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Labor & Worker Rights Tue Dec 08 2009

Wage Theft Outrage: Broken Labor Law and the American Worker

Reading a recent report on systematic wage theft, and with the unveiling of a "wage theft violator map" by the University of Illinois-Chicago and ARISE, I thought of the strong, negative reaction I've gotten the last few times I've written about the privileges of the well educated.

America, raised on the Horatio Alger archetype and a pop culture focused on the triumph of the individual, aches for meritocracy. So individuals get very prickly when confronted with their own privilege. The fact of our privilege makes us uncomfortable; while race separates us, class engulfs us. Jesse Jackson once said he was ashamed to find that he was relieved when, walking down the street late at night and hearing footsteps, he would turn around and see it was a white man. Perhaps--but what if it had been a black man in Brooks Brothers with a leather valise? What if it had been a Deliverance-style white guy with dirty overalls and no shirt? What if it was a juggalo? As a brown guy, I'm more afraid of juggalos than pretty much anyone else.

juggalos_inbreeding_material_2.jpg
The most dangerous game of all


But we shouldn't be ashamed of privilege or disadvantage, and being confronted with it shouldn't evoke anger. There's always someone worse off--and always someone better off. Besides--typically, whatever advantages we have in life are not of our own doing. That's the whole point. A kid born to two doctors and a trust fund should no more try to hide or deny their privilege than a poor kid born to illiterate parents should be ashamed of their situation. The fact that we have little to no control over it is exactly why we should all understand one another. That is where human solidarity starts. With no choice, we're born, and living begins, whether we like it or not. Pretending we all have "equality of opportunity," as libertarian Panglosses do, is just as foolish as pretending that nobody who is successful had to work hard to get there.

That's where we start. Where we go is the obliteration of dependence. Thomas Jefferson once proposed that the state of Virginia seize uncultivated lands and distribute them evenly among the working classes of the cities, that no man should be dependent on any other. The idea of elimination of servitude and dependence was the powerful dynamic of the American Revolution that led directly to the Civil War, the labor movement, the civil rights movements, and innumerable anti-colonial struggles worldwide.

All these fights boiled down in part to this: are we all worthy of protection before the law? Given that we have no choice over our station in life, should justice belong only to those who can afford it? To those who have access to the levers of power? Or are we all brothers and sisters made different only by circumstance, not inherently?

The labor law in this country is hostile to workers and what isn't hostile is unenforced. The result is that millions of Americans don't enjoy equal protection of the law. This makes them an underclass. There is no way to rationalize away the undisputed fact that for a large class of Americans--right here in our city, in rural areas, white, black and brown, men and women--the laws that protect many of us from exploitation and abuse are nothing more than fiction.

This isn't to say employment is by definition exploitative or that all bosses engage in wage theft--only that it is a rampant problem, and that the lack of attention to it constitutes the creation of a subclass of people, denied the equal protection our Constitution and our revolution are supposed to guarantee us.

The study, a collaboration between eleven authors, amounts to an investigation into modern second class citizenship. That the most at risk would be subject to what amounts to billions of dollars of theft every year is unconscionable. For many workers making less than $20,000 a year, more than ten percent of their earned wages are merely taken by those with power over them. For those most vulnerable, losing your job is an economic death sentence. It is exactly that power, enshrined in the doctrine of at-will employment and protected by the dismantling of worker organization in the US, that allows the powerful to steal from the powerless. Shrugging off this kind of illegality is beyond immoral and callous, it is un-American.

The insanity that tells us we should be thankful to have jobs created for us is the mindset that entrenches the absurd doctrine of at-will employment and allows us to treat wage theft as a national inconvenience rather than the organized crime it in fact constitutes. It's a problem for the powerless--not just undocumented workers; the young, the working poor, and workers in industries with traditionally low levels of worker organization. They should be thankful to have any job at all, right? So who cares if their legally mandated meal break was shorter than required by law? They've got a job, don't they?

They aren't as deserving of equal protection. This was a problem that was supposedly resolved by a set of constitutional amendments passed after the last great war against servitude was won. Understand that this is exactly what the lax enforcement of labor law and inhumane immigration laws constitute: a renewed effort to protect existing wealth by classifying groups of people as unworthy of equal protection of the law.

Jobs are not created out of charity. For every job that's created there's an associated profit above the wage. As if that isn't enough, many employers, particularly in the shadowy service and construction industries, go that extra evil mile: stealing from working people.

"The American workplace is governed by a core set of employment and labor laws that establish minimum standards for wages, health and safety on the job, fair treatment, and the right to organize," reads a recent report on ongoing systematic wage theft, "Our findings show that these laws and standards are systematically violated."

