What Don't Corporate Executives Understand About "Thou Shalt Not Steal?"
Many of this week's posts about Kim Bobo's impressive book, Wage Theft, have understandably focused on the importance of increasing regulation to stop such theft. Indeed, the importance of stepped-up regulation seems clear, considering all the problems that the G.A.O. found in the Bush Labor Department.
A G.A.O. study released in March found that the department's Wage and Hour Division had mishandled 9 of the 10 cases brought by a team of undercover agents posing as aggrieved workers. In the most egregious case, wage and hour officials failed to investigate a complaint that under-aged children in California were working at a meatpacking plant, not only during school hours, but with dangerous machinery. And when an undercover agent posing as a dishwasher called four times to complain about not being paid any overtime for 19 weeks, the division's Miami office failed to return his calls for four months, and when it finally did, an official told him it would take 8 to 10 months to begin investigating his case.
After such failures, Labor Secretary Hilda Solis has vowed to improve enforcement. It is important to remember, however, that more than increased enforcement is needed to combat wage theft. We also need a change in corporate attitudes. In interviews I've done for The New York Times and for my book, The Big Squeeze, several line managers told me they engaged in wage theft because senior executives put such fierce pressures on them to minimize costs, often warning them of dire consequences if they and their stores exceeded assigned payroll.
Robert Eckert, a former assistant store manager at several Wal-Marts in California, said: "They tell you that working off the clock is against the law, is not allowed by Wal-Mart, and then they tell you to get the job done. But they didn't give you the budget to get the job done. It is clearly understood that if you don't make payroll, it's a serious issue and you can lose your job over it."
To reduce wage theft will require top executives at many companies to stop placing such intense pressures on line managers like Eckert to run their stores with rock-bottom payrolls. Moreover, many companies have, perhaps unwittingly, created incentives that encourage managers to perpetrate wage theft. Many companies tell store managers and restaurant managers that if you maximize profits at your establishment, if you spend less on payroll than you're assigned, your annual bonus will soar and you might win that coveted promotion a year or two sooner. Again, line managers told me that this mixture of pressures and incentives persuaded them to do illegal things they regretted, like forcing employees to work off the clock or going into the computer and erasing hours that employees had worked.
Corporations need to readjust their incentive structures. They also need to make sure that incentives to lawbreaking are far outweighed by disincentives, such as warnings of stern punishment and being aggressive about firing any managers found guilty of wage theft.
The nation rightly denounced Enron, WorldCom and Tyco for cheating their investors, many of whom were millionaires. In my view, it is a far worse offense for managers at major corporations to cheat workers who earn just $16,000 or $18,000 a year. Corporations and their senior executives need to take wage theft seriously. They need to stop turning a blind eye to this practice, and they need to heed the first four words of Kim Bobo's book, "Thou shalt not steal."
This whole "debate" is a bit like a now-forgotten conversation about "why do they hate us".
At that time, a few people wanted to address the root cause of the problem instead of solely focusing on agressive policing of the consequences.
Same here. If wage theft is such a common widespread evil, either you learn why they do it or you close your eyes to anything except more enforcement.
Liberals' policy on labor is a spitting image of the neocon foreign policy. Tough talk, zero compromise and class warfare.
"The rich are not human. They are animals in human form". Right?
May 15, 2009 10:10 AM | Reply | Permalink
You seem to labor under the common delusion that American business has something to do with being honest and/or ethical. The thorough corruption of the business world was accomplished long ago and "stealing" as you, or any normal person would see it, is par for the course. The only thing that matters is the money you manage to accumulate. How you do that is of no consequence to these people. And the only rule is "don't get caught". It is because of their affinity for this rule that Republicans and big business people get along so well and understand eachother so well. Sadly, more and more Democrats are gravitating toward this rule as well.
Yes, there are a small handful of prominent business leaders who are not amoral, unethical creeps but precious few. That is why regulation is so necessary. They cannot be trusted not to steal. Just look at our economy right now. America is on it's knees and may never get back up thanks to fraud, theft, lies, corruption, greed and a total lack of ethics in the business world. It's genuinely disgusting.
May 15, 2009 10:15 AM | Reply | Permalink
""The rich are not human. They are animals in human form".
- Hugo Chavez, May 2009
May 15, 2009 10:23 AM | Reply | Permalink
You don't know what you're talking about... not unusual.
May 15, 2009 10:49 AM | Reply | Permalink
oleeb -
Isn't the point of this book that these practices are far more widespread than anyone has thought about recently? How "precious few" is it?
May 15, 2009 11:49 AM | Reply | Permalink
Corporations and their senior executives need to . . . They need to stop turning a blind eye . . .they need to heed . . . .
Bobo, Greenhouse and Clark -- three namby-pamby jerks looking for a backbone.
May 15, 2009 1:06 PM | Reply | Permalink
Whatever the merits of the book itself, the discussion of it here is lame.
If you have $10 and I, for no good reason and without your informed consent, take $5 away from you, that is THEFT.
If I owe you $10 and I, for no good reason and without your informed consent, pay you only $5, that is CHEATING.
