The Crime Wave No One Talks About
Ten years ago, I had no idea wage theft was such a crisis -- though I suspect it was just as prevalent then as it is today.
Wage theft is the failure of an employer to follow the law by paying a worker for all of his or her work. Two to three million workers aren't paid the minimum wage required by law. Three million, perhaps more, are misclassified as independent contractors when they are really employees, a maneuver that steals both from workers and from the public coffers. Untold millions aren't paid the overtime premium the law requires. Billions of dollars are stolen each and every year from workers. This is not a small or isolated problem of a few bad employers. It's a systematic theft of wages from the nation's workers.
When I helped organize Interfaith Worker Justice (IWJ) in 1996, I primarily had in mind that the organization would engage the religious community in supporting workers' rights to organize and get good contracts.
A few years into the process, pastors began referring random workers to us. At first we tried to convince our union partners that they should organize and represent these small groups of workers. In past eras, unions might have considered these small groups of workers, but with labor's focus on strategic organizing campaigns - a focus I understand and support -- they weren't interested in diverting attention to the smaller workplaces.
Next we created some worker rights materials in hopes that we could simply send some materials when workers called. But that merely resulted in more workers calling (if we created the workers rights materials, we must know how to respond). Oh dear.
Eventually, we decided we had to create a structure to support workers and respond in more systematic ways. Worker centers emerged as a structure for responding to these groups of workers who had unresolved workplace problems and no place to turn. In urban, more unionized areas, the groups of workers were usually relatively small. In more rural communities with little union density, even large groups of workers in poultry plants sought help from worker centers.
Although the centers do their best to support workers with a variety of workplace problems, the number one problem workers bring to the centers is that of employers not paying them for all, or sometimes any, of their work. When we've polled workers who come into the centers over wage theft, we often find that the same employers who are stealing wages are also discriminating against their workers and injuring them. No big surprise there, but workers tend to visit the centers most often when they haven't been paid.
Over the years, I've been dismayed at the extent of this phenomenon. When I describe the situation to friends or family, or in speeches to religious audiences, the primary response has been surprise and shock. No one thinks it is right to underpay workers. The most common response to my book is, "I had no idea wage theft was such a problem."
Over the years, I've become convinced that in addition to a strong and revitalized labor movement, we also needed a strong and visionary Department of Labor (DOL). Throughout the Bush years, our organization worked to build and maintain relationships with DOL leadership, especially at the Wage and Hour Division. It became clear that the division had neither the resources to do the job nor the mandate from the top to seriously stop and deter wage theft. Despite the best efforts on the part of the worker centers to work with the Department of Labor, we frequently couldn't get calls returned, we had our Freedom of Information Act (FOIA) requests denied, and settlements typically gave workers a mere half of the wages they had stolen.
I didn't set out to write a book on wage theft. I set out to write more of a monograph on what a visionary Department of Labor might look like. But to do that I had to explain why we needed a visionary Department of Labor. A friend in the church choir I direct admitted he didn't even know we had a Department of Labor. (So much for its visibility in people's lives!) I began by explaining the breadth of the crisis of wage theft. Then I explained how wage theft occurs. Next I explained why it happens. As an organizer, I had lots of suggestions for what people could do to help stop and deter wage theft. Consequently, before you knew it, I had a book on wage theft.
I'm excited about this week's TPM Café Book Club discussion because of the terrific interlocutors assembled. I look forward to learning from them. Here are some questions we might explore together:
1) Will Hilda Solis and her great team at the Department of Labor be able to get the resources necessary to seriously stop and deter wage theft?
2) How does the labor movement relate to worker centers? How should it?
3) Is there a way to engage the ethical business community to play a role in stopping and deterring wage theft? (I've tried, but failed miserably so far!)
4) If some version of labor reform passes Congress and workers feel safer to organize unions, how can unions support the small groups of workers - say, five Dunkin' Donuts workers - who decide they want to organize unions? Is there a role for worker centers in expanding unions to smaller groups of workers?
5) What are the long-term prospects of updating and expanding coverage in the Fair Labor Standards Act?
You bring up some very valid points...
It is wrong for workers to be exploited and it should not be tolerated.
HOWEVER... it's not like workers are without sin. There have been many studies done over the years that show just how much money employees steel from their employers... Sometimes it's "shoplifting", sometimes it's outright theft from the till, or it could be just using company time (for which they're being paid) to tend to personal business.
This last mention (using company time/resources for personal gain) is HUGE!
I own a small business (5 employees) and I am not a tyrannical "boss"... I allow my employees to use the internet (for personal use - email, etc...), I allow them to use their cell phones at work... But, truth be told, I am paying them to do this... I could certainly forbid all of that and expect them to do only work that benefits the company.
