Liability Day 2009

In his Labor Day note to clients and colleagues, my friend Bob Dilenschneider reminds us that the first observance of Labor Day is believed to have been a parade of about 10,000 workers on Sep. 5, 1882, in New York City. Bob's research shows that by 1893 more than half the states were observing a "Labor Day"; and that in 1894 Congress passed a bill to establish a federal holiday that was signed by President Grover Cleveland.

The very name of this holiday this year seems like a cruel joke.

The Labor Department reported just a few days ago that the jobless rate has now risen to 9.7%. Everyone knows that is a grossly misleading figure. Add in those who have given up looking for work or who are doing part-time gigs as they search for full-time employment or who have gone uncounted, and the jobless stat easily doubles.

When I first got into the business world in the 1970s, companies were proud of the number of people they employed. I remember this distinctly. In their letter to shareholders in the annual report, company chairmen would routinely cite the size of the company's workforce with the same sense of satisfaction as the amount of the firm's revenues and the scope of its operations.

Now, what is being conveyed to the market is something very different — a pride in how few people companies need on their payroll. How sad it is to see companies get high-fived by analysts and the stock market for workforce reductions and other miserly treatment of their human capital.

Survival is one thing. But my fear is that managements see their company, or are forced to see their company, as simply a pass-through mechanism for disbursing its revenues to its institutional owners (after pocketing, in too many instances, an outsized take for themselves).

Bob Dilenschneider concludes his Labor Day letter with this fervent wish: "Let us pause to remember what Labor Day is meant to be — a celebration of the working men and women who have made America the greatest nation in history. Let us rededicate ourselves to getting everyone who is ready, willing and able back to work so that America can continue to grow and prosper and serve as a model to the world."

Let me add my own wish to Bob's: that public corporations regain a sense of themselves as employers, as organizations that see and treat their workers, young and longtimers alike, as assets and not expenses — or, worse, liabilities.

Liability Day? That's kind of where we seem to be at this Labor Day.

Ending on a hopeful note, Bob offers some good news: "Several of our clients indicate strong resolve to get America working again to innovate, to invent and to find ways to spur the economy forward."

Let's hope that by next year this time such resolve will have born results, and put some of the celebratory nature of labor back in Labor Day.