Lynn Parramore: When Your Boss Steals Your Wages – The Invisible Epidemic That’s Sweeping America

By Lynn Parramore, a senior editor at Alternet. Cross posted from Alternet

Imagine you’ve just landed a job with a big-time retailer. Your task is to load and unload boxes from trucks and containers. It’s back-breaking work. You toil 12 to 16 hours a day, often without a lunch break. Sweat drenches your clothes in the 90-degree heat, but you keep going: your kids need their dinner. One day, your supervisor tells you that instead of being paid an hourly wage, you will now get paid for the number of containers you load or unload. This will be great for you, your supervisor says: More money!  But you open your next paycheck to find it shrunken to the point that you are no longer even making minimum wage. You complain to your supervisor, who promptly sends you home without pay for the day. If you pipe up again, you’ll be looking for another job.

Everardo Carrillo says that's just what happened to him and other low-wage employees who worked at a Southern California warehouse run by a Walmart contractor. Carrillo and his fellow workers have launched a multi-class-action lawsuit for massive wage theft (Everardo Carrillo et al. v. Schneider Logistics) in a case that’s finally bringing national attention to an invisible epidemic. (Walmart, despite its claims that it has no responsibility for what its contractors do, has been named a defendant.)

What happened to Carrillo happens every day in America. And it could happen to you.

How big is the problem?

Americans like to think that a fair day’s work brings a fair day’s pay. Cheating workers of their wages may seem like a problem of 19th-century sweatshops. But it’s back and taking a terrible toll. We’re talking billions of dollars in wages; millions of workers affected each year. A gigantic heist is being perpetrated against working people: they’re getting screwed on overtime, denied their tips, shortchanged on benefits, defrauded on payroll, and handed paychecks that bounce like rubber balls. A conservative estimate of unpaid overtime alone shows that it costs workers at least $19 billion per year.

The laws protecting workers are grossly inadequate, and wage thieves go unpunished. For giant companies like Walmart, Citigroup and UPS, getting fined is just the cost of doing business. You could even say that they're incentivized to cheat because punishment is so unlikely, and when it happens, so light. The protections we used to take for granted, like the right to receive at least the minimum wage, the right to workers’ compensation when hurt on the job, and the right to advocate for better working conditions, are nothing more than a quaint memory for many Americans. Activist Kim Bobo, author of Wage Theft in America, calls it a "national crime wave."

The sheer scope of the problem is jaw-dropping, sweeping across key industries and inflicting massive damage on individuals and society as a whole. In 2009, the National Employment Law Project (NELP) released a ground-breaking study, “Broken Laws, Unprotected Workers,” which found that in America, an honest day’s work is frequently rewarded with theft and abuse. A survey of over 4,000 workers in Chicago, L.A. and New York found that minimum and overtime violations were rife, and any attempt to complain or organize was swiftly met with punishment. Among the revelations:

  • 26 percent of low-wage workers got paid less than the minimum wage.
  • 76 percent of workers toiling over 40 hours were denied overtime.
  • Workers lose an average of $2,634 a year due to these and other workplace violations.

Who gets cheated?

Women, minorities, immigrants, and workers at the bottom of the wage scale are hardest hit, but wage theft is thriving across the employment spectrum.

People hired for jobs like yard work and domestic services in which the employer pays cash are denied social insurance like Social Security, and often what’s paid doesn’t add up to minimum wage. Some employees are paid for piece work, like the number of shirts produced in a garment factory, and get cheated when the tally falls below minimum wage (that’s one of the things that’s alleged to have happened to Carrillo). Another common form of theft is the “last paycheck” scam in which a worker is either fired or quits and finds that her final wages are withheld.

Low-wage tip workers are frequently the victims of theft in which the boss illegally keeps tips or makes you pay for your uniform or a ride to the job site. Restaurants are infamous for paying wages below the legal minimum; some charge a fee to convert credit card tips into cash, while others simply steal tips outright. When I was in college, I waited tables at a restaurant where the manager required the waiters to turn over tips at the end of the day, ostensibly so a certain percentage could be distributed among the cooks and other staff. I thought my manager was doing something to create fairness. Actually, he was stealing tips.

