A Few Observations as the 2018 Labor Day Holiday Approaches: Lemonade Day Serves as Catalyst for Developing Workers and Business Owners of the Future
By Steven Gordon, Lemonade Day National President
“Labor Day, the first Monday in September, is a creation of the labor movement 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 well-being of our country….The first Labor Day holiday was celebrated on Tuesday, September 5, 1882, in New York City, in accordance with the plans of the Central Labor Union. The Central Labor Union held its second Labor Day holiday just a year later, on September 5, 1883. In 1884, the first Monday in September was selected as the holiday, as originally proposed, and the Central Labor Union urged similar organizations in other cities to follow the example of New York and celebrate a "workingmen's holiday" on that date. The idea spread with the growth of labor organizations, and in 1885 Labor Day was celebrated in many industrial centers of the country.
The form that the observance and celebration 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. Speeches by prominent men and women were introduced later, as more emphasis was placed upon the economic and civic significance of the holiday. Still later, by a resolution of the American Federation of Labor convention of 1909, the Sunday preceding Labor Day was adopted as Labor Sunday and dedicated to the spiritual and educational aspects of the labor movement.”
(Source of photo and information: United States Department of Labor, https://www.dol.gov/general/laborday/history)
Preparing to produce today’s blog for Lemonade Day was especially fruitful and enlightening. First and foremost, getting a refresher on the history of the Labor Day holiday in the United States was a great exercise in advance of Labor Day 2018 which will be celebrated on Monday, Sept. 3. Secondly, a few colleagues and I were discussing yesterday, business and employment topics such as the U.S. shortage of qualified workers, the serious need for skilled workers in specific engineering and technical fields, and the reality that small business continues to drive the U.S. economy (according to the U.S. Small Business Administration, there are 30.2 million small businesses in the U.S. which employ 58.9 million people, or 47.5 percent of the private work force, https://www.sba.gov/blog/creating-jobs-investing-small-business).
What surfaced in this process was access to excellent experience and insights in the form of an amazing source on labor and employment by the name of Steve Drexel. Based in the San Francisco Bay area and a former resident of Houston, Steve is the president and chief executive officer of Cornerstone Staffing Solutions, Inc. His credentials are unique and impressive: Steve is an economist; he served as a member of the Business Research Advisory Council to the U.S. Bureau of Labor Statistics and served as chairman of the Employment and Unemployment Statistics Committee; and he has more than 30 years of concentrated experience in business services, staffing and human capital solutions. (See Steve’s bio here: https://www.cornerstone-staffing.com/light-industrial-recruitment/management-bios/)
I am sharing some highlights from several recent articles and commentaries about the U.S. employment situation that Steve has written that I found fascinating. I hope you will as well.
“Economically, times are interesting right now. Employment growth is at a record long 93 consecutive months and the unemployment rate, at around 4.0 percent, hovers near a 17-year low. The Bureau of Labor Statistics shows staffing is growing slightly better than 3.0 percent annually, about twice as fast as employment in general. If staffing employment is growing at say 3.3 percent and average hourly earnings are growing at about 2.7 percent, sales would be growing at approximately 6.0 percent. Most staffing firms would be happy growing at faster than a 6.0 percent clip during good times. The good news is that even during a slower-growth employment period, our dynamic economy generates many underlying opportunities. For instance, recently more than five million employees have separated from their positions and there are over six million job openings,” Steve wrote for an article published in SI Review.
In his “Observations Regarding the July 2018 Employment Situation”, Drexel shares this snapshot of the current employment situation:
The unemployment rate decreased by one tenth of a point to 3.9 percent. This was within the reasonably narrow range that unemployment has occupied for nine months. The unemployment rate is quite low by any historical standard but the notion that it is not moving south at a fast clip suggests that the labor force is still expanding at an accommodating rate allowing employment to grow in order to continue to support the expanding economy. A really reassuring note in terms of the sustainability of the expansion.
