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opinion | Thomas E. Perez

Fair labor practice helps us all

Secretary of Labor Thomas E. Perez.AFP/Getty Images

Labor Day is about more than just barbecues and a three-day weekend. It’s a celebration of the working Americans who power our nation’s prosperity. But on this Labor Day, as we continue to recover from the great recession with a strong economic wind at our back, employers need to recognize their responsibility — to their workers and the nation — to help make sure that prosperity is broadly shared.

Many business leaders understand that our nation is strongest when more people have more. They make choices to ensure their workers can share in the wealth they help generate. From Ikea and Costco to Ace Hardware, employers are paying well above the minimum wage. Not out of mere beneficence, but because better-paid workers are more productive and contribute to the success of the company.

The same goes for paid family leave. Goldman Sachs, Facebook, and so many others know that allowing employees to take time off for the birth of a child helps recruit top talent, lowers turnover costs, and a builds a stronger workforce.


But there are still many employers who put short-term profit maximization ahead of strategic investment in their workers. One CEO told me about a renegade shareholder who bragged that he would “rather be rich than right.”

Too many employers treat workers as a cost to be minimized rather than an asset to be valued. Fast food and other industries are dominated by employers running a race to the bottom on wages and benefits. They pay their workers too little to survive without public assistance — even one-quarter of part-time college faculty depend on safety net programs, as do roughly one-third of bank tellers. In what amounts to corporate welfare, it falls to taxpayers to subsidize these shabby business models to the tune of more than $150 billion a year.

We also see orchestrated efforts to stifle workers’ voices. Underwritten by powerful corporate interests, some elected officials are moving to crush unions and hollow out the middle class. In some states, the very labor unions that helped build the middle class are now the targets of withering political attacks that threaten their existence.

We should be amplifying workers’ voices, not silencing them. President Obama and I remain unwavering in our support for collective bargaining rights, even as we understand that worker voice can take many other forms. We will explore different such models and strategies, many of them supported by employers, next month when President Obama convenes a White House Summit on Worker Voice.


We need more employers to reject the myth that you have to choose between your shareholders and your workers. We need a corporate ethos inspired by the likes of the Container Store’s CEO Kip Tindell. He has built an employee-first culture – the company generates half a billion dollars in revenue while paying full-time salespeople close to $50,000 per year, more than twice the retail industry average. This isn’t pure altruism; it’s enlightened self-interest. Tindell calculates that he gets three times the productivity for a relatively modest increase in labor costs.

If you work full time, you shouldn’t have to rely on food stamps to put dinner on the table. But employers who pay poverty wages and treat their workers as a disposable commodity make far too many American workers do just that. This Labor Day, let’s remember that those employers don’t just hurt their workers. They hurt us all. Employers have a responsibility to the nation. Let’s hold them to it.

Thomas E. Perez is the US secretary of labor. He will join President Obama in Boston on Monday to celebrate Labor Day.


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