(Reposted from Open Left)

Wage Theft Is Rampant-Estimated at Roughly $2.9 Billion Annually

Last week I wrote a diary on a new report about widespread wage theft among low-income workers, “”Broken Laws, Unprotected Workers””.  I said that I was working on an article for Random Lengths News.  It was published on Thursday, and I’m republishing here below.

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Property crime is a serious concern in America today.  In 2007, the total dollar value of all property officially reported stolen in California-population about 38 million-was just over $2.8 billion, almost half of which was motor vehicle theft. The rest came to $1.47 billion.  Of that $2.8 billion close to one-third of it was recovered-$912 million.

But a new report indicates that these statistics are woefully incomplete.  “Broken Laws, Unprotected Workers” finds that wage theft is rampant among the bottom 15 percent of the workforce, and so widespread that workers in just three cities-Los Angeles, Chicago and New York City (total population about 15 million)-had roughly $2.9 billion in wages stolen from them in 2008, a rate more than double that of reported theft in California.  As for recovering any of it, workers were more likely to get fired for asking than ever seeing a dime of what had been stolen from them.

“The reason we did this study, we were running to into this in our qualitative work,” said Ruth Milkman, a professor of sociology at UCLA who was one of eleven co-authors of the report. “My collaborators had all encountered this,” she said, “But nobody really knew how common it was.  We thought, wow, we could really figure this out.”

Paul Rosenberg :: Robbed On The Job

The study involved a representative survey of 4,387 workers, who were robbed in various different ways.  More than two-thirds-68 percent-experienced at least one pay-related violation the previous work week. The average stolen was $51-bad enough for anyone. But these are the lowest-paid workers in the economy.”Their average earnings for a week were $339,” said Milkman. “The amount lost was 15 percent.”

This equals an average yearly loss of $2,634 out of $17,616. The report estimates that over 1.1 million workers are affected. But they weren’t the only ones hurt, Milkman noted. “If these people were being fully paid, they would spend it locally and local businesses and communities would benefit,” she pointed out.”  What’s more, she added, it also hurts companies that are obeying the law, and paying workers what they’re owed, making it harder for them to compete with lawbreakers.

Breaking the violations down, the report found that 26 percent of those surveyed were paid less than the minimum wage the previous work week. Of those, 60 percent were robbed of more than $1 per hour.  Over one quarter worked more than 40 hours the previous week, of which 76 percent were robbed of legally required overtime pay. On average, this amounted to 11 hours of overtime “either underpaid or not paid at all.”

Additionally, almost 40 percent of those surveyed worked off the clock-either before or after their paid shift. Of these 70 percent were not paid for their extra work.

Milkman cites one example of a nurse’s aide she interviewed. “She told me that over and over again she would clock out for the day, and then the supervisor would say, ‘Maria, could you check in on so-and-do in Room 23?'”

Adding insult to injury is the feeling of helplessness. “She didn’t feel she could do anything about it,” Milkman said.

That feeling is common among crime victims-but how many other sorts of crime victims are victimized day after day, week after week? And what does it means to be robbed by someone you interact with every day?  What does this do corrode people’s determination and belief in the American dream?

“Great question,” Milkman responded, “But not one we tried to probe, so I can’t presume to comment.”

Tipped jobs not only suffered sub-standard pay-30 percent were paid less than the tipped worker minimum wage-but also theft of their tips-which was reported by 12 percent of tipped workers.

In a country where crime stories pepper the local tv news every night, it’s astonishing that such a massive crime wave has been going on, virtually undetected right under our noses. One reason for this is what happens to the victims if they try to complain. According to the report, one in five workers reported trying to complain to their employer, or trying to form a union in past year. For their troubles, “43 percent experienced one or more forms of illegal retaliation from their employer or supervisor.” These included suspensions or firing, threats to cut hours or pay, and threats to call immigration.

“One case that really affected me involved a woman, a housekeeper in a hotel chain, well-know, but I can’t say which one, in the Valley,” Milkman recalled. “She cleaned rooms in the hotel. She was undocumented. She received her pay in cash. She wasn’t paid even minimum wage.  She worked over 40 hours a week.  Finally, she complained to the supervisor and was told they didn’t need her the next week. She was fired.”  But there was more. “This is also a tale about tip work,” Milkman explained. “When she got done cleaning, the supervisor would go into the rooms before she returned, to steal her tips.”

“I was in tears when I heard that,” Milkman said.

There are things that can be done, and the report cites three principles that it says “should drive the development of a new policy agenda to protect the rights of workers.” First is to strengthen enforcement of existing labor laws, both by increased staffing and by new enforcement strategies.  Second is updating legal standards for today’s labor market-including strengthening the right to organize. Third is to establish equal status for immigrants in the workplace.

Now that the problem is known, action is possible-but not guaranteed.  Labor Secretary Hilda Solis has promised increased enforcement, Milkman noted, but that’s only one part of the solution. Key to a full solution is public sentiment and political will.

“The danger with this is, this is a new enough phenomena that people are horrified when they hear about it,” Milkman said. “But the real danger is that it becomes a part of the economic landscape,” she cautioned. “Now the question is what are we going to do about it?”

There is a real danger that it could become something that we simply accept, she warned  And here Milkman drew an analogy to the emergence of mass homelessness in the early Reagan era.  “When it first started, there was a lot of distress and intense discussion and debate about it, and now we take it for granted. It’s like we live in India.”

The hope is that times are different now, and the direction of the economy can change.

“These laws were put in place when the economy changed directions during the Great Depression,” Milkman said. “We have an opportunity, with the Obama Administration, to change directions again.”

“But it’s not just going to happen,” she warned. “People have to push for it.

About the Author: Paul Rosenberg is progressive activist and journalist who is a frontpage blogger for OpenLeft.org and Senior Editor for Random Lengths News, an alternative bi-weekly in the Los Angeles Harbor Area, where he specializes in labor, community and environmental justice issues. From his anti-war and civil rights activism as a teenager in the 1960s, through his involvement in food co-ops in the 1970s, to his Central American solidarity work, media and renters’ rights activism in the 1980s, and beyond, he has focused his energy primarily on issue activism, with increasing attention to media from the mid-1980s on. He began working as a freelance journalist with a primary focus on op-eds and book reviews in 1994, and joined Random Lengths News in 2002. He’s been published in the Progressive magazine, Publishers Weekly, the LA Times, Christian Science Monitor, and Dallas Morning News.

This article originally appeared in Open Left and Random Lengths News on September 27. 2009. Re-printed with permission from the author.