Combating Wage Theft
It is great to see Kim Bobo's book on wage theft drawing attention on TPMCafe and elsewhere. It is outrageous that millions of workers have their earnings stolen from them by their employers. Hopefully, this book will help to ensure that enforcement is stepped up so that this practice is brought to an end.
However, one aspect to this issue has intrigued me. Wage theft is often seen as an issue of regulation. The idea is that we need an effective regulator at the Labor Department to ensure that employers do not steal wages from their workers.
This is intriguing because there is no reason to view this as a question of regulation: it is a question of law enforcement. Would anyone call the prevention of shoplifting a problem of regulation? How about the prevention of bank robbery?
In these cases everyone clearly recognizes the problem as one of law enforcement. We want the police to arrest people who shoplift from stores or rob banks. It's very simple. But, when it comes to employers who steal wages from their workers we want the government to "regulate" so that this does not happen.
This is yet another case where we allow an argument to be framed in a way that disadvantages progressives. The issue here is property theft just as it is in the case of shoplifting and bank robbery. We should insist on discussing it in that context (as is obviously done in the title "Wage Theft in America").
There is no reason that stealing wages from workers should be any more acceptable than robbing a bank. We are not looking for the government regulators to overturn market outcomes; we want the police to enforce the rules of the market. The police manage to enforce the rules pretty well when it comes to the property of the wealthy. We just need the same sort of enforcement when it comes to the property of low-paid workers: their wages.
Many people I know working Retail, regularly work off the clock, with or without management knowledge. Why is anyones' guess, from just plain wanting to finish the days work, ego, or fear they're not working fast enough and will be fired in favor of someone who may be better. Regardless, it is a cost avoidance for Companies that would otherwise need to pay overtime or hire additional employees. How to stop the practice is another question.
May 11, 2009 5:02 PM | Reply | Permalink
How stupid! Sue Obama then for wage theft he's unleashing on Government Motors and Chrysler.
Next is "job theft" when a company doesn't employ every single person who responded to its recruitment ad.
Typical hypocrisy from the fearless Trotksyist, in every post.
It's outrageous when employers "steal" wages but the government can't seem to steal enough income through confiscatory income tax.
May 11, 2009 5:43 PM | Reply | Permalink
Lalo,
since you seem to be avoiding the issue of wage theft, or at least rationalizing it, your reply to this subject suggests you support wage theft.
An analogy of your post seems to be that if all thiefs don't go to jail then no thiefs should go to jail.
May 13, 2009 8:01 AM | Reply | Permalink
What planet does this guy inhabit?
American law doesn't apply to the bosses.
American law is just another tool of class oppression.
Like most of the bourgeoisie, Mr. Baker has probably never seen a cop up close and personal, except for traffic cops, and he probably never will...
Unless he falls out of the bourgeoisie, like millions of recently laid off workers who will never, ever see another middle-class job.
There are lots of unpleasant surprises waiting for all of them, but the realization that they somehow arrived on the wrong side of the law without committing any other crime than being poor is likely to be one of the most demoralizing lessons they learn, during the glorious administration of Barack Obama.
May 11, 2009 5:58 PM | Reply | Permalink
For the same reason that we think executive-pay contracts need clawback provisions: laws about paying people exactly what they're owed are for the little people.
The analogy gets even more pointed: alter your hours or pay rate so that you get more than the boss says you should, and you're facing jail time for embezzlement or fraud. Alter employees pay records so they get less than they're contracted for, and at most it's an accounting error.
May 11, 2009 8:52 PM | Reply | Permalink
As a resident of an economy considering implementing its first-ever minimum wage (Hong Kong), what strikes me is the effort people go through to work / pay the market wage, rather than the minimum wage. If employers can find employees willing to work for less than minimum wage, and workers are willing to take those jobs, minimum wage is set too high.
As a good California Democrat, I have always supported workers’ rights. But, that doesn’t mean the minimum wage is a bad idea. Every significant study shows that a minimum wage more than a few percent above the market rate reduces employment and increases poverty. Well, not every study; there are a few debunking the David Card and Alan Krueger theory.