Why must the English language be so incessantly and carelessly abused?
It reminds me of the run-up to and early months of the cocked-up Iraq invasion of 2003 (which was not and never has been a real "war" despite Karl Rove et. al. deeming it such and the "progressive left" following like sheep). Instead of focusing on the blatant ineptitude of the administration in rushing recklessly into a quagmire, instead of taking a hard look at the massive cowardice of Democrats in Congress giving a blank check for such foolhardiness, we got book after book about how Bush was "lying". As if he didn't say in all but carved stone that he and his chickenhawks would throw troops into Iraq, the lack of any plan, basic common sense, American tradition, and world public opinion be damned.
I am sick of these semantic charades. If calling underpayment of workers "theft" makes some people feel good, let them find some other means of self-gratification instead, and leave public discourse to other people who want to CLEARLY UNDERSTAND America's problems and actually DO something about them.
May 15, 2009 1:10 PM | Reply | Permalink
If I go into a restaurant and order $50 worth of food, and eat it, then put $10 on the table and walk out, the restaurant isn't going to have me arrested for CHEATING. It's going to have me arrested for theft. If I sit behind a desk in an office and order up $500 worth of work, watch it done, and then put down only $250 and tell the worker to shove off, what is that but theft. I've consumed something and refused to pay for it, and the nature of the something doesn't change what's happened.
May 15, 2009 3:48 PM | Reply | Permalink
This is yet another in a long line of reasons why we need the Employee Free Choice Act.
May 15, 2009 3:36 PM | Reply | Permalink
This is just the tip of the iceberg. I've no doubt that the financial meltdown we have experienced has a lot to do with financial shenanigans that would probably fall under a lot of people's idea of theft.
And how does one explain the fact that Wall Street profits and incomes boomed (almost doubled) like crazy from the mid to late nineties through 2008 but regular working folks saw their retirement 401K investments remain flat across the same period. Or why has only the top of the heap shown income growth in the same period? Or why has there been so many investigations of government officials accused of fraudulaent activity of late?
The theft going on is huge and very widespread. The victims are generally regular working class citizens who have no voice and no means to stop it. And our government is very much a party to it.
May 15, 2009 4:24 PM | Reply | Permalink
Finally--some serious comments here! We know why employers steal wages--it's in their interest and very hard to counteract. Enforcement, serious consequences, and increased workers' rights are obviously essential.
May 15, 2009 4:31 PM | Reply | Permalink
Corporate execs understand very very well about "wage theft." As Marx demonstrated most of 150 years ago, profit under capitalism derives from unpaid labor, the difference between the going wage and the actual value that workers contribute to the product. Of course, capitalists try to increase that unpaid portion (relative to the paid part) by a variety of schemes, including outright cheating, which is what Bobo's book apparently speaks to (they also often try to increase it by skimping on the quality of materials, but that's a different issue). However, that add-on which Bobo writes about and probably most of us have experienced, however heinous, should not be confused with the main deal, control over unpaid labor for the purpose of accumulating capital.
May 15, 2009 4:43 PM | Reply | Permalink
These so very substantiated non-rhetorical Proudhonian insights explain why, when the Berlin Wall was torn down, exploited workers flooded eastward to the socialist paradise, while joyful unchained proletarians in Dusseldorf and Munich pocketed the means of production that had been thieved from them, and worshipfully erected statues to the Great Marx across the former capitalist plunder state of West Germany.
May 15, 2009 6:28 PM | Reply | Permalink
Ah, the simple-minded equivocation that since totalitarian communism was so repugnant, then anarchic capitalism must be milk and honey. All black and white, no grey needed in your worldview, right PTroub?
PS- West Germany is pretty much is/was socialist-style democracy compared to the US.
May 17, 2009 3:32 PM | Reply | Permalink
"All black and white, no grey needed in your worldview, right PTroub?"
Of course not, but in Proudhon's and romath's worldviews, perhaps.
How long have you been beating your wife?
May 17, 2009 5:13 PM | Reply | Permalink
Moreover, many companies have, perhaps unwittingly, created incentives that encourage managers to perpetrate wage theft.
Perhaps unwittingly!
That's adorable.
May 15, 2009 4:46 PM | Reply | Permalink
"Moreover, many companies have, perhaps unwittingly, created incentives that encourage managers to perpetrate wage theft."
Unwittingly? ROTFLMAO.
A corporation's only duty is to maximize return to their shareholders. Ergo, the only way to stop wage theft is to make it more expensive via large fines.
That is the only way to change "corporate culture." The ONLY way.
May 16, 2009 3:09 AM | Reply | Permalink
Instead of a minimum wage law, there should be a voluntary maximum spread law. Total annual compensation should be capped at 200,000 times the lowest-paid employee's hourly wage. If the wage floor is $5/hr, the ceiling would be $1 million.
Entities that reject the maximum spread should be forced to compete in a truly free market. They should be ineligible to incorporate in the United States or hold intellectual property in the United States. No limited liability. No Chapter Eleven bankruptcy protection. No patents. No trademarks. No copyrights.
May 16, 2009 12:58 PM | Reply | Permalink