Wage theft and other abuses don’t just happen at Wal-Mart and to illegal immigrants, according to an early write-up in NYT of a study released today. The study itself appears to be an impressive collaboration of university centers, foundations, et al. (and most of the authors appear to be sociologists). Here’s the lede:
Low-wage workers are routinely denied proper overtime pay and are often paid less than the minimum wage, according to a new study…
The study, the most comprehensive examination of wage-law violations in a decade, also found that 68 percent of the workers interviewed had experienced at least one pay-related violation in the previous work week.
The results are staggering, given that over 4,000 workers were surveyed. The losses from the cheating practices?
in various low-wage industries, including apparel manufacturing, child care and discount retailing, the researchers found that the typical worker had lost $51 the previous week through wage violations, out of average weekly earnings of $339. That translates into a 15 percent loss in pay.
The article enumerates a number of other staggering findings:
The study found that 26 percent of the workers had been paid less than the minimum wage the week before being surveyed and that one in seven had worked off the clock the previous week. In addition, 76 percent of those who had worked overtime the week before were not paid their proper overtime, the researchers found.
A year ago, I wonder how our “labor” secretary would have responded to such a report. Now, we have a real one, in Hilda Solis:
Labor Secretary Hilda L. Solis responded to the report with an e-mail statement, saying, “There is no excuse for the disregard of federal labor standards — especially those designed to protect the neediest among us.” Ms. Solis said she was in the process of hiring 250 more wage-and-hour investigators. “Today’s report clearly shows we still have a major task before us,” she said.
One author of the study puts the macro implications of the study in perspective:
“These practices are not just morally reprehensible, but they’re bad for the economy,” said Annette Bernhardt, an author of the study and policy co-director of the National Employment Law Project. “When unscrupulous employers break the law, they’re robbing families of money to put food on the table, they’re robbing communities of spending power and they’re robbing governments of vital tax revenues.”
Stuff like this reminds me of my research findings in Uganda, where the Ministry of Labor is underfunded and cannot hire the investigators to enforce laws on wages, safety, and the rest. But this is America, you say. Well, these results should not be surprising in a class society, in which the capitalist class has immense power over the working class (but can’t they just quit, you say?).
Steps like increased government enforcement and even increased unionization will certainly ameliorate these problems. Nevertheless, a capitalist economy always provides incentives for capitalists to find ways around whatever institutions are in place. It will be interesting to see in the coming days who reacts to this by saying “let it bleed,” who slaps a band-aid on top, and who recommends surgery.