase. For far too many Americans, housing prices, childcare costs and medical expenses outstrip their earnings.
Median home prices in Maine have more than doubled in the last decade, the third largest jump in the country, by one measure.
Affording rent can be difficult, too. A recent analysis by the National Low Income Housing Coalition found that a renter in Maine would need to earn more than $67,000 a year to afford the average rent for a two-bedroom unit in the state. That’s well above the median per capita income in Maine.
In addition, basic expenses such as gas and grocery prices have risen significantly, and may go even higher next year, because of Trump administration trade policies, the war in Iran and related shipping disruptions, climate change impacts and pest outbreaks.
Again these increases have come at a time when wages are not rising, and the gap between average Americans and the wealthy is growing.
President Donald Trump and others point to the ever-rising stock market as evidence that the American economy is doing fine. But rising share prices are not an indication of Americans’ ability to pay the rising cost of living. Yes, many Americans are invested in the stock market through their 401(k), and a larger retirement nest egg is certainly a good thing. But, it does not cover the mortgage payment or the monthly childcare bill or the rising annual premium for health insurance.
So, enjoy the waning days of summer, and maybe grill a few hamburgers and hot dogs this Labor Day weekend. But know that life is no picnic for American workers.
