The Important Parts You’re Not Likely To Read, Even in the Few That Actually Cover What Labor Is About.
Too much of what gets covered about labor is from a top-down view. It’s about the big corporations hailed as “job creators” and about states in a race to the bottom regarding corporate taxes, which is supposedly good for workers. Labor Day is a good time to look at the flip side.
We have this myth that our economy is dependent on the big players, the big companies, the big investors. The big players are a welcome, and sometimes efficient, part of the economy, but we are not dependent on them. Actually the opposite is true.
Wealth: It is created by the combination of someone pulling a business together, and the workers who do the work. The mountains of cash it takes to start a big operation would be nothing more than worthless paper, the raw materials would never be more than just that, the assembly line idle, if the sweat, work and labor of employees was not a partner in the deal.
Supply: Existing companies, especially large ones, can sometimes ramp up production of some needed good quickly. If they didn’t, though, small entrepreneurs would spring up to fill any unmet need. It can be a couple of brothers in San Bernadino starting one little burger joint that grows into MacDonalds. It can be a couple guys in a garage that grow into an Apple Computer because other computer companies were missing the small computer need. It can be a million individual construction contractors who literally build much of the nation, one house at a time
Capital: The money to start or expand businesses can come from a few big investors, or many small ones. Money loaned by banks comes from the many savers, big and small. Investments may come from a big player like Warren Buffett, or to a great extent from things like mutual funds and pension funds which pool the money of many small investors.
Demand: Rich consumers buy more, but they still only buy so much. To have a healthy economy it takes darn near everyone having the money to buy what they need to keep the economy going.
Labor: Despite technological advances and outsourcing, when the economy is doing well it takes darn near everyone who can work, to be working. And when there is an extended period of plenty of jobs we find they do. Creating a nation’s worth of sufficient wealth takes many, many hands.
Big corporations do often lead the way on advanced technology but how are they able to do that? A big corporation decides a department is needed to develop tech products. How does that wish become reality? By the hard and competent work of many administrators and engineers. How do the tech advances then happen? Each big advance is the result of many small advances, each discovered and developed by clever engineers or teams of engineers. As I’ve written in the past, Apple did not develop the iPhone. Engineers within Apple did. The many clever and diligent employees who labor in tech.
Labor takes all forms, from the carpenter and the office administrator, to the high level manager and even the CEO. We need them all doing what they’re good at. We’re all in this economy together. The labor of all can be honored on Labor Day. There is nothing biased against the CEO or the big investor in this view from the bottom up.
But we need to break this almost hypnotic notion that we are dependent on what’s big. The opposite really is true. Without enough consumers, there is not enough market for big companies to make huge profits. Without enough laborers, there are not enough hands to turn the raw materials into sellable products. The capital, as noted, can come from the few or the many.
So all are welcome, and all can be honored on Labor Day. But there is nothing in the free-market system that requires big, wealthy, powerful players to make it work. The wealth of this nation would never have come about but for the market of the many, the spending of the many (when their work is paid decently), the labor of the many, big and small. Happy Labor Day.
Adapted from my book, “US: Everything is done by us. We can make it for us“
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