Wage Theft in America
By Kim Bobo
Paperback: 421 pages
Publisher: New Press (2009)
ISBN-10: 1595584455
ISBN-13: 978-1595584458
In her book, Wage Theft in America, labor activist Kim Bobo illuminates on a crisis, the immensity of which is probably largely unknown. The crisis is one of wage theft in the United States. Wage theft is the non-payment of money legally owed to workers. However, as Bobo posits, it is not only workers that suffer from wage theft; society as a whole suffers. Scrupulous employers who pay workers what they are legally entitled are competitively disadvantaged by derelict employers, and this has a knock-on effect in the employment world.
Many of the wage thieves are large, well-known corporations. Wal-Mart and McDonald’s are among them, but also federal, state, and local governments are implicated, as well as small businesses. Appendix A in Wage Theft in America lists numerous companies forced to settle with workers deprived of wages.
Wage theft includes workers are not being paid or only being paid partially, being denied overtime pay, being hit with illegal deductions. Bobo states that deductions may not bring a worker below minimum wage.
Although wage theft also affects middle-class workers, Bobo is most concerned with wage theft from poorly paid workers who are already struggling. The wage theft is widespread, and Bobo examines the plight of workers in construction, garment factories, nursing homes, farming, poultry, and restaurants. In particular, Bobo singles out day laborers who she describes as “among the poorest of the poor … routinely being cheated out of wages.”
Wage theft is either intentional by employers or happens through lack of a system to guard against wage theft. Bobo cites:
- Paying for fewer hours than those worked
- Paychecks that bounce
- Not paying overtime
- Paying by day or job
- Making workers pay for a job
- Paying below the prevailing wage
- Illegal deductions from paychecks
- Stealing tips from workers
- Not paying workers at all
- Not paying last paychecks
- Misclassifying workers as “independent contractors.”
Bobo writes that millions of workers are not paid overtime who have earned it; one artifice in this fraud is misclassification of workers as “exempt” from receiving overtime pay. Bobo relates the case of cook Jose who worked 80 hours a week in two different restaurants owned by the same boss who paid him separately 40 hours twice to avoid overtime. Jose recovered $6701 in unpaid overtime with the help of Madison Worker Rights Center.
Bobo tells of a Chicago car wash that charged workers merely for the right to dry cars with rags and collect hoped-for tips.
Misclassifying workers leads to many problems, such as workplace safety, the owner skipping on paying payroll taxes, unemployment insurance, Worker’s compensation coverage, overtime pay, and the owner denying worker’s compensation.
Bobo cites a 2007 IRS report that estimated 15 percent of 3.4 million workers were misclassified as independent contractors. As Bobo makes plain, wage theft is widespread; it debilitates both workers and society.
Wage Theft in America does not only point out the crisis of wage theft, it seeks to answer why it occurs, why labor law does not prevent it, and how to stop it.
Bobo considers causes for wage theft as societal contexts (globalization, hidden unemployment, etc.) and challenges (greed, racism, and sexism), untoward business practices, and lack of pushback forces.
This reviewer finds that wage theft is symptomatic of an inherent malignancy in capitalism, something that Bobo does not address, concentrating instead on how wage theft can be stopped within the system.
Bobo finds that there is a “hodge-podge” of laws. They are difficult to understand, and when the needed legal protections for workers exist, there is often an unwillingness to enforce such laws; Bobo points to Florida’s non-enforcement of minimum wage laws as one example.
How to stomp out wage theft? Bobo keys on the importance of labor unions. She provides many facts and rationales to back this conclusion. She also compellingly deconstructs — what turn out to be feeble — objections to unions. Worker solidarity and the attempts to solidarize, according to Bobo, must be protected. “When unions represent most workers in an industry, wage theft is virtually eliminated.”
Bobo emphasizes the importance of solidarity not just among workers but also of workers with workers centers (which include societal- and faith-based centers).
Bobo describes a case emphasizing strength through solidarity. Francisco was fired from Outdoors Excapes, a landscaping firm, and was denied his overtime wages due. Francisco went to the Workers Interfaith Network (WIN) in the Twin Cities with his “carefully kept” records of work. WIN wrote the employer requesting pay within 24 hours or else default wages would start to accumulate. First the employer ignored the letter; a follow-up call also proved unfruitful. WIN next moved the problem from Francisco to the group level. Unsurprisingly, there were other employees missing pay who wished to collect. Upon hearing about this, the employer sent a check to Francisco but without default pay. The outstanding pay of the other workers was unmentioned. This was insufficient for Francisco. The group of workers began sending letters to the clients, and copies to the employer, informing of the workers’s non-payment.
The outcome was that the workers recouped over $40,000 in overtime wages, and most importantly, the owner now pays overtime to all workers.
If solidarity is the strength of workers, then unethical management/ownership would seek to divide and weaken workers. Bobo emphatically shows that “common self-interest” is to the benefit of all workers.
Bobo recognizes the role that the Department of Labor (DOL) can play for workers. She says that with community forces, it is “the best hope for many workers in low-wage jobs.” However, the DOL finds itself vastly understaffed and politically marginalized.
Bobo concludes, “Workers deserve strong leaders fighting on their behalf. Wage theft requires strong leadership. Leadership matters.”
I will not state that leadership does not matter; a good and strong leader could attain meaningful improvements in the workplace and worker remuneration. However, I will depart from the überemphasis Bobo seems to put on leadership. Overemphasizing the importance of leadership is dangerous. It ignores the old refrain cautioning people not to put all their eggs in one basket. It is easier for management to corrupt one leader than the bulk of the working masses. Relying on a bad or weak leader could sink the masses. Bobo has already pointed to the power of unions, worker solidarity, and solidarity with other societal groups. The emphasis should remain squarely focused on worker solidarity and not on leadership.
Bobo calls for a carrot-and-stick approach. She criticizes the lack of deterrence from weak penalties for wage-theft violations and the need to strengthen such penalties. She also calls for rewarding good employers publicly to set the standard.
To further empower workers, Bobo calls for more education and provision of information. For instance, Bobo writes of the DOL’s recalcitrance at posting information on unclaimed back wages, and the need to better promote such information.
Since everyone in society is impacted by wage theft, Bobo calls upon consumers to direct their purchases toward ethical companies, for workers to also inform themselves, and for people to be active and vigilant in fighting wage theft.
Wage Theft in America has a message that goes beyond workers and beyond America. Solidarity is the key for workers. Solidarity is also the key for a better society. It is only through solidarizing and forming mass movements that class society and all its entrenched unfairness, wars, and injustices will be toppled.