The sorry state of labor in 2018

If the Trump economy is so great, why are so many people working full-time, but living paycheck to paycheck?

Man Riding a check in the Sky
Man Riding a check in the Sky

Candidate Donald Trump ran on a populist platform aimed squarely at economically and racially anxious white working class voters, promising more jobs and higher wages. But President Donald Trump has routinely enriched himself and his wealthy ilk, delivering massive tax cuts to corporations and leaving middle class workers in the lurch.

According to Trump, the American people are living in “the greatest economy in the HISTORY of America and the best time EVER to look for a job.” The facts reveal something quite different.

While unemployment may be low, workers are experiencing historically low wage growth, forcing 40-hour-a-week workers to live paycheck to paycheck. And corporations, who were granted a significant tax cut in the GOP tax bill, are routing their profits mostly to top executives and large corporate shareholders in the form of stock buybacks.

So on this Labor Day, here is the sorry state of affairs for workers in the United States:

A decline in union membership

Unions are essential for maintaining income equality by giving workers bargaining power to fight for better wages and working conditions. As multiple studies have shown, the hollowing out of workers’ wages is tied to the decline of collectively bargained union contracts. In one long-term study by Princeton University, researchers found that unions have consistently “provided workers with a 10- to 20-percent wage boost over their non-union counterparts over the past eight decades.”


Union membership, however, has been in a downturn for decades — so much so, that the decline of the American middle class almost exactly mirrors the fall in union membership. In the 1950s, more than one-third of all private-sector workers belonged unions, compared to roughly 10 percent now. But the decline isn’t due to a lack of enthusiasm among workers; In fact, new research suggests that nearly half of non-union workers — roughly 58 million Americans — would join a union if given the opportunity. That’s quadruple the number of American workers currently in a union.

But the future for collectively bargained unions, unfortunately, looks bleak given the president’sposition as Union-Buster-In-Chief. Since taking the office, Trump has rolled back a series of pro-union Obama-era regulations.

In December, the majority-Republican National Labor Relations Board (NLRB) got rid of policies that helped smaller unions organize, protected the rights of franchise employees, and shielded workers from union-busting tactics. The Trump-appointed NLRB general counsel Peter Robb, made the agency’s pro-employer stance crystal clear in a memo to regional offices that signaled the NLRB would continue to reverse Obama-era policies.

Justice Neil Gorsuch, a conservative appointed to the Supreme Court by Trump, was the deciding vote in the recent anti-worker Court decision, Janus v. AFSCME. The holding of Janus is that workers in a unionized shop who choose not to pay union dues can still receive the benefits and protections a union offers because the agency fees workers are required to pay are form of speech protected by the First Amendment. The decision creates a “free-rider” problem that could severely depress union membership. After all, why pay dues if you can get something for nothing?

As ThinkProgress as previously reported, the Janus decision could be taken to absurd extremes:

“[…] if bargaining over employment matters now counts as First Amendment-protected speech, nearly any labor law could fall. A minimum wage law could be characterized as a ban on negotiations for low wage jobs. Or a law requiring employers to provide certain health benefits could become a ban on negotiations over health care.”

Sadly, as long as unions remain weak, so will the American worker.

CEO-to-worker pay ratio

The salaries CEOs receive compared to the pay for rank-and-file workers is starkly disproportionate and upsetting. At industrial giant Honeywell, the largest company to disclose the ratio in February, the ratio was 333 to 1.  At Amazon, a company plagued by strikes against long hours and harsh working conditions, billionaire CEO Jeff Bezos made 1.2 million times the median Amazon salary in 2017. While Bezos’s salary itself is not particularly high, (an spokesperson for Amazon maintains Bezos’s salary is just $81,840) his $164 billion dollar net worth is based on Amazon stock increases and in the future, will have to option to cash out on his earnings.

On average, CEOs are paid 333 times the wages of an average employee at their company.

This gap is only expected to grow as changes put into motion by the GOP tax bill take effect. Rather than delivering an “economic turnaround of historic proportions,” as Trump recently boasted, the bill will likely end up costing well over $1.4 trillion dollars, as it continues to provide handouts to the wealthiest Americans.


A recent Politico review of Securities and Exchange Commission (SEC) filings revealed that corporate executives, who often receive most of their compensation in stock, have been profiting enormously from the bill through stock buybacks.  Following the passage of the measure last December, Oracle Corp. CEO Safra Catz sold $250 million worth of shares in her company, the “largest executive payday this year.”

Research by Americans For Tax Fairness found that powerful Fortune 500 companies have spent a total of over $238,244,348,330 in stock buybacks since December. This is what corporations choose to do instead of raising wages.

If McDonald’s, whose workers frequently strike for a living wage, had spent the money it poured into stock buybacks between 2015 and 2017 into bolstering employee pay, it could have given raises of $4,000 per year to its 1.9 million workers.

The effort to make the nation’s wealthiest investors and CEOs even richer doesn’t stop with tax cuts and stock buybacks — the Trump administration is also considering a ploy to bypass Congress and implement a capital gains tax, which would mean a $100 billion tax cut for the rich.

That amounts to a very Happy Labor Day, but for those who least need or deserve it.

This article has been updated to clarify information Jeff Bezos’s salary.