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COMMENTARY: Labor Day holiday is in need of an update

Among American holidays, Labor Day is probably the one in most need of an update. The idea of a “labor day holiday” was conceived in the 1880s by union leaders who sought recognition for the social and economic achievements of U.S. workers. In 1894, Congress voted to establish Labor Day as a national holiday to celebrate workers and their contributions to the strength, prosperity and well-being of the country.

Most don’t realize it, but attitudes toward labor are more progressive and supportive in the United States than they are in much of the rest of the world. European societies, for instance, generally view leisure as being more honorable than work. Throughout Latin America, people who are educated generally look down on those in the laboring class.

It was Alexis de Tocqueville, whose ever-relevant classic “Democracy in America” pointed out that Americans regard work “as positively honorable.” The suggestion that work is good for the soul and necessary to a fulfilling life is also found in the Bible, which makes more than 450 specific reference to the value and importance of work — considerably more than its references to love, hope, joy, grace or peace.

Labor union membership peaked as a percentage of the entire American labor force at 26 percent in 1953. Today only about 11.2 percent of the total labor force belongs to a union. But what is most striking in the face of general decline in private-sector union membership has been the growth of union membership among government employees. Some 36 percent of the public sector is unionized, while approximately 6.6 percent of laborers in business now belong to unions.

Labor Day is what might be called an unfinished holiday in need of broader perspective. What is distinct about the U.S. economy is the strong and widespread entrepreneurial tradition, wherein there is frequent crossover between laborers and business owners — who seek upward mobility for themselves, but who also create new jobs for others.

It’s certainly important to commemorate those who labor. But the people who create new jobs by taking risk in developing new products, services and market opportunities should also be recognized. It is these entrepreneurs who have been the primary drivers of progress and wealth creation that took the country from colonial poverty to world economic superpower in a little more than 200 years — making the United States the envy of the world.

Four of the five largest employers in the United States — Walmart, Amazon, Yum Brands and Home Depot — were founded within the past 50 years while unionized labor was declining. Each of these companies was founded by visionary entrepreneurs who transformed different sectors of the consumer products retailing industry — to deliver a wider variety of products with greater efficiency and at lower prices.

As the U.S. economy has evolved from a manufacturing to a service and information economy, it should come as no surprise that the four largest companies in terms of market capitalization — Apple, Amazon, Google, Microsoft — are all in the business of information technology. Each has greatly increased efficiencies for individuals and businesses, while also catalyzing a multiplier effect spawning the formation of a vast number of new companies and jobs.

If the patterns of economic history prevail, the development and application of automation and artificial intelligence should not be feared, as they are likely to create as many new jobs as those made obsolete. The challenge is to embrace change, recognize opportunity and stay on game with training and incorporating technologies of a continuously changing economy.

So as we celebrate on the first Monday in September that last beach party or barbecue to commemorate those who labor, let us also celebrate the entrepreneurs who drive renewal and progress — creating the new labor and employment opportunities of tomorrow.

Scott Powell is senior fellow at the Discovery Institute in Seattle and managing partner at RemingtonRand LLC.

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