Also, I ALWAYS pay MORE than minimum wage and I try to create an environment of mutual respect... There are some employers who pay minimum wage (or less, apparently) and they don't try to create a good work climate. Normally I'd say that such poor management skills would end up in the death of these companies... and I may still ultimately be right in saying that.... but it seems some are doing this regularly and getting away with it for long periods of time. This is flat out wrong!
Thanks for drawing attention to this problem.
May 11, 2009 3:56 PM | Reply | Permalink
But one of the reasons you don't forbid employees from checking personal email or using their chell phones on "your" time (which is a kind of silly concept, I think) isn't just that you're not a tyrant, it's that you're not stupid enough to waste your time on such silly rules. Your employees wouldn't be any more productive for you if you did and I think you know that.
May 11, 2009 6:19 PM | Reply | Permalink
It would depend on how much time they spent doing it... I have had to ask an employee to hang up their phone because we had 4 or 5 people waiting for their Rx's.
I don't think it's a "silly concept" at all to call it "my time". An employee agrees to work for an employer and most of the time it's "At Will" employment. This means the employee can quit at any time for any reason OR for NO reason. It also means that an employer can fire an employee at any time for any reason OR for NO reason... (except race, religion, etc...).
When an employee is "on the clock", they are getting paid to do a certain job. If they are chatting on their cell phone or texting a friend, they are not working for their money - they are goofing off and still getting paid. The fact is: It is my business, and I have to pay for the TIME and services that people work for me. I'm literally paying for "time"... therefore it's my time to do with as I see fit... which is: running my business, in this case.
An employer has every right to expect his/her employees to be working if they are on the clock... They have every right to expect their employees are not wasting company resources... It's the employers job to make sure that company remains open so the jobs remain... If the company is losing money because employees are stealing money, merchandise, goofin' off (lost revenue), etc... then there might not be a company tomorrow.
Good management knows how to strike a balance of productivity and morale. Poor management doesn't.
There are all kinds of rules and practices wrt employee use of company time, and often more importantly, RESOURCES. I have worked for places that forbid me from discussing ANYTHING I did for a period of 10 years AFTER my employment ended.
Also, IF a person comes up with a great idea... and they did it because of information learned at "work"... and they were aided in any way by the resources available at "work"... then that idea belongs to the Company (many times). It's generally thought that the person wouldn't have had the idea unless the Company provided the necessary information and resources to make it happen. Kooky, huh?
Anyway... I'm way off track here.... sorry about that...
The point I was really trying to make in my first post is: While I agree that Employers stealing from employees is deplorable and needs to be dealt with, it's important to remember employees steal from employers, too.
May 12, 2009 12:11 PM | Reply | Permalink
Re: But, truth be told, I am paying them to do this
Are you paying them for their time or for their work? Maybe you should look at it as the latter and not worry about the time so much as long as the wok gets done.
May 12, 2009 7:56 PM | Reply | Permalink
I suppose it would depend on the work they're expected to do. If they have a quota, for example, and they meet it... no problem. If, as in my case, we fill Rx's as they come in... then I need them to work when there are Rx's to be filled. (They don't always get to work... sometimes they continue checking email, or whatever... That's a problem for me... AND THE PATIENT). But if there are no Rx's to be filled, no clean up to be done, no re-stocking, no order's to check in, no accounts to be reviewed...etc... then, sure, take a break... I don't care.
But if their job doesn't have a quota... if their job ALWAYS has something that needs to be done (If you've got time to lean, you've got time to clean...), then employee's should be working.
Full Disclosure: I started working when I was 15 years old (painting houses). I have continued to work EVERY DAY since... In 15 years I only missed 2 days of work and took only 5 weeks vacation in total!!! Even though I own a pharmacy now, I continue to work in it all day, every day (9 hour day). I take out the trash and fill the Rx's and take care of accounts and inventory... AND!!! I get to deal with lawyers and bankers, too (something the employees don't have to do). i.e. I have been, and remain, a worker/employee.
Maybe I'm just a good little slave... but whoever I've worked for along the way, I've given them 100% while I was in their employ. I steadfastly did NOT talk use company material for personal gain... I didn't so much as receive external email (only internal)... I think I'd be perfectly within bounds if I were to say to my employees, "You are not allowed to do any of these things."
Why? Because I'm not asking them to do anything that I haven't done myself. I didn't necessarily like it, but I did it.