May 11, 2009 10:00 PM | Reply | Permalink
describing yourself as a 'good california democrat' doesn't make it so. default california democrat might be more accurate.
geez. even adam smith, father of free market capitalism, understood that establishing minimum wages is a necessary part of a market economy.
even setting aside the obvious fact that the market can't be allowed to determine everything on its own, wage and labor regulations (along with a robust social welfare system/'safety net') actually help to ensure that the market works.
contrary to what you imagine, exploitation of workers is not evidence of a functioning market.
May 12, 2009 10:56 AM | Reply | Permalink
I have never seen a study whose results are as you stated. In fact, when minimum wage with regular increases are in effect, poverty levels generally drop.
May 12, 2009 3:04 PM | Reply | Permalink
You're going to have to cite these studies. I don't believe you.
May 12, 2009 3:47 PM | Reply | Permalink
baba,
http://www.ilr.cornell.edu/directory/gsf2/downloads/Fields-kanburMinWgMay05.pdf
Here's a look at both sides, good luck.
May 13, 2009 8:36 AM | Reply | Permalink
Let's see...they took their textbook model, plugged some info in, and came to the same conclusion their model already predicted. A minimum wage increases poverty and unemployment.
I'd call this the GIGO argument. The conclusion is laughable. One self-published study does not a good case make.
May 14, 2009 1:44 AM | Reply | Permalink
It's more like diving into a cesspool and complaining that you smell like shit.
May 16, 2009 3:00 PM | Reply | Permalink
Sorry. It should be "That doesn't mean the minimum wage is a GOOD idea."
May 11, 2009 10:01 PM | Reply | Permalink
Why is it a problem of regulation?
Because when rich people do it, it is not a crime, it is the way it is supposed to be. The only concern is to keep their theft within bounds.
May 11, 2009 10:57 PM | Reply | Permalink
Can't break the law but it is perfectly alright to do it with the pen...
It is all symptomatic of the amount of favor big business curries with our government. And if it all goes wrong, with crimes being committed, the government will be there to do what they've been paid to do...not to do anything rash that might hurt their benefactor's bottom lines. Not only are they not going after Wall Street they've rewarded them for their unethical/illegal behavior with tons of our (that being the rest of us) money...do I really think they're all that interested in enforcing wage laws on employers? Tough call but I would guess the answer to that would be 'no'...not that it should be.
The way we oversee how business is done in this country, regulatory and law enforcement-wise, is a complete joke.
May 11, 2009 11:46 PM | Reply | Permalink
Mr. Baker,
In a nation that has difficulty admitting that a carefully constructed and implemented torture program is a criminal matter, it comes as no surprise that the same wisemen see the problem of wage theft as a regulatory one. Does it?
Our decision-making, policy-making classes are so corrupt and beyond redemption they cannot recognize any criminal activity for what it is. They are so steeped in criminal and unethical behavior themselves they have forfeited any legitimate claim they may have to hold the positions of power they have.
May 12, 2009 11:01 AM | Reply | Permalink
Sadly, this is so, Oleeb.
May 12, 2009 3:06 PM | Reply | Permalink
Isn't this argument a little like saying we don't need an OSHA or an EPA, because local prosecutors can enforce safety and environmental laws?
May 12, 2009 11:32 AM | Reply | Permalink
fkaZk0sm0,
Interesting insult about my politics; any reason for it?
.
Adam Smith pro-minimum wage? Not in my edition!
“The obvious argument that the free market can’t be allowed to determine everything on its own” ? OK, consider that particular straw man firmly placed to one side. If ever I see a free market attempting to “determine everything,” I’ll be sure to firmly tell it to stop.
And, contrary to what you imagine, there actually isn’t any evidence to support imposing a minimum wage as a means to reducing poverty.
.
Bev D, baba durag,
Minimum Wages, by David Neumark and William Wascher (The MIT Press, 2008) very nicely documents the subject, and most firmly debunks the Krueger and Card study.