Wage Rate Influencers
Average hourly earnings during July indicated that wages grew by 2.7 percent on a year-over-year basis, unchanged compared to June and recent months. This remains surprising because during previous economic expansions, when the unemployment rate was below 4.0 percent, growth in wage rates exceeded 4.0 percent. It is unfortunate that workers have not seen stronger wage gains during this long expansion and painful to observe that this month the rate of general price inflation wiped out any real income gains for the average worker. On the other hand, it is often higher wage inflation that sets off a series of events that leads to a recession. There is some consolation in that, in exchange for lower wage growth, employment has grown for a record number of months and unemployment across many dimensions is at or near a 17-year low.
The causes of weak wage growth include the observation that productivity growth during this recovery has been unusually weak. Historically, improvements in wages, as well as the overall standard of living, are highly dependent on productivity growth. A second explanation for the relatively weak wage growth involves demographic changes. As the large generation of baby boomers, at relatively high pay rates, retire and are replaced by newer, less experienced, entrants into the labor force, this depresses the growth in the average wage. Further, the baby boomers still represent a large segment of the workforce and at this point in their careers, they tend to trade off pay increases for things they care more about like job security, time-based flexibility as well as other quality of life factors. A third factor suppressing wage growth is the effect of global competition which theorizes that work shifts to lower wage locations when domestic wages grow at a faster rate than our global challengers.
https://www.cornerstone-staffing.com/2018/08/07/july-2018-employment-situation/
About Lemonade Day
Founded in Houston in 2007 by Michael and Lisa Holthouse, Lemonade Day is a non-profit organization dedicated to teaching every child across North America the business and financial skills that are the key ingredients of entrepreneurship. By learning these skills early in life, children will be better prepared to be successful, financially healthy adults. Through our fun, hands-on program, kids K-5 are empowered to start their very own business—a lemonade stand—and experience the feeling of earning real money, using 100% of their profit to spend, save and share based on their own goals.
Lemonade Day is hosted in 72 territories in North America and is growing. Over the past 11 years, we have served more than 1 million kids in our youth entrepreneur programs. Within the next five years, Lemonade Day leaders estimate that 250,000 mentors and millions more kids will be hosting lemonade stands in North America and on other continents throughout the world. Please visit www.lemonadeday.org to learn more.
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By Steven Gordon, Lemonade Day National President
“Labor Day, the first Monday in September, is a creation of the labor movement 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 well-being of our country….The first Labor Day holiday was celebrated on Tuesday, September 5, 1882, in New York City, in accordance with the plans of the Central Labor Union. The Central Labor Union held its second Labor Day holiday just a year later, on September 5, 1883. In 1884, the first Monday in September was selected as the holiday, as originally proposed, and the Central Labor Union urged similar organizations in other cities to follow the example of New York and celebrate a "workingmen's holiday" on that date. The idea spread with the growth of labor organizations, and in 1885 Labor Day was celebrated in many industrial centers of the country.
The form that the observance and celebration 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. Speeches by prominent men and women were introduced later, as more emphasis was placed upon the economic and civic significance of the holiday. Still later, by a resolution of the American Federation of Labor convention of 1909, the Sunday preceding Labor Day was adopted as Labor Sunday and dedicated to the spiritual and educational aspects of the labor movement.”
(Source of photo and information: United States Department of Labor, https://www.dol.gov/general/laborday/history)
Preparing to produce today’s blog for Lemonade Day was especially fruitful and enlightening. First and foremost, getting a refresher on the history of the Labor Day holiday in the United States was a great exercise in advance of Labor Day 2018 which will be celebrated on Monday, Sept. 3. Secondly, a few colleagues and I were discussing yesterday, business and employment topics such as the U.S. shortage of qualified workers, the serious need for skilled workers in specific engineering and technical fields, and the reality that small business continues to drive the U.S. economy (according to the U.S. Small Business Administration, there are 30.2 million small businesses in the U.S. which employ 58.9 million people, or 47.5 percent of the private work force, https://www.sba.gov/blog/creating-jobs-investing-small-business).
