Happy Labor Day American workers!
According to the U.S. Department of Labor, Labor Day is "a creation of the labor movement and is dedicated to the social and economic achievement 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."
Following the individual ratification of a "Labor Day" holiday by select individual states beginning in 1887, the holiday became federally recognized by all U.S. territories in 1894. That may be the history behind Labor Day, but here are 10 facts and statistics that will give you a better feel for the state of the American workforce today.
1. 157,065,000 civilian workers are in the labor force
A lot of focus is currently being placed on baby boomers, who are retiring from the workforce in increasing numbers; but it can't be overlooked that, sans recessions, the American civilian labor force continues to expand. As of July, there were more than 157.1 million civilians in the workforce, up 3.9 million over the trailing four-year period.
2. Unemployment rate of 5.3% in July
The unemployment rate in the United States tends to move higher during recessions, and occasionally in the subsequent months following the end of a recession. The Great Recession of 2007-2009 was the worst this country has witnessed in some 70 years, and it pushed the unemployment rate as high as 10%.
However, since hitting a 10% unemployment rate in October 2009, the unemployment rate has been cut nearly in half, to 5.1% as of August. At 5.1%, the unemployment level is back within its normal long-term range (typically 4% to 6%), and also represents a seven-year low.
3. Underutilization rate of 11.3% between Q3 2014 and Q2 2015
The labor market appears pretty healthy from the perspective of more people having employment than at any time in the past seven years. But the top-line unemployment figure could be a bit deceiving.
The Bureau of Labor Statistics also reports what's known as a labor underutilization rate, which takes into account workers forced into part-time work who want full-time work, discouraged workers, and currently unemployed persons. The average underutilization rate across all 50 states between the third-quarter of 2014 and the second-quarter of 2015 is 11.3%, implying that there are still quite a few people either looking for work, or looking for work that's perhaps more commensurate with their experience, skills, or monetary needs.
4. Salary is the biggest driving force for workers
This might be about as shocking as the sky being blue, but a survey conducted by CareerBuilder in 2013 asked more than 3,900 full-time workers what factors are most important when it comes to job satisfaction and retention, and salary was, by far, the key factor. Having a company car, or personal office, occupied the bottom of the list, with 14% and 17% approval, respectively, while salary (88%), flexible schedule (59%), and a special title (55%) occupied the top-three spots.
5. The American worker's favorite business perk
Along those same lines, CareerBuilder also asked the same 3,900-plus full-time workers which employer perks likely would be most effective at improving employee retention. On-site day care and access to a private restroom found the bottom of the list, with 6% and 7% of the vote, respectively, while half-off Fridays absolutely crushed the second-place perk -- an on-site fitness center -- by a score of 40% to 20%.
The workers have spoken: Pay them well, and give them a half day on Friday in order to keep top talent (at least according to CareerBuilder).
6. Real wage growth has been anemic for 50 years
However, just because workers want beefy salaries and copious perks, it doesn't necessarily mean they're getting them. A Pew Research Center study that looked at wage growth data between 1964 and 2014 discovered that nominal wages -- i.e., what the average American is paid on an hourly basis -- rose by better than 700% during that 50-year span.
But once inflation is factored in, real wage growth during the last 50 years has increased by a paltry 7.8%. In the meantime, tuition costs for post-secondary schooling and medical costs have vastly outpaced the rate of inflation and wage growth.
7. The federal minimum wage hasn't budged since 2009
Also not helping workers is the fact that the federal minimum wage has been lagging. At $7.25 per hour, the federal minimum wage hasn't risen since 2009. In total, the federal minimum wage affects 3.3 million hourly workers, including tipped workers, and this figure doesn't include minimum-wage workers in other states that could make more than $7.25, but still earn their state's minimum wage. According to The Huffington Post, if minimum wage growth had kept pace with inflation and productivity growth since 1968, minimum-wage workers should be earning $26 per hour today.
8. An increase in employer-paid benefits is masking wage growth
It's worth pointing out that anemic wage growth isn't entirely the fault of employers. In fact, the American worker is getting a raise -- it's just the intangible type.
According to data from the Bureau of Economic Analysis that was published in USA Today a few years ago, employer-paid benefits, as a percentage of compensation, have been on the rise for more than a decade. Between 2007 and 2011, it rose by nearly 11%, with employer-paid benefits accounting for close to 20% of an employee's compensation in 2011. This means that the rising costs to cover your health insurance, or to contribute to your defined-benefit (pension), or defined-savings plan (401(k), for example), is the reason why the American worker is likely witnessing anemic wage growth.
9. Real median household income still isn't fully on the mend
With real wage growth stagnant, and intangible benefits eating into any chance of real wage growth, it's been difficult for the average American household to generate more income. Based on data from the St. Louis Federal Reserve, courtesy of the U.S. Census Bureau, real median household income -- i.e., income that's adjusted for the rate of inflation -- improved in 2013 for the first time since 2006.
However, the rate of improvement -- a boost of just 0.34% over 2012 -- is nothing to jump for joy over. Since peaking in 1999, the real median household income has dipped from nearly $57,000 to $51,939 in 2013.
10. Employee engagement is just 31.5%
Finally, a little fewer than a third of American workers (31.5%), per a Gallup survey in May, are considered "engaged" in the workplace. By definition, an engaged worker is "involved in, enthusiastic about and committed to their work." This is a critical figure, because actively engaged workers can be a critical component to improved productivity, innovation, and profitability over the long run.
Interestingly enough, though, the rate of "actively disengaged" employees tied an all-time low in May, at 16.5%. Gallup has only been conducting these measurements since 2011, but the implication would be that American workers have rather ho-hum views of their jobs at the moment, but would like to see some degree of tangible income growth to move into the "engaged" category.
Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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