Then there’s the payroll fraud scam. Misclassifying workers as independent contractors means the business doesn’t pay overtime, employer contributions to Social Security and Medicare, or unemployment insurance. Sometimes bosses misclassify by mistake, but often they do it knowingly. Temporary and seasonal workers are especially vulnerable. The construction and trucking industries are notorious offenders, but payroll fraud impacts people like engineers, financial advisers, adjunct professors, and IT professionals. It doesn’t matter if you have agreed to call yourself an independent contractor, you may not be under the law.

Two tests are commonly used to determine your status: the Department of Labor “economic reality” test and the IRS “Right to Control Test.” These tests consider questions like: Do you set your own hours? Can you make a profit or loss depending on how you do the job? Is the job contracted for a specific time period?  Unfortunately, various federal and state entities have their own criteria, creating widespread confusion. The independent contractor issue is one of the fastest growing areas of litigation, with class actions by independent contractors jumping by 50 percent in 2010Congress has introduced bills to deal with this problem, but they tend to die in committee.

You might think that joining the managerial ranks would protect you from wage theft. You would be wrong. Some people are given titles as managers so they can be forced to work overtime without extra pay. Managers pressured to “improve their numbers” sometimes resort to falsifying employee records. Others deny breaks or deduct the break from the workers’ wages. Walmart has engaged in so many of these practices that researcher Susan Miloser of Washington & Lee Law School refers to retail wage theft as a result of managerial strain the “Walmart Pinch.”

How did we get here?

The world of work in America has fundamentally changed in the last 30 years, and not for the better.

In her paper, “Picking Pockets for Profit,” Susan Miloser traces a struggle for protection that began over a century ago with the public outcry over brutal workhouses where recent immigrants, women and children were paid substandard wages. Massachusetts was the first state to enact minimum wage legislation in 1912. Then came the Great Depression, and President Franklin Roosevelt responded with New Deal legislation that included the Fair Labor Standards Act pushed by his labor secretary, Frances Perkins. One of the key things the Fair Labor Standard Act did was ensure a minimum wage under the theory that wages were subject to something economists call “market failure.” The idea is that you, as a worker, are at a serious disadvantage compared to your boss when negotiating your wages. So the government has to intervene to correct this failure of the market and create a more level playing field.

The act also made provisions regulating payment for overtime. Employers who violated the law could be sued for back pay and damages. Roosevelt insisted that businesses that violated fair labor standards were toxic to the economy: “Goods produced under conditions that do not meet rudimentary standards of decency should be regarded as contraband and ought not to be allowed to pollute the channels of interstate trade," he said. Roosevelt, we may assume, would frown on shopping at Walmart.

Clearly, the New Deal has somehow transformed into the Raw Deal. Since the rise of Ronald Reagan, the American workplace has been morphing from a relatively level playing field into a theater of exploitation. This process has been aided and abetted by influential economists known as "free-market fundamentalists," who dominate the Ivy League and policy circles. They have convinced policy makers and politicians that a voluntary system magically guided by an “invisible hand” produces outcomes that are good for most people. In their view, the economy is a system of equal exchanges between workers and employers in which everybody who does her part is respected and comes out ahead. Obviously, they don’t focus their research on labor: they may talk about unemployment or wages – keeping the former high and the latter low — but the conditions workers face are completely off the radar of these economists. (If you’d like to see how this kind of thinking plays in the mainstream media, take a gander at a recent post by Slate’s Matt Yglesias: “Different Places Have Different Safety Rules and That's OK.”)

Here’s where we are: the twin evils of high unemployment and economic inequality have joined forces to turn workers into so many expendable units in the great capitalist machine. Union-busting, globalization, outsourcing, downsizing, and recession have turned dignified jobs into opportunities for employer predation. I have called job insecurity the “Disease of the 21st Century” and it has clearly metastasized into a situation in which people are terrified of doing or saying anything to jeopardize employment, no matter how egregious the abuse. As long as there aren’t enough jobs, bosses maintain the upper hand. In the face of public opposition and recent revelations about the flaws in research used to support austerity, deficits are still the focus of economic policy rather than job creation. All of this conspires to protect crooked employers and exploit workers, making wage theft a crime without punishment.