What surfaced in this process was access to excellent experience and insights in the form of an amazing source on labor and employment by the name of Steve Drexel. Based in the San Francisco Bay area and a former resident of Houston, Steve is the president and chief executive officer of Cornerstone Staffing Solutions, Inc. His credentials are unique and impressive: Steve is an economist; he served as a member of the Business Research Advisory Council to the U.S. Bureau of Labor Statistics and served as chairman of the Employment and Unemployment Statistics Committee; and he has more than 30 years of concentrated experience in business services, staffing and human capital solutions. (See Steve’s bio here: https://www.cornerstone-staffing.com/light-industrial-recruitment/management-bios/)
I am sharing some highlights from several recent articles and commentaries about the U.S. employment situation that Steve has written that I found fascinating. I hope you will as well.
“Economically, times are interesting right now. Employment growth is at a record long 93 consecutive months and the unemployment rate, at around 4.0 percent, hovers near a 17-year low. The Bureau of Labor Statistics shows staffing is growing slightly better than 3.0 percent annually, about twice as fast as employment in general. If staffing employment is growing at say 3.3 percent and average hourly earnings are growing at about 2.7 percent, sales would be growing at approximately 6.0 percent. Most staffing firms would be happy growing at faster than a 6.0 percent clip during good times. The good news is that even during a slower-growth employment period, our dynamic economy generates many underlying opportunities. For instance, recently more than five million employees have separated from their positions and there are over six million job openings,” Steve wrote for an article published in SI Review.
In his “Observations Regarding the July 2018 Employment Situation”, Drexel shares this snapshot of the current employment situation:
The unemployment rate decreased by one tenth of a point to 3.9 percent. This was within the reasonably narrow range that unemployment has occupied for nine months. The unemployment rate is quite low by any historical standard but the notion that it is not moving south at a fast clip suggests that the labor force is still expanding at an accommodating rate allowing employment to grow in order to continue to support the expanding economy. A really reassuring note in terms of the sustainability of the expansion.
Wage Rate Influencers
Average hourly earnings during July indicated that wages grew by 2.7 percent on a year-over-year basis, unchanged compared to June and recent months. This remains surprising because during previous economic expansions, when the unemployment rate was below 4.0 percent, growth in wage rates exceeded 4.0 percent. It is unfortunate that workers have not seen stronger wage gains during this long expansion and painful to observe that this month the rate of general price inflation wiped out any real income gains for the average worker. On the other hand, it is often higher wage inflation that sets off a series of events that leads to a recession. There is some consolation in that, in exchange for lower wage growth, employment has grown for a record number of months and unemployment across many dimensions is at or near a 17-year low.
The causes of weak wage growth include the observation that productivity growth during this recovery has been unusually weak. Historically, improvements in wages, as well as the overall standard of living, are highly dependent on productivity growth. A second explanation for the relatively weak wage growth involves demographic changes. As the large generation of baby boomers, at relatively high pay rates, retire and are replaced by newer, less experienced, entrants into the labor force, this depresses the growth in the average wage. Further, the baby boomers still represent a large segment of the workforce and at this point in their careers, they tend to trade off pay increases for things they care more about like job security, time-based flexibility as well as other quality of life factors. A third factor suppressing wage growth is the effect of global competition which theorizes that work shifts to lower wage locations when domestic wages grow at a faster rate than our global challengers.
https://www.cornerstone-staffing.com/2018/08/07/july-2018-employment-situation/
About Lemonade Day
Founded in Houston in 2007 by Michael and Lisa Holthouse, Lemonade Day is a non-profit organization dedicated to teaching every child across North America the business and financial skills that are the key ingredients of entrepreneurship. By learning these skills early in life, children will be better prepared to be successful, financially healthy adults. Through our fun, hands-on program, kids K-5 are empowered to start their very own business—a lemonade stand—and experience the feeling of earning real money, using 100% of their profit to spend, save and share based on their own goals.
Lemonade Day is hosted in 72 territories in North America and is growing. Over the past 11 years, we have served more than 1 million kids in our youth entrepreneur programs. Within the next five years, Lemonade Day leaders estimate that 250,000 mentors and millions more kids will be hosting lemonade stands in North America and on other continents throughout the world. Please visit www.lemonadeday.org to learn more.
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