A few weeks ago, I finished reading Kim Bobo’s Wage Theft in America (published last year, but new to me). The title is self-explanatory, and the author is the founder of Interfaith Worker Justice, an organization that has advocated and organized tirelessly to ensure workers’ rights are fulfilled. The facts she presents in the book are stunning- depending on the low-wage industry, most employers have committed wage theft (around 60% in nursing homes, 100% of poultry plants). Total theft is measured in the billions. Wages are stolen in a variety of ways- simply paying below the minimum wage, forcing workers to work off the clock, not paying overtime, and others. Workers who have wages stolen are disproportionally female, minority, and immigrant. Those with the least power in society, and already limited means, have their hard-earned money taken from them. The employers, on the other hand, face weak penalties (they merely have to pay, with interest, the wages they’ve stolen), and enforcement is weak.
Abstracting from these important details, Bobo’s book ulimately reads as an account of economic power and political economy. At the micro-level, employees who fear for there jobs are intimidated to not speak up about wage theft. Only when these workers are made aware of the laws by organizations like Bobo’s are these injustices addressed. At the macro-level, business has effectively neutered the Department of Labor, labor unions, and any political will to address these issues. Hilda Solis is certainly a vast improvement from Elaine Chao, but she’s no Frances Perkins, the New Deal Secretary whose strength and effectiveness Bobo extols. Why don’t we have a Frances Perkins, and a suitable budget in this area? The power of employer communities clearly matters here.
This problem is one that should provoke immediate outrage, even (and I’d argue especially) among free-market proponents. This is a perfect example of cheating, a place where the government must step in to ensure that the at least the exchange of labor for money occurs fairly, lest the very foundations of capitalist labor exchange crumble. On this basis, it seems that Bobo is hoping to organize a movement, and use the labor consciousness of that movement to score further gains for labor. Employers, by lobbying through means like the chamber of commerce, and by imposing their will through managers in breakrooms, represent a real power. Effective organizing and education could theoretically build a movement to counteract that power, generate political will for stronger labor laws and enforcement, and ultimately lead to more just remuneration. This process takes time, but Bobo lays out the blueprint for what a revitalized Department of Labor would look like, and how we can organize to get there. If such a movement could score further victories for workers, like expanded union representation and more widespread living wages, even better. Wage theft, I’m sure Bobo hopes, could be a unifying issue to serve as the entry point for these other gains, all working inside the current capitalist system.
Of course, if the root problem is employer power, the other alternative is to take the power directly from the employers and give it to the employees. Cooperatives like Mondragon are proliferating. Capitalist bankruptcies allow opportunities for worker expropriations, as seen in The Take. Rather than hoping for a series of band-aid wins, this approach would, workplace by workplace, ensure that employees would receive fair wages and then some, as they would make the decisions. This is much more difficult, because it entails bringing about an entirely new economic system, piece by piece. For more on what this looks like, see previous posts on cooperatives.
Either way though, the symptom of wage theft is widespread, obvious, and morally flagrant. The root problem is employer power, and the solution is either to counteract the power, or take it away entirely. These movements can certainly be paired- more labor consciousness is needed if we hope to proliferate co-ops, and realization of concrete alternatives is necessary to generate political will for legislative and enforcement reform. The losses of labor after its New Deal gains should clearly demonstrate which solution is sustainable in the long term. A different type of labor and remuneration, though, is possible. Bobo’s effort to raise awareness of these basic power dynamics is a good start.
(Thanks to ZL for some helpful comments.)
After the class warfare anger cools down, comes the reality. Perhaps the simplest approach to addressing the “theft” problem has been the minimum wage.
Nearly every “solution,” incorporates some variation of the minimum wage. Even (or especially) where employers pay it, has it worked? Or has it encouraged mechanization or otherwise cut into the number of employees hired?
The bottom line is this: The bottom line.
Where there is a profit motive, employers will try to minimize payroll. Where there is no profit motive, employers will tend to maximize payroll. This is why federal employees make more than similarly titled private employees.
Does this mean the government should take over business? Are we back to Marxian philosophy, here?
Rodger Malcolm Mitchell
I’m not advocating for the government to take over anything- the only role for the government is to enforce the laws it has on the books. Perhaps you’re misinterpreting what I call “wage theft”- refusing to pay worker’s at the agreed upon wage for the hours they actually work, per current legal standards. If you’d like to defend that practice, by all means. You’ll receive no sympathy for it here, though, however much it may hurt businesses to fulfill their basic obligations.
Nick, you said, ” . . .the only role for the government is to enforce the laws it has on the books.”
But you also said “. . . generate political will for stronger labor laws and enforcement, and ultimately lead to more just remuneration. [...] If such a movement could score further victories for workers, like expanded union representation and more widespread living wages . . .”
Taken as a whole, your post asks for more power (and higher wages) to the people. In short, you seem to be stumping for much more than the innocent sounding “enforce the laws it has on the books.”
Rodger Malcolm Mitchell
Yes, but if such gains are won, it won’t be because “the government” has done anything, but because a strong enough organization has been built to demand it. The failure of EFCA shows clearly that merely top-organized interests can really win anything, just by asking Congress or the President nicely to pass something. The government, by it’s own volition, should enforce its laws. Everything else would have to be forced from below (not in the militant sense).
Are you saying, the government should enforce its laws, but additionally, the laws the government enforces should call for higher wages? Said plainly, you want the government to make sure workers are paid more. Isn’t that true?
It sounds like you’ve returned to what I said earlier: “Nearly every ‘solution,’ incorporates some variation of the minimum wage. Even (or especially) where employers pay it, has it worked? Or has it encouraged mechanization or otherwise cut into the number of employees hired?”
Rodger Malcolm Mitchell
Cobwebs here. Well, yes, many of the solutions, however arrived, will look something like the minimum wage. Higher minimum wages, though, seem to pale in comparison to the other forces leading to increased mechanization/off-shoring. You’ll disagree, I;m sure. We also disagree on the viability/virtue of the cooperative model, but I much prefer that as the path forward.
There seems to be a fundamental belief among some groups, that what is good for consumers is bad for workers.
Machines to increase efficiency? Bad. They replace workers.
Increased productivity? Bad. It requires fewer workers.
Increased imports? Bad. They replace workers.
If we import something, it’s because that something is better and/or cheaper than something made here, which is good for consumers.
Without machines, improved productivity and imports, prices would be higher and quality lower. So, why all the sympathy for workers and no concern for consumers?
As for preferring communism, it’s a nice theory, so long as no one has ambitions. Bees and ants are quite good at it. Even small groups of people can make it work. But entire nations? Not so good. Humans aren’t wired that way.
Rodger Malcolm Mitchell
The biggest fault I see with mainstream economics is the limiting of forces to either market or government. If there is a problem with the market, government is the only solution, and vice versa. There is never any mention of communities (whether they be unions, interfaith worker groups, neighbors), and the interactions they can have with both government and markets. They can have a role in solving wage theft too. Although it does not fit anywhere in the world of an economic text book, our economics debates can overcome such an invidious blindness.
Good way of putting it.
Kasey, you may be correct, but I don’t see a recommendation for a solution in there. What would you actually do to solve the problem?
Actually, from my perspective, the biggest fault with mainstream economics is the failure to understand the implications of “monetarily sovereign.” What would (do) I do? Try to teach it.
Rodger Malcolm Mitchell
[In response to Lasey Dufresne]
The role of communities is considered in Recasting Egalitarianism: New Rules for Communities, States and Market by Samuel Bowles and Herbert Gintis (published by Verso (in London (UK) and New York, in 1998).
Not that one book suffices.