The spirit and drive of California workers is legendary – it helped build one of the greatest economies that history has ever known. The promise of California has always been that if we work hard and play by the rules, we can create a better life for our families.

But this Labor Day, the promise doesn't hold true for a growing number of Californians, especially younger workers. Years of slash-and-burn budgets, inadequate funding of education, diminishing health care, lack of leadership on job creation and corporate manipulation of the economy have caused a downward slide in living standards that threatens to shut many in the next generation of workers out of the middle class.

According to a recent national survey commissioned by the AFL-CIO, workers under 35 are having a much harder time than they were 10 years ago. Fewer have health insurance, good jobs or retirement security. Six in 10 say they don't have enough savings to cover their living expenses for two months. As a result, young workers have become less hopeful about their future. Only 55 percent of young workers say they are hopeful about their economic futures, compared with 77 percent the last time the survey was conducted in 1999.

The anxiety young workers are feeling comes as no surprise. Unemployment in California is at a post-World War II record high of 11.9 percent. But instead of responding to the economic crisis by offering greater support to workers and their families, Gov. Arnold Schwarzenegger fueled the crisis by slashing funding for education, infrastructure, health care and other vital programs. These ill-advised cuts threaten to turn this economic storm into a Category 5 hurricane.

Cuts to education are especially damaging, particularly for young workers. California's education system is not keeping up with the changing demands of the state's economy, according to the Public Policy Institute of California. Based on current trends, PPIC predicts that 35 percent of working-age adults in California will have a college degree in 2025, but 41 percent of jobs will require a degree. By not adequately funding education, we're digging ourselves a deeper hole economically.

Beyond budget cuts, there are a number of threats to our state's future, primarily around wage disparity and health care.

In 2007, the wealthiest 1 percent of Californians had an average income that was 50.7 times more than that of the average middle-class taxpayer. That income gap between the wealthy and the middle-class has doubled since 1995, according to the California Budget Project. Low-wage jobs with few benefits may lead to bigger CEO bonuses, but they don't build a stronger society. It just means less money flowing back into the economy to support small business, fueling a vicious downward cycle.

Health care is stressing the middle class, in particular those under 35. Nationally, 31 percent of young workers have no health insurance, up from 24 percent a decade ago. In California, one in five now goes without health insurance, and as many as 2 million more could lose their insurance due to recent budget cuts and the continuing recession. Those who do have insurance have seen the premiums for their job-based coverage grow four times the rate of inflation since 2002.

Immediate action to solve the health care crisis is imperative. Workers deserve the security of knowing that if they or a family member get sick, they'll get the care they need without going bankrupt. Congress must act immediately to pass real health care reform that includes a high-quality, affordable public option.

This Labor Day we call for a new direction that will support the next generation of workers by rebuilding our economy from the bottom up. Wage growth will fuel an economic renaissance. We have an enormous opportunity to lead the way – as California has so many times before – through investing in the good-paying green jobs of the future. A 21st century approach to greening the economy would put millions to work, many of them right here in California.

Another important way to boost wages is to restore workers' ability to join unions and bargain with their employers. Workers who want to join a union often face intimidation and harassment by corporations. Nearly 30,000 workers faced illegal coercive behavior in 2007, according to the National Labor Relations Board. Reforming labor law is key to our state's economic recovery.

California workers are among the most productive in the world. They're the innovators behind some of the greatest technological achievements of our time. On this Labor Day, let's honor those contributions by building a better future for the generations to follow. Together, we can restore California's promise.

Art Pulaski is executive secretary-treasurer of the California Labor Federation.