You likely are receiving this issue just before Labor Day 2015. To be timely, let’s look at the purpose of the holiday.
For the retail and service sectors of the boating industry, it is likely known as a hoped for “fireworks weekend” — for the bottom line. For some, it is only seen as the end of the season and time to make plans for cooler weather and less business. For the manufacturing side, it may mean a long weekend with an extra day off (perhaps with pay). It is unlikely the extra day off will apply to retail firms; everyone will be needed — hopefully. But where did this specially designated holiday get its origin?
Labor Day, the first Monday in September, is a creation of the labor movement (of the past) and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and wellbeing of our country.
— U.S. Department of Labor
According to the Labor Department, the nation gave increasing emphasis to Labor Day throughout the 20th century. The first Labor Day was celebrated on Tuesday, Sept. 5, 1882, in New York, in accordance with the plans of the Central Labor Union. The first governmental recognition came through municipal ordinances passed during 1885; Oregon passed the first state bill that became law on Feb. 21, 1887. During that year four more states — Colorado, Massachusetts, New Jersey and New York — created the Labor Day holiday by legislative enactment. By the end of the decade Connecticut, Nebraska and Pennsylvania had followed suit. By 1894, 23 other states had adopted the holiday, and on June 28 of that year Congress passed an act making the first Monday in September of each year a legal holiday in the District of Columbia and the territories.
The form the observance of Labor Day should take was outlined in the first proposal of the holiday — a street parade to exhibit to the public “the strength and esprit de corps of the trade and labor organizations” of the community, followed by a festival for the recreation and amusement of the workers and their families. This became the pattern for the celebrations of Labor Day, especially in larger cities, but even in smaller communities, where it became entrenched as a family day. Industrial firms and retail businesses often would sponsor floats in parades, and a cordial (almost cooperative) atmosphere was created.
In the 21st century the character of the Labor Day celebration has undergone changes, especially in large industrial centers where mass displays and huge parades have proved a problem. Labor Day addresses by union officials, industrialists, educators, clerics and government officials no longer are given wide coverage in the press. The decline of union membership (and the nature of work itself) has seen the associated decline in Labor Day celebrations. Consider what the Labor Department says today:
The vital force of labor adds materially to the highest standard of living and the greatest production the world has ever known and has brought us closer to the realization of our traditional ideals of economic and political democracy. It is appropriate, therefore, that the nation pay tribute on Labor Day to the creator of so much of the nation’s strength, freedom, and leadership — the American worker.
Even though the union movement has declined during the past 30 years (and the parades have virtually disappeared), there is no reason not to celebrate the role “workers” play in the business and professional life of the community. In previous columns I have noted the value of rewards and recognition. What could your company do to spearhead a rebirth of a Labor Day celebration in which you and other cooperating employers embrace the value of working people at every level?
Some ideas I have heard about: Large business firms and/or employer associations sponsor art contests in schools for drawings of “workers” to be displayed on billboards or on company bulletin boards and winners to be announced at a Labor Day event. Another city has poets prepare special poems for the recognition of labor in society. One difficulty today is the dividing line between labor and whatever. Many non-managers do not view themselves as “labor” — a condescending term? Your company could come up with a labor recognition program, using customer assessments of work done by a technician or sales volume contest winners — you name it.
In Europe and in Asia, the emphasis is more on the nature of work and workers’ value to society, and unions are less pragmatic in approach. This often is celebrated on May 1 as Workers Day or May Day. Celebrations are similar to those of the U.S. Labor Day. It is a joyous experience abroad.
As one looks at Labor Day issues, the current labor market demands some strategic thinking and strategy development at most companies, large and small. Consider these issues you will soon be facing:
Recruiting in a tighter labor market? Fewer people are applying for vacancies in most markets. How will you go about attracting new personnel for growth, as well as replacements? What are the attractive aspects of being your employee rather than that of a competitor or a totally different type of employer? What will you do when there are no qualified people identified in your labor market at your current pay?
Adjusting to an elevated minimum wage? Ready to pay that $15 minimum wage? What do you do if the fast food/food service trades raise their starting pay to $9 or $10 and above? Today is the time to start planning for that eventuality. If it does not happen immediately, it will in a few years. Workers at the margin are becoming less available and wages overall are inching upward. Low-paid workers usually will change jobs for no more than a buck an hour unless you are offering some valuable fringes in comparison. Be prepared with a strategy for coping with a changing job market.
Impact of raising the wage floor? Some firms have started raising the lowest-level pay on their scale and have encountered a new major issue. Most wage scales have a structure (formally or by accident) so that if the floor is raised, all of the higher-paid positions feel squeezed. Larger firms have long ago found that adjustments to the entire scale will be needed. The usual costs of an increase in entry-level pay will be significantly greater than just the entryway increases. Failing to adjust the scale will create frustration and anger among your seasoned staff and could cause unwanted consequences.
Wage increases require strategic planning and are not simple mathematical calculations. No matter how secretively you seek to make pay adjustments, within 24 hours the secret is wide open. Nevertheless, management must consider strategically what it will do as changes in the labor markets continue to have ramifications for the company’s success.
In closing, let me suggest two action items that are quite interconnected.
The senior management team should spend some quality time talking about “labor” at all levels in your company. What do you do to celebrate the contributions that all employees have a hand in? Maybe you have a type of profit-sharing plan; maybe you have a company picnic; maybe you have a commission plan that you believe offers appreciation. Stop for a minute and ask the “labor” what appreciation they would find most valuable. Perhaps use a series of focus groups or a workplace survey, using a local consultant or college professor in that effort. Research shows us that recognition of work well done and valuable to the company can evoke improved work performance. What do you think would be appropriate recognition for “labor day?”
The senior management team should consider a series of “what if” questions and have appropriate answers in place for when the “what if” comes to fruition. What if the labor market tightens? What if the increased minimum wage of competitors in the labor market affects your ability to recruit the quality of labor you need? What if you raise the starting pay of a group of employees; what will other employees say and expect? Is it not better to consider these problems before they become hot button issues? Good luck.
Jerald F. Robinson, Ph.D., is professor emeritus, international management, at the Pamplin College of Virginia Tech in Blacksburg, Va. He can be reached at (540) 449-5870 or by e-mail: JFR@vt.edu.
This article originally appeared in the September 2015 issue.