There's a pretty sound consensus that minimum wages set above the market wage (otherwise, what's the point?) create fewer jobs and reduce incomes among those affected.
May 12, 2009 10:51 PM | Reply | Permalink
Actually, 110% (i.e., 10% wage increase) X 97% (number of hours worked after 3% decline) leaves worker's with 6.7% more wages and 3% fewer hours. That's the worst-case scenario. If you offered me that choice I'd take it every time.
May 13, 2009 2:58 AM | Reply | Permalink
i just find it appalling what passes for a 'good democrat' these days. no wonder that the republican brand is in such bad shape when people who don't even believe in the minimum wage call themselves 'good democrats'.
certainly not his thesis, but you might want to take a closer look at his reference to richard cantillon's discussion of subsistence wages.
yes, poorly phrased. didn't mean to suggest that you were actually arguing that. but if you believe that the market should determine how low wages should go, hard to imagine what you don't think the market should determine.
and neumark and wascher's literature review does not debunk card and krueger, firmly or otherwise. neumark and wascher is little more than a documentation of publication bias.
old-fashioned econ theory might well enjoy a consensus in believing that increases in minimum wage lead to higher unemployment but actual real world data simply doesn't support the claim.
May 14, 2009 12:38 AM | Reply | Permalink
Chris Hayes had an article about the GAO report revealing complete lack of enforcement at the Labor Department's Wage and Hour Division:
http://www.thenation.com/doc/20090427/hayes
May 13, 2009 9:19 PM | Reply | Permalink
fzaZk0sm0,
I didn’t realize believing in a minimum wage was part of the requirement for being an active officer in the Democratic Party. I guess I’m more center-of-the-road than you.
As for Adam Smith being twisted around in circles so as to defend anything anyone wants to defend, it is an old story. Subsistence wages are not the same as a minimum wage, not today.
If you believe the market should not play a role in determining how low wages should go during an economic collapse, you probably also believe the market should not play a role in determining the size of Wall St bonuses. Either way, you prefer price fixing to market rates.
I disagree, and on principle. If we declare that anyone incapable of commanding at least $7.15/hr is not allowed to legally work, we strip the legal right to work from some portion of our population. The further $7.15/hr is from the market wage, the more to which we deny the right to work. I find that wrong.
And, I don’t buy for a minute the obvious counter-argument “let the employers absorb the difference.” Employers will do what is in their best interest, and if firing people and closing shop or moving where it costs less to do business is in their interest, that’s what they’ll do. You may not like it, but you really can’t do anything about it.
So, why punish low skill, low education, low experience workers – the most vulnerable members of the workforce – by denying them the right to work for the wage they can command, if they wish to?
Neumark and Wascher's literature review cites numerous studies that fully debunk card and krueger, at least that’s my professional opinion. And, the real world data support it in just about every case.
May 14, 2009 6:00 AM | Reply | Permalink
obviously not a requirement for being either a member or an 'officer' of the democratic party. just a basic requirement for being considered a 'good' democrat. i have no doubt you're more center of the road than i, but i also think you're on the other side of that road.
never said subsistence wages were the same thing as a minimum wage. just directing you to the section of 'your edition' that warrants closer inspection.
that's a bit nonsensical. i happen to believe that the minimum wage ought to be adjusted according to the cost of living. your prescription for allowing the market to determine how quickly wages can race to the bottom during an economic collapse is a recipe for catastrophe.
in the context of a minimum wage everyone is capable of commanding the minimum wage. it doesn't strip the right to work from low-skill workers, it strips the right to exploit those low-skill workers. $7.15 an hour could never be far enough from any imagined market wage to cause any statistically relevant impact on employment.
and numerous evaluations of neumark and wascher's literature review fully debunk neumark and wascher's conclusions. if anyone is paying you for your opinion on the matter, you should be a bit more up on the real world data and how little of it actually supports your 'professional opinion'.
May 15, 2009 2:38 PM | Reply | Permalink