What do we do?

The Department of Labor is supposed to enforce fair labor practices, but budget cutting at the insistence of Big Business has had the desired effect. Currently, there are only 1,000 enforcement officers protecting 135 million workers. That would be enough to cover, say, the city of Chicago. Maybe! You can place a claim through the department, but you may not get results. Workers are often left to fend for themselves. (One thing every worker can do is consult the website CanMyBossDoThat.com to at least get a sense of your rights.)

In Wage Theft in America, Kim Bobo outlines a variety of things that communities and activists are doing to address the crisis, from creating task forces to identifying agencies that help low-wage workers know when they are being cheated. There’s been some good news: campaigns to strengthen wage theft laws in several states, cities and counties are underway. The state of New York has enacted statewide legislation to protect workers from wage theft. In Miami-Dade County, a city-wide ordinance was established in 2010 which focuses on eliminating the underpayment or nonpayment of wages and targeting unscrupulous businesses. Chicago’s newly adopted wage theft ordinance will strip employers of their business license if they are caught cheating workers. But the key word is "if." Methods are sneaky and workers often have no idea that they are being robbed.

Local direct actions have sometimes been effective in highlighting and shaming wage thieves. In Seattle, Eric Galanti of the Admiral Pub tried to withhold the final paycheck of his cook Lucio when he was deported to Mexico. But Lucio’s family, along with advocacy groups like Casa Latina, fought back by plastering the city with posters, placing messages on social media and picketing. Finally, Galanti gave in. Stories like this are encouraging, but it's hard to imagine that sort of thing working in, say, Mississippi.

Immigration reform is a key piece of the puzzle — it will help many low-wage, undocumented workers from being exploited by wage thieves who use deportation as the threat. Modernizing record-keeping, imposing criminal liability on wage thieves, and increasing public awareness of wage fraud would also help to combat the problem. High unemployment remains one of the biggest factors in encouraging wage theft, but we're not making good progress in that area. The sequester is expected to lay off 750,000 Americans this year alone. Instead of helping the problem, our elected officials are worsening it. Until these issues are addressed, workers will remain vulnerable to predatory bosses. And that costs everybody.

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109 comments

    1. Voluntaryist

      Agreed, freedom has obviously had it’s chance and proven itself worthless. More rules, I say! More government! More enforcers with guns! More legislation! More beurecrats! More taxes! More regulations! The reams and reams we’ve already got apparently aren’t getting the job done, so the problem clearly is that we need more! Sure they start a few pointless (well, not pointless for them and their buddies) wars and get a few million innocent people killed, but in the end they know what’s best for us, right? I mean, we couldn’t possibly solve the problem of broken wage contracts in a peaceful, voluntary way, could we? Why bother when we can go crying to Mother (land) and (founding) Father?

      1. Synopticist

        Oh yeah, sure, we can do it voluntarily and peacefully, easy.
        Those big, greedy, corrupt powerful corporations and big companies will just roll right over if we ask them peacefully enough. No problem.

        In the meantime, how about we cut taxes and terrible, horrible regulations, and trades unions too, as they get in the way of peaceful, voluntarist solutions.

        1. Voluntaryist

          I’m confused, was it “those big, greedy, corrupt powerful corporations and big companies” that murdered a quarter of a billion people in the last century?

          http://www.hawaii.edu/powerkills/20TH.HTM

          These entities that you hate/fear, “Corporations”, are definied, regulated, and have their liability limited by the State. You spend all your time attacking the puppet while the puppeteer robs you blind, murders your children and your brothers, and laughs and laughs and laughs.

          1. Voluntaryist

            Links and quotes are not arguments. If you’re implying that powerful corporate interests control and influence a large portion of government activity – well duh! What’s your point? One more reason the government shouldn’t exist is so that they cannot be bought by powerful interests, corporate or otherwise. You’re not exactly making an argument for the necessity of the State, which is merely a form of institutionalized violence in an arbitrary geographical area. Once you start seeing “countries” for what they really are – people farms – then you will see the pointlessness of arguing about who is influencing or controlling the farmers. The point is, people shouldn’t be farmed – they shouldn’t have guns pointed at them accompanied with the demand that they fork over a portion of their labor, or how much they may pay an employee, or what they may use as money, or what plants they may put into their bodies. A free-range slave who is allowed some limited mobility within his state-defined pen, and who is allowed to keep 50% of his income, and who is allowed the charade of a “vote” so that ostensibly the wise majority gets to decide who the next group of farmer figureheads will be, is still a slave. Discussion of anything that does not incorporate this reality is meaningless minutiae and a distraction.

