Reflections on Labor Day 2023

Labor Day has become the “unofficial” end of Summer and the rush towards a hectic year end.  Designated as a Federal holiday by President Grover Cleveland in 1894 the first Monday in September has been set aside as a day to celebrate the social and economic achievements of workers. 

At that time, however, the conditions for many workers were dire: 12-hour days and 7-day work weeks were common, conditions in mines and factories were extremely dangerous, and children, sometimes as young as 5 or 6, toiled in mills, factories, and sweatshops.  In fact, it wasn’t until 1938 that the Fair Labor Standards Act created the concept of a minimum wage, limited the work week, and dramatically restricted child labor.

The nation’s early labor movement allowed for a significant shift away from the harsh working conditions and practices that characterized 19th century life and thankfully the issues facing workers today are objectively less dire. However, the spirit of the holiday should not be forgotten, as our modern workplace presents its own novel challenges that require thoughtful reflection.

Emerging Issues in the Workplace:

 ·       Employee burnout (post-pandemic): In 2021, a Harvard Business Review Article reported from a 2020-2021 survey that “An overwhelming 84% of respondents reported at least one workplace factor that negatively impacted their mental health. Younger workers and members of underrepresented groups were affected even more severely. When looking across all respondents, the most common factor was emotionally draining (e.g., stressful, overwhelming, boring, or monotonous) work, which also worsened since the pandemic. This was closely followed by work-life balance.” However, more employers are providing support and addressing the issue. In 2022, AHIP (which represents health insurers) reported that over 180M insureds have access to mental health benefits. The growth in mental-telehealth services have made it more convenient and accessible for those seeking care, on their own terms.

 ·       Labor shortages: In keeping with the theme above, there are already signs of weakness in certain industries.  Axios reported on 8/27/23 that “labor shortages are plaguing high-stakes industries like law enforcement, healthcare and aviation”, pointing to the recent report in the New York Times on near-misses at our nation’s airports due to the lack of a sufficient number of air traffic controllers as an example. Newly reopened schools have had challenges bringing in students due to a shortage of bus drivers.  The Association of Medical Colleges has been warning of impending shortages in providers and nurses have been retiring/dropping out of the workforce at a rapid rate. Further, one of the battleground issues in the Hollywood writers and actors strike that continues as of this writing are the implications of GenAI and its potential to replace these and other jobs. It is also likely that the shortage has a significant impact on those who remain in the workforce, a contributing cause to some of the burnout noted above, as there are less team members to pitch in.

 ·       Hybrid work: The pandemic led to an explosion in work from home routines.  Some employers have continued to support these arrangements in order to avoid even further shrinkage in the roster of their employees. However, the trend is changing.  Fortune reported in May of this year that 72% of employers have return-to-work requirements. For workers, there are benefits that offset a resumption of pre-Covid routines, especially in “apprentice” type roles, such as in services industries like finance, law and accounting. The opportunity to be mentored, learn and interact with more senior team members is harder in the virtual world so we can expect more pressure on remote work.

 ·       Inflation and the risk of an economic downturn: The Fed has raised interest rates to their highest level in 22 years.  The stated purpose is to tamp down inflation with the corresponding effect that costs to businesses will increase, the number of people hired will decrease, and wages will decrease (as opposed to increasing to meet inflationary pressures). Higher rates have also meant that consumers will find it harder to finance a new home, auto, or other big-ticket purchases – and reduced demand in these areas also have a ripple effect in the job market.  If there is a silver lining, it appears that the Fed has been able to navigate to a soft landing, with reduced inflation and low rates of unemployment.  More to come on this front as Fed Chair, Jerome Powell noted this past week.

One might ask, “why celebrate Labor Day?” when considering all these challenges.  My response is to look back to the history of the holiday itself.  It was over 40 years after the establishment of Labor Day that an eight-hour workday was codified into Federal Law.  It will not take as long to reach conclusions on some of the thorny topics above – our world moves much more quickly today.  It took an unprecedented two months for ChatGPT to reach 100M users after its public introduction.  Take time on this holiday to consider your priorities; discuss them with colleagues; engage with your employer as well.  Collectively, there is much we can accomplish.

Have a great holiday!