Times have changed, however, and here I sit at my work computer typing this response in front of my employees... I can't, with a clear conscience, tell them they can't use the internet. It's true that I do own all the computers and pay for the internet access (they don't (own it)... So it's not all about "time"... it's about resources, too. Those resources are owned and controlled by the company) and I can control how my property is used... but I choose to be "fair" about it.
But a company can absolutely control everything within it... How they choose to control it (what management styles, etc...). The better the implementation of good plans and management, the better the company will do... In my experience, it is best to see the "Work" that is done (not the time so much)... and it's good to have employees who enjoy their work environment, rather than resent it. Some liberties at work go a long way to help create that environment. :)
May 13, 2009 9:57 AM | Reply | Permalink
Elizabeth Warren has a nice piece on bankruptcy reform as theft from workers and 401k's as, originally, a tax dodge for very wealthy executives.
Before I read it I was uneasy with Obama's settlement with Chrysler (putting junior creditors ahead of the senior secured), but now I look at it as payback...or return to a more equitable balance.
May 11, 2009 4:21 PM | Reply | Permalink
. . . the best efforts on the part of the worker centers to work with the Department of Labor . . . .
I guess my first question would be -- Why weren't your "worker centers" dealing with the appropriate state Wage and Hour Divisions?
Excepting special cases of very large cross-state employers (Wal-Mart, for example) it seems to me that the Feds should be monitoring the states' compliance with federal law; they should not be dealing (investigating or negotiating) directly with employers.
So -- what's the answer?
May 11, 2009 10:20 PM | Reply | Permalink
Wage theft isn't just a phenomenon restricted to the hourly-wage class. I've been a field engineer for quite a number of years and I've noticed a trend where employers hire employees within a local area instead of drawing on the national talent pool. The problem with local hiring is almost all lack the fundamentals necessary to preform the tasks and show little inclination to learn more than just the rudimentary skills necessary to complete a task - they can successfully complete a task they've been taught, but have no idea where to begin when confronted with a task that someone hasn't shown them what steps to perform. The main reason why local hires are sought is they are more than willing to accept whatever salary and compensation packaged offered. And that package is normally cut is half to almost two-thirds of the going salaries and compensation packages. That means what monies the new employees don't negotiate become profit and acts as an incentive for management to seek out more workers willing to work for less. In short, the low wage salary employees are nothing more than warm bodies being used as placeholders. As long as the equipment under contract does not break and/or outages are minimized both management and employees are happy. If this tend keeps going, before long everything will be working on a wing and a prayer because those of us who do know what to do will be on the outside looking in. Wage theft is a two-edged sword that cuts both ways neither of which is good.
May 12, 2009 11:05 AM | Reply | Permalink
I'm not sure I understand your complaint.
The business makes it's own decisions... it does what it thinks is in it's best interest - even if you disagree with it.
You may be absolutely correct in your analysis of what's going on... If so, then one could expect the company to go under in time.
It could be that you don't really understand that company's business model as well as you think you do... and that company will still be around 100 years hence.
May 12, 2009 12:17 PM | Reply | Permalink
Of course, us little people don't need to be told about this. We are quite familiar with how it all works. I applaud you for trying to put this morally shameful problem in the public light though. Of course, our esteemed leaders will no doubt probably not be able to move forward on this until they have addressed the problem of the "underground" economy. One has to laugh bitterly when considering how fundamentally corrupt this nation has become.
May 12, 2009 11:28 AM | Reply | Permalink
Word.
May 12, 2009 12:19 PM | Reply | Permalink
I am missing two things here:
(1) What is the fundamental methodology by which the "estimates" of "billions" of dollars being owed but not paid (which seems to me slightly different than "theft") to "untold millions" of workers are arrived at?
I am in no doubt that the problem is large and serious, but it seems to me that progress in solving it will depend upon having solid and fairly transparent tools for measuring the quantitative scope of this UNDERPAYMENT and how it might vary over time and place and industry and circumstance.
(2) A soul-searching analysis about labor reform or "ethical business" seems to me marginal at best in terms of developing solutions. We have had clear laws in place for a long time mandating overtime premiums and minimum hourly wages. Clearly, the nub of problem must lie in ENFORCEMENT of existing laws, not in the underdevelopment of more complex new laws. What are the issues there? Which governmental entities are not doing their jobs at enforcement, or are underfunded or otherwise hampered? How to best fix that?
I suppose some of this is addressed in odd passages of the book, but for those of us without time to read it, how about a short sketch?
May 12, 2009 11:32 AM | Reply | Permalink
Well said.
May 12, 2009 12:20 PM | Reply | Permalink
What about salaried workers who are handed 14 hours of work and generously allowed to go home after 10 if they manage to accomplish 12 hours worth?
May 13, 2009 2:58 AM | Reply | Permalink
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