What's Your Labor Worth? For Most of Us, Less Than It Was in 2000

A confused man, holding a pen, sitting amidst piles of binders
Historically, Labor Day is a day for celebrating America's workers -- a factor that influenced everything from its founding to the date on which it was placed. Coming roughly midway between Independence Day and Thanksgiving, it was intended to give workers a respite to break up the long holiday-free stretch in the latter half of the year.

(Of course, since Labor Day is a national holiday, the makes the first Monday in September a prime date for merchants hoping to attract customers -- a factor that doesn't work out all that well for the estimated 11 percent of American workers employed in retail sales.)

So, as we honor America's workers, we're taking a peek at some of the factors, good and bad, affecting American labor.

First the good news: Unemployment is currently at 7.4 percent, almost 10 percent lower than it was last August (8.1 percent) and 22 percent lower than it was three years ago (when the rate was 9.5 percent). In fact, unemployment is currently the lowest that it's been since December 2008, almost at the beginning of the Great Recession.

And that's not all. Underemployment -- the percentage of people who are unemployed, the jobless who have quit looking, those who are temping, and those working part-time when they'd rather have full-time jobs -- has dropped to 14.3 percent, almost a 15 percent decrease from its 2010 high. In fact, the underemployment measure is at the lowest level since 2009.

But as we all know, it's not all upbeat news: While the unemployment and underemployment numbers have been sliding, the number of households living at or below the poverty line has been growing. Since 2007, it has increased by 20 percent. Currently, in fact, 15 percent of Americans are at or below the poverty threshold, and almost one in five fall below 125 percent of the poverty line.

At first glance, these two trends would seem contradictory. With unemployment and underemployment both falling, you'd expect the number of impoverished people would fall too. To add to the apparent paradox, U.S. GDP has also been growing: Since hitting its recession low in 2009, it has increased by over $1 trillion.

So why are there so many more poor Americans?

To a great extent, the answer lies in the types of jobs that Americans are getting and the degree to which they're competing for them. From 2000 to 2007, wages for the average worker increased by just 2.6 percent (adjusted for inflation), despite the fact that the average worker's productivity went up by 16 percent.
Then, in 2007, the Great Recession ripped the bottom out of the job market; in the ensuing years, when laid-off Americans returned to the work force, they often did so for significantly less pay, although they were still tasked with producing on the same level they'd achieved before. The upshot is that, today, the bottom 60 percent of workers -- basically, any households making under $65,000 -- are working for less than they made in 2000.

The solution if well-known -- if still a bit controversial. The minimum wage, which is currently about $3 per hour lower (in inflation-adjusted dollars) than it was 45 years ago, needs to be boosted. Raising it to a living wage -- about $10.50 in most areas -- would reduce dependency on social welfare programs, pour money into the economy, and spur retail activity. Perhaps most importantly, it would give America's laborers something to really celebrate.

Bruce Watson is DailyFinance's Savings Editor. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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Only ones who are getting richer are the ceo's and presidents and owners. Workers arent getting the benefits, and are getting stiffed with obamacare, of which companies will be cutting hours so as not to pay. So thanks to the rich, they're getting richer, and the rest of us have to pay for health, only free country to do so. Lobbiests are doing their jobs!

September 02 2013 at 4:28 AM Report abuse rate up rate down Reply

DUH! The reason that only 32% of teenagers had a job this summer is because so many adults have taken their jobs. We have a very low qualified work force. In fact, I'm not sure the average college graduate, with their social degree, even knows how to make a hamberger! Anybody that thinks this country is NOT in decline is living in OZ.

September 01 2013 at 11:00 PM Report abuse +3 rate up rate down Reply

I'm not sure that if they raised the minimum wage to $10.50/hour that people could actually live on it. I make $9.44/hour at a job that pays me twice a month. My hours average between 7 AM to about 3/3:30 PM and after taxes, SS, the mandatory retirement pull out and health insurance I bring home about $258 per check. Rent alone costs more per month than what I make! A second job I had was cut to make way for jobs that had even less hours with no benefits and lower wages so I am now scrambling to find another second job. By the way.....My primary job is in education! Yes, I work in an elementary school and we have not had any raises or cost of living increases for 7 years now. More work load, less hours and less pay.

September 01 2013 at 10:46 PM Report abuse +3 rate up rate down Reply

Obama says, " We should protect the innocent Syrians. We should go to war. No, they may call me a war monger. We shouldn't go to war. Let's see.....eenie, meenie, miney, mo........OH NO
I can't say that...........

September 01 2013 at 10:21 PM Report abuse -6 rate up rate down Reply
1 reply to betty_brock's comment

Wow, light up another joint..............

September 01 2013 at 11:15 PM Report abuse +5 rate up rate down Reply

If there's a holiday for workin folk, how come we welfare slugs don't have a holiday of our own?

It just doesn't seem right to celebrate the people who support us slugs, but ave no celebration of those of us who leach off the workers.

This is just one more example of how tea baggers discriminate against us slugs.

September 01 2013 at 9:56 PM Report abuse -4 rate up rate down Reply
1 reply to dumbsomey's comment

The could share the liberal's "special" day...............APRIL FOOLS DAY!!!!!!!!

September 01 2013 at 10:16 PM Report abuse -3 rate up rate down Reply

Hey, President Wishy Washy, make a decision for once. You appear weak to the world.

September 01 2013 at 9:22 PM Report abuse -3 rate up rate down Reply
1 reply to betty_brock's comment

We Americans know you are weak but we try to keep it under our hats.

September 01 2013 at 9:24 PM Report abuse -5 rate up rate down Reply
1 reply to betty_brock's comment

I smell Evan.

September 01 2013 at 9:25 PM Report abuse -5 rate up rate down

The rich get richer while the poor get poorer. Conservatives are perfectly happy with that

September 01 2013 at 7:41 PM Report abuse +3 rate up rate down Reply
1 reply to josephautomotive's comment

My labor was worth nothing in 2000. Today, my labor is worth nothing.

I don't know any better other than to be perfectly happy with that.

September 01 2013 at 7:46 PM Report abuse +1 rate up rate down Reply
1 reply to dumbsomey's comment

One thing slouches like us can't disguise is our worthlessness.

That's the thing about being a slouch.

September 01 2013 at 9:33 PM Report abuse -2 rate up rate down

I wake, poor and broke,
Take bus, go see employment folk.
Nice man treat me good in there,
Say I need to see welfare.

Welfare say, "You come here no more,
We send cash straight to your door."
Welfare checks, they make me wealthy,
Medicaid it keep me healthy!

By and by, I got plenty money,
Thanks to you, American dummy.

September 01 2013 at 7:36 PM Report abuse rate up rate down Reply

$65,000 where do I go. I have a 4 year degree and my last raise brought me up to $45,200.

September 01 2013 at 7:12 PM Report abuse rate up rate down Reply

If you believe there is a need for millions of these medical assistants then you probably got stuck like all those computer techs and office assistants the for profits schools pumped out.

September 01 2013 at 6:24 PM Report abuse +2 rate up rate down Reply