*

The ACLU actually opposed the original comprehensive labor law, the Wagner Act (properly the National Labor Relations Act, or NLRA) because of fears it would put labor at mercy of government. Much maligned former AFL-CIO President Lane Kirkland famously suggested that all the labor laws just be repealed, and labor and management allowed to just go at it. Kirkland was essentially confirming the ACLU's concern; the years since the end of the New Deal had seen a torrent of anti-labor laws and rulings from the courts and the National Labor Relations Board turn what was supposed to be a pro-labor legal regime hostile. Now the labor law regime in this country is undeniably broken.

The champions of laissez-faire have never been shy about calling in the government whenever it suited them, going back to employers using law enforcement and even the armed forces to brutally break worker organizations. Now, in the words of one researcher, briefcases have replaced blackjacks, and Seyfarth Shaw has displaced the Pinkertons.


NSFW, because its from Deadwood

John Galt has always been little more than a child cowering behind the apron of a nanny state forever protecting their little favorite.

PCH2009.jpg
Libertarian "Rugged individualism"

The right to organize, an internationally recognized human right and implied by the rights to association and speech in the First Amendment, has been all but extinguished in the US. With that cold hard fact before us, it's easy to see why the rest of the labor law regime--particularly the Fair Labor Standards Act--has become worse than useless, it has become hostile to people who depend on a paycheck to survive. The slop of laws passed by queasy liberals to address unfairness without the unpleasantness of allowing workers to create their own organizations, have contributed to the glut of employment lawsuits, an argument made convincingly by Tom Geoghegan in his book See You In Court. And for the working poor, the failure to either amend these laws to make them fair or enforce the existing laws has allowed a outrageous degree of rights violations to continue unabated. It has wrecked the rule of law and equal protection to the degree that essentially binds millions of Americans into a state of servility.

*

Wage theft affects workers from all strata: from the well-educated semi-professional to the entry-level service worker. This not about people being asked to chip in and work late to finish a project or skip their lunch to meet a deadline. This is theft. People being denied their legally-protected rights in the workplace. While the working poor are the most vulnerable, they are by no means the only people affected. It's a wonderful trick: the creation of a huge underclass unprotected by law is exactly what makes the masses of American workers--those tens of millions in the meaty part of the income bell curve--insecure and dependent.

"Wage theft" covers a variety of types of violations: sub-minimum wage violations; overtime violations; "off the clock" violations; meal break violations; late pay; illegal pay deductions; and stolen tips. According to the multi-state study "Broken Laws, Unprotected Workers" the numbers of workers that are victims of these crimes could number in the tens of millions. By their estimates, twelve percent of relevant workers are victims of wage theft just in the form of their tips being stolen. This amounts to hundreds of thousands--potentially millions--of dollars being illegally taken every week.

Among low-wage laborers, more than seventy-six percent of workers eligible to receive overtime were denied overtime pay. It begins to add up. Fully eighty-six percent of respondents to the study worked enough hours to qualify for a meal break under law, but were denied that break by being forced work through it or being denied their full break. Maybe you choose to skip your lunch while at work--but what if you were denied the ability to take that break? Would you stand for it? Perhaps you have the leverage to just walk off the job. Surely you understand that many people just don't have that option. That is theft plain and simple.

Is it any surprise our society has become so litigious? Workers thus mistreated know there is little regulatory recourse. Opportunistic lawyers swoop in, torts in hand like lottery tickets. So how many good and decent employers suffer from fear of reckless litigation because of the actions of the unscrupulous? Small businesses can't afford the pricey en-briefcased Pinkertons; for large employers, it's just the cost of doing business. The already powerful prosper. Our uneven labor law regime causes this atmosphere of mutual distrust and fear. And only a small group benefit.

*

Is the minimum wage outrageous? Is it too high? Given the ever-climbing productivity rate of the American worker and the complete lack of attendant rise in wages, is the minimum wage a privilege? In the apparel and textile industries and personal and repair services, minimum wage violations were in excess of forty percent, meaning forty percent of respondents reported being paid less than the minimum wage. The bosses in these industries need workers to make their profits--because the work may be "unskilled", does that mean the employee has no right to the protection of the law?

productivity_wages_graph.gif
The Great Communicator says: 'You're Screwed!'

The enforceable contract is the cornerstone of a free market economy. But unenforced labor law, together with the at-will employment doctrine (which exists only in the US as common law anomaly) means that while contracts between business are eminently enforceable, workers have no guarantees, no peace of mind.

*

Some cities are considering action to truly criminalize wage theft--to put employers on notice that if they break the law and steal from their workers, the federal government may not be willing to do anything, but local government will. There's no doubt that Chambers of Commerce will rend their garments and howl about hostile populism chasing out business. Think about the argument there: if forced to obey the law, businesses can't operate.

