Photo: https://www.britannica.com/story/why-is-labor-day-celebrated-in-september
Welcome back to The Sunstone Way.
Colin Powell was a great general who became a great statesman. I like what he has to say about work.
“A dream doesn’t become reality through magic; it takes sweat, determination and hard work.” — Colin Powell
That’s a great definition of the American Dream, isn’t it? So many dreams have come true in our country over the last three centuries or more with this very formula.
It is worth pondering as we celebrate Labor Day this coming three-day weekend.
Labor Stands Up
Labor Day has been a national holiday since 1894. What’s now a time for picnics, parades and political speeches has its origins in violent clashes between workers and company owners, often backed by politicians of the day – in particular, the Haymarket Affair in Chicago, when a bomb went off during a labor rally, killing a number of police officers and civilians.
President Grover Cleveland signed the Labor Day bill making the holiday the first Monday in September to avoid the more strident and violent May Day (May 1) that became the workers’ holiday in much of the world.
At the time, there was no restriction on child labor, and 12-hour workdays six days a week were common. It wasn’t until 1938, in the midst of Franklin Delano Roosevelt’s New Deal, that the Fair Labor Standards Act limited child labor, mandated a shorter work week, created a minimum wage and required overtime pay. Unions have fought for better work conditions ever since.
Value Of Work
A basic rule of business is to keep the cost of creating whatever it is you create as low as possible. One of the few variables in that equation is the cost of labor, so it follows that business owners are interested in keeping labor costs as low as possible.
But they do have to pay enough to get the work done, and get it done well. No work means no product, and no product means no income. That’s why strikes (no work) are the top union weapon.
Labor, whether that’s on an assembly line or in a research lab, is the engine that drives our economy. When people are working, the economy is working. When people work more efficiently, the economy works better.
Measuring The Economy
Economic indicators rule much of our fiscal lives. Reading those indicators is how the experts determine if the economy is growing or shrinking, heading towards recession or prosperity, and therefore how much interest we pay on loans or savings accounts.
To try to make it understandable, pundits and economists alike boil down much of this talk to something called Gross Domestic Product (GDP). I’m sure you’ve heard the phrase. It measures the total monetary value of all goods and services produced in the country over a specific period.
Generally speaking, GDP growth is good. If GDP drops over a period of time, that’s bad – recession or depression bad if it goes on long enough. There are a number of reasons either scenario takes place, but the biggest one is something called labor productivity.
Labor productivity is defined as the output per worker per hour worked. In other words, higher labor productivity means more goods and services are produced. And that means the GDP is growing.
But how do you increase labor’s (people’s) productivity to make the GDP grow? You have to invest.
Invest In The Future
Putting more people to work, even if the level of productivity stays the same, will increase the goods or services produced, growing GDP. That’s why everyone watches the unemployment numbers so closely.
Using new equipment can increase productivity. An electric saw can cut lumber faster than a hand saw, creating more 2x4s in a shorter period of time.
Finally, better technology can increase productivity – new technologies can make it faster and/or easier to complete a task, increasing what a worker can do in an hour. But new technologies don’t just happen.
It takes research, trial and error, thinking out of the box and more to come up with new technologies – ways to build a better mousetrap, if you will. That means supporting innovation and entrepreneurship.
Investing In The Now
We live in an amazing, fast-paced world where new technologies from Artificial Intelligence to medical breakthroughs are taking place almost daily. None of it could happen without the work of dedicated, talented people working together.
That’s a great reason for a holiday. Let’s pause on Labor Day and remember all those who have worked so hard to make our world what it is today, and all those working so hard today to make it a better place tomorrow.
That’s The Sunstone Way!
And remember, always be a Sunstone.
John Keisler
CEO & Managing Partner
Sunstone Management, Inc.
To receive a copy of this blog each week, sign up at the link.
Have a comment about this topic, or want to suggest topics for future blogs? Click here.
©Sunstone Management, Inc. 2024