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Wage Theft and the Attack on American Values

David Callahan

It's no secret that many large employers pay near-poverty wages even as they rake in record profits. They get away with this thanks to a weak labor market and even weaker unions, which now speak for less than 8 percent of private sector workers.

But what's less known is that things are even worse than they look for low-wage workers, given the prevalence of wage theft among employers at the lower end. Wage theft takes many forms -- from a manager at a retail store manipulating computerized time sheets to cheat workers, to refusing to pay the minimum wage or overtime, to a plain old fashioned refusal to pay, period, after work is completed.

All this is infuriating and deeply unfair to workers already living on the margins -- and it happens every day. According to a groundbreaking survey in New York City a few years ago conducted by Annette Bernhardt and others at National Employment Law Project (NELP) 

21 percent of workers in our sample were paid less than the legally required minimum wage in the previous workweek. These minimum wage violations were not trivial in magnitude: 51 percent of workers were ƒƒunderpaid by more than $1 per hour...More than one-third of our respondents had worked more than 40 hours during the previous week. Of those, 77 percent were not paid the legally required overtime rate by their employer. Like minimum wage violations, overtime violations were substantial in magnitude.

And the list of violations exposed in the study went on.

Few values are more revered in U.S. society than work. Hard work is said to be the secret to individual success and a ticket to the American dream.

So you'd  think that our government would spare no resources to defend that value. But the opposite has been largely true in recent decades, as the U.S. Department of Labor and their state and local counterparts have been consistently denied the resources to ensure that workers are paid what they are owed, with workplace inspectors hopelessly falling hopelessly behind the curve. For employers, the signals -- until recently -- have been clear: You can get with almost anything when it comes to labor laws.

Groups like Interfaith Worker Justice (led by Kim Bobo) and NELP have been trying to stop wage theft for years, and have succeeded in passing anti-wage theft laws in several places, including New York State. But the problem remains overwhelming in its scope.

New figures released by employment law firm Seyfarth Shaw show just how overwhelming -- but also that more action is being take to crack down on wage theft. So far this year, a record number of lawsuits have been filed against employers under the Fair Labor Standards Act (FLSA), which covers wage and hour provisions, with 7,064 filed so far this year. That's an increase from 7,006 filed for all of 2011 and only 2,035 cases filed a decade ago.

FLSA Wage and Hour Lawsuits, 1993 - 2012

The uptick in lawsuits is promising. But the basic problem remains: Government doesn't have the muscle to enforce basic labor laws.

This is a yet another example of how attacking the public sector undermines American values. In the name of ceding more power back to individuals and protecting liberty, a downsized government -- in this instance, anyway -- produces the exact opposite result: Individuals find they are less able to empower themselves through hard work and are denied one of the most basic freedoms there is: a fair return on their labor.