But nobody is below the law. By creating an atmosphere that truly punishes the unscrupulous, we can protect not only workers from jackals, but we can also protect the honest businesses who suffer from a competitive disadvantage from the unequal application of the law, and raise the standards for working people in all strata of the economy.

 

Philip Rivera / December 8, 2009 9:53 AM

There is another form of wage theft not mentioned in your article. The is the practice of out-sourcing work to another employer-within the U.S.-who will pay their employees less than what the prior employer was paying and provide less health benefits.
Some firms use existing law to create subsidiaries and then out-source the work to the with the same effect as above. What does not change is the work being done.

seth / December 8, 2009 11:07 AM

Great article, provocative and informative (and entertaining). Always good to see exceptional writing on the web. Gapers Block is turning into a big source of news and analysis for me. Go print, baby!

Uh Oh / December 8, 2009 2:14 PM

Phillip,

That is not wage theft, its called comparative advantage and is a basic tenet of modern economics. Its what drives local, regional, and global trade. If comparative advantage did not exist, then every enterprise would attempt to meet its needs internally. (I understand that the whole "health care arbitrage" is en vogue right now, but it is an structural arbitrage based on industry regulation. If you wanted to reduce and maybe eliminate that arbitrage, and end your idea of "wage theft" then you should support allowing insurance companies to provide health insurance across state lines. i.e. real price discovery thru competition)

Aside from an apparent lack of understanding the role of capital in free enterprise, the article brings up an interesting concept.

- if staying late to get a project done represents the theft of an employee's wage, then the inverse would be true as well.

- if an employee spent any time on an activity unrelated work during work hours, it could be considered productivity theft.

- if we consider wage theft a crime, then we must consider productivity theft a crime.

Lawyers could have field days with lawsuits naming sites like Gapersblock as accomplices to productivity theft because a company's employee logged on to their site during work hours.

If content providers like GB had to deal with the threat of litigation, it would have to charge more than its current subscription price to offset its risk. That woudl undoubtedly lead to fewer eyeballs on its pages and less revenue for its stakeholders.

Talk about creating jobs and stealing wages.

Philip / December 8, 2009 3:39 PM

We now get into the issue of whether the unilateral setting of profit margins by the employer excuses, trumps and the legitimizes putting any number of employees out of work just to increase profits. If production remains basically the same as a result of the the outsourcing the change clearly is in the reduced wage and benefits costs that accrue to the employer. The "comparativeadvantage" is to the employer or stock holders not to the former employees that were let go and the new ones that produce the same for lower wages and benefits.
"Understanding the role of capital in the free market" doesn't need to translate to gaining a profit at any cost.

Employers can deal with employee abuse of time internally by disciplining employees up to and including termination. Employees don't have similar internal power to address their grievances unless represented by a union (a woefully low number).

Kenzo / December 8, 2009 5:00 PM

Uh oh,
The truth of the matter is, employers punish workers regularly for what you call "productivity theft." In non-unionized workplaces, that employee can be fired, suspended, or disciplined at the discretion of the boss. The onus is on the employer to do so as they see appropriate. In unionized workplaces, the employee can still be punished, but has the right to due process (depending on the strength of the contract).

Your argument of "you can't mention wage theft without what you call 'property theft'" is a diversion from the real issue, which is that employees are currently being exploited to keep profit margins as high as they can possibly go.

Perhaps workers do dilly-dally in the workplace here and there, that does not give management the right to flippantly underpay, or not-pay their workers.

It is up to management to enforce their rules, and it is the duty of the worker to stand up for his rights as well.

That's only fair, wouldn't you say?

Cliff / December 8, 2009 6:02 PM

Great article, Ramsin. I previously worked for a retail based, British company that sold fantasy and sci-fi toy soldier games (that should be enough without naming names).

During my employment as an "at-will" employee, I've experienced pretty much every version of wage theft that you listed above. I've been asked to skip breaks and shorten meals. I've been asked to stay after hours to help with what ever the store needed.

Eventually, HR implemented "comp time" and a general practice of not making the staff work and not getting paid. But Overtime was strongly discouraged, and if somehow you wound up working more than 37.5 hours a week, it was implied that you should "lose" the extra time, and your manager would make it up to you somehow.

But once you became a salaried exempt employee (usually a store manager), all gloves were off.

I've seen 40 managers put to work setting up a convention after putting in a full week in their stores, assist for the duration of the convention, and work the breakdown because they were expected to. At a little over $16 an hour that's about $96K of free labor.

If you didn't help out, you were not part of the "brotherhood". And employees that didn't have that esprit de corps didn't last long.

