Nik Theodore from the Department of Urban Planning and Policy of the University of Illinois at Chicago writes about the problem of wage theft in the United States.
Ana worked for five years for a cleaning company in Chicago, where she was paid $8 an hour, even for overtime hours. “One time I worked for 22 hours in a row and was paid only $120, Ana explained. “My boss told me that was all he could give me.” She is owed about $1,800 from bounced checks, plus wages she should have received if her employer had abided by overtime laws. She was fired from her cleaning job after she developed carpal tunnel syndrome. Ana says the debilitating injury was caused by the strenuous work she had been doing: “I got carpal tunnel in my hands from the repetitive motion. I went to Cook County Hospital and I covered my medical expenses. But I couldn’t afford to go to therapy. I fell behind on my school payments, and now I even owe the [Internal Revenue Service] because my employer was not deducting money from my check.”
Ana is not alone in experiencing these types of workplace violations. Increasingly, it is clear that there has been a breakdown in the enforcement of core employment and labor laws in Chicago and other major US cities. Employers must pay workers at least the minimum wage, and time and a half for overtime. They must follow regulations to protect workers’ health and safety, and carry workers’ compensation insurance to cover on-the-job injuries. They may not discriminate against workers on the basis of age, race, religion, national origin, gender, sexual orientation or disability. And they must respect workers’ right to organize and bring complaints about working conditions. Yet there is growing evidence that employers are evading these bedrock labor standards.
A study of workplace violations in Chicago, Los Angeles and New York City (http://www.unprotectedworkers.org/index.php/broken_laws/index) found evidence of widespread violations among workers employed in low-wage industries. In the Chicago area, the nonpayment and underpayment of wages take a heavy monetary toll on workers and their families (http://www.ndlon.org/en/resources/item/412-unregulated-work). For those workers who experienced a pay‐based violation in the previous week, the average amount of lost wages was $50, out of average weekly earnings of $322. This amounts to wage theft of 16 percent. Assuming a full‐year work schedule, it is estimated that these workers lost an average of $2,595 annually due to workplace violations, out of total annual earnings of just $16,753.
Furthermore, it is estimated that in a given week, approximately 146,300 workers in Chicago and suburban Cook County experience at least one pay‐based violation. Extrapolating from this figure, front‐line workers in low‐wage industries lose more than $7.3 million per week as a result of employment and labor law violations.
Wage theft not only depresses the already meager earnings of low‐wage workers, it also adversely impacts their communities and local economies. Low‐income families spend the large majority of their earnings on basic necessities, such as food, clothing and housing. Their expenditures circulate through local economies, supporting businesses and jobs. Wage theft robs local communities of a significant portion of this spending, and it ultimately limits economic growth.
Kim Bobo has correctly referred to wage theft as the “crime wave no one talks about.” It is high time that policymakers confront labor standards violations and their detrimental impacts on families and local communities. The policy agenda must include updating employment laws so that they apply to 21st Century workplaces and employment arrangements, redoubling enforcement efforts to strengthen the effectiveness of laws that are on the books, and ultimately devising strategies to hold employers responsible for the workplace conditions under their control.