Rupert Cornwell: Out of America

Labor Day's a sham for the working stiff: Ordinary Americans work harder, more efficiently and for less ... while the rich get richer

You may be surprised, but we are about to celebrate Labor Day here in the US. Most of the world chooses to celebrate the achievements of ordinary, toiling humanity on 1 May. As so often, though, America is different.

Elsewhere, the holiday comes at the start of spring, a season that symbolises hope and renewal, even in places that long had no reason to trust in either. In the 1980s, I spent four years in the old Soviet Union and always found May Day the most enjoyable of their national holidays. Winter's grind was over, and people genuinely enjoyed themselves. There was a spontaneity in the air, despite the mockery of real life in the proclaimed workers' paradise, the hypocrisy of the "class struggle" and all the propaganda nonsense about the "dictatorship" of the most downtrodden proletariat on earth.

Here, labour's theoretical big moment comes at the end of the season. It's a rather melancholy occasion. To be sure, you get a long weekend, but the days are already shortening. There are picnics, barbecues, special sales in department stores and the rest.

Overshadowing everything is the next day's return to the serious business of autumn. This year, most schools are already back, after a summer break that began in late May. In an election year like this one, Labor Day Monday also marks the unofficial start of the political campaigning that reaches a climax on the first Tuesday in November.

But why did the US go for September, rather than May, to pay notional homage to working stiffs? The date can be traced to the Knights of Labor, a precursor of the modern American unions, which held its first parade in New York on 5 September 1882.

But as relations between employers and labour became more bitter, demonstrations swept Chicago at the start of May 1886 in support of the then revolutionary concept of an eight-hour working day. The so-called "Haymarket Riot" followed, bloodily suppressed after a policeman was killed. Eight protesters were convicted in a show trial, and in November 1887, four were hanged in public. The world's labour movements were outraged. May Day became linked with Haymarket, so President Grover Cleveland, fearing a May holiday would only encourage anarchists and radicals, and symbolically link US labour with its international brethren, backed the original September date of the Knights of Labor. And so it has been ever since.

The US union movement has been in decline for decades, hastened by globalisation, outsourcing, and the "Wal-Martisation" of the economy. Just after the Second World War, one in three US workers belonged to a union. That dropped to one in four by 1979, and to one in eight now.

Why do you never read of a big strike in America, even at companies such as Ford, GM or the big airlines, ones that are slashing pensions, healthcare benefits and, in some cases, basic pay? That is because, as America's traditional industrial base has weakened, the shift in power from labour to capital has accelerated. Unions know that strikes only hasten the departure of jobs to cheaper labour markets abroad and can destroy the company that provides their livelihood.

The New York Times week up with chilling statistics last week. Nowhere in the industrialised world is the gap between rich and poor widening more swiftly, thanks not least to President George Bush's tax cuts, tilted towards the already-rich or super-rich. The Times study showed that while productivity has risen 2 per cent a year since 2003, the median hourly wage, adjusted for inflation, has fallen by a similar amount. People are working harder, and more efficiently, for less.

Thus wages and salaries now account for a smaller share of the US economy than at any time since the war, while the share of corporate profits is at a near-record high. Add the cuts in benefits and soaring healthcare costs (for the 16 per cent of the population without insurance), and you understand why the economic upswing that started in late 2001, and so loudly trumpeted by Mr Bush, is the first since the war to have produced no significant increase in wages. Happy Labor Day, everyone.