I know that I usually put in over 60 (sometimes more, never less) hours of work on a weekly basis.

I have had conversations where I was encouraged not to worry about my vacation expiring, since I didn't need to be away from my store. But the company didn't pay me for the "free time" it got for the expiration of my vacation days.

I worked there for six years before I was fired. And I would tell anyone going to work for that company to laugh and walk away if that company ever offered you a red shirt/job.

Marco Polo / December 8, 2009 6:38 PM

More Deadwood references, please.

mike / December 8, 2009 11:35 PM

People do understand that wage theft happens so people in Manhattan can have heli-pads right?


Free enterprise without enforced labor laws and corporate regulation is akin to fiefdom. End of story.

conor / December 9, 2009 12:36 AM

Communist!

Just kidding. Had to say it. What role do you think our consumeristic culture plays here? I.e. Consumers are used to buying products at a certain price, and in order for the manufacturer to offer a product at that price and still turn a profit, they screw over the workers by stealing wages or outsourcing the work overseas where invisible people make the products. (invisible to us, which is why we don't care!)

Also, need you take so many stabs at libertarians? At the end of the day, they're also champions of the common man, just in a different way than you.

Excellent stuff though Ramsin. Informative and challenging. Also you provided me with a great stomach tatt idea with that first picture.

V / December 9, 2009 5:45 AM

That's an article like I've been looking for from Gapers Block, only I wish it was a little less subjective of the authors point of view, and more statistical.

MTHEALIEN / December 10, 2009 2:07 PM

"As a brown guy, I'm more afraid of juggalos than pretty much anyone else."

Thats really sad man. You realize that statment puts you in the category of people that fear what they don't understand right? The statement also implys that juggalos are racist, which is quite opposite. As a brown juggalo myself, i want to know just exactly why you said that. I'm sure all the black and mexican and asian juggalos would like an answer as well. The white juggalos also deserve an answer, who are you to generalize an entire group on a public forum like that? How would it be for you if a white guy said "being a white guy i'm scared of brown guys the most"? Do you also think that all black people are criminals because some of them are? Do you think all middle easterners are terroists? Let me fill you in, you should be afraid of the klan and nazis, and just so you know juggalos enjoy kicking the shit out of klansmen and nazis regularly. Why don't you do a little research, and consider editing out that highly offensive line.

Ramsin / December 10, 2009 6:34 PM

So to you being a juggalo is the same as being black?

Also, please don't forward this article to your juggalo network, because I'm already scared enough of juggalos as it is.

Relax, ninja.

MTHEALIEN / December 11, 2009 3:22 PM

No, being a juggalo is not the same as being black, i was just trying to make a point by saying don't make a comment about an entire group of people because of the actions of a few. I will not be forwarding this to anyone, but i found this article by accident, which means that others might as well. If that happens, it wasn't me. I will relax. What is it about juggalos that you are afraid of? Please don't tell me you read about that idiot robida and just assumed that all juggalos are as misguided as he was. There isn't anything about ME that you should be afraid of, and I am absolutely a juggalo.

Ramsin / December 11, 2009 6:29 PM

Conor- Libertarians don't care about the little guy! They only care about not letting the little guy share with the big guy!

V- Thanks.

Cliff- Your case is a perfect example of how this type of treatment pervades the economy at most levels; really, only creative professionals and high-skilled professionals (lawyers, doctors, architects, etc.) are immune--and even at the lower levels, those guys get screwed (witness doctors joining SEIU).

Marco Polo- I'm on it, I promise.

Oh No- So if a murderer uses a phone in committing his murder, is AT&T indicted as an accessory? Also, these are laws that already exist that aren't being enforced. I think everybody else addressed your other points.

MtheAlien- I don't know man. I just don't get it. Those dudes are scary.

MTHEALIEN / December 11, 2009 7:01 PM

C'mon man really? So you don't know why you're afraid of juggalos, you just are? For someone who wrote a pretty good article about wage theft, that's a really weak answer man, i actually would like to discuss the rest of your article, partly because you come off as an intelligent person, also partly because i'm a victim of wage theft and don't really know what to do about it without getting fired for just bringing it up, but, i can't get past your ignorance of juggalos. It's not that i don't want to, it's the opposite, i want to truly understand what it is that you are scared of. Besides myself, have you interacted with any juggalos?? I just think if you went so far as to post a picture that came from the gathering of the juggalos, that you would have an actual reason to feel the way you do, not just because it's what most people in a position like yours on the internet choose to say. Do you realize the pic you posted came from the gathering, which is a celebration of juggalo love? All i'm saying is that you really shouldn't judge a book by it's cover. Lol it's a shame more people don't actually judge books by their covers, then we wouldn't have to deal with all this twilight bs!

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