          2. Strangely Enough

            You spend all your time attacking the puppet while the puppeteer robs you blind, murders your children and your brothers, and laughs and laughs and laughs.

            Written without a hint of irony…

          3. hunkerdown

            I have never seen any member of the Church of Libertarianism who has been able to get past the fluffy aspirations of American Exceptionalism and the religious doctrines of progress and explain how the principles of Libertarianism don’t lead toward an end game of plantations and spectacular terror just the same as we have now.

          4. skippy

            What planet do you live on or cultist enclave?

            Book

            In War Is A Racket, Butler points to a variety of examples, mostly from World War I, where industrialists whose operations were subsidised by public funding were able to generate substantial profits essentially from mass human suffering.

            The work is divided into five chapters:

            War is a racket
            Who makes the profits?
            Who pays the bills?
            How to smash this racket!
            To hell with war!

            It contains this key summary:

            “War is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives. A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small ‘inside’ group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.”

            The book is also interesting historically as Butler points out in 1935 that the US is engaging in military war games in the Pacific that are bound to provoke the Japanese.

            “The Japanese, a proud people, of course will be pleased beyond expression to see the United States fleet so close to Nippon’s shores. Even as pleased as would be the residents of California were they to dimly discern through the morning mist, the Japanese fleet playing at war games off Los Angeles.”

            Butler explains that the excuse for the buildup of the US fleet and the war games is fear that “the great fleet of this supposed enemy will strike suddenly and annihilate 125,000,000 people.”

            http://en.wikipedia.org/wiki/War_Is_a_Racket

            Skippy… this rubbish extends all the way back before the formation of the USA, yet you rubes still go after the proffered target in a most Pavlovian manner… good boy… good dog.

            PS. its like watching someone hit themselves in the head to get the bad feelings out… shezzz… libtards…

          5. mfrohike

            I love libertarians. I love the fact that they never consider the day after their anti-state dreams come true. It never occurs to them that the day after you abolish the state, the powerful will recreate it in far more oppressive form because it offers stability and predictability. Well, I could be wrong. You could end up with a series of warlords fighting it out for years until one or more of them gains enough power to reconstitute it. Either way, your dream is pure fantasy.

            It would serve everyone better if you would grow up and recognize the world as it is instead of in your adolescent dreams.

      2. Generalfeldmarschall Von Hindenburg

        Is this even serious? What is it about paid libertards that makes them so doctrinaire that they spew the same warmed over rhetoric regardless of the situation. I guess if they get paid enough to sit in their shabby apartment and play world of Warcraft and wank during the time they are not copy pasting this gibberish into a serious discussion.

        1. Voluntaryist

          Ad-Hominem, Straw Man, etc. Your vituperative rhetoric is indicitave of some underlying psychological issue. I would highly recommend getting some therapy/counseling for your anger, which is likely a result of repressed/unexpressed childhood trauma. This is often the case for people who have a violent reaction to the cocept that violence is universally unnecessary and destructive; the idea threatens them because to acknowledge that violence and coercion are unnecessary and destructive and evil is to acknolwedge that the violence and coercion perpetrated against them as children by their parents/siblings/teachers/etc. was also unnecessary, destructive and evil. A hard reality for many to face, given the way children are generally treated in our socity.

          1. Voluntaryist

            “To err is human…” — Willy Shakespeare, a long time ago

            “Those who cannot rebut content focus on form” — Me, just now

          2. Borsabil

            From the advocates of open borders which has gifted the US some thirty million largely unskilled migrants competing for minimum wage jobs we here tell the ‘scandal’ of employers depressing wage rates….well duh!

      3. Massinissa

        Voluntaryist, I dont see how this is AT ALL relevant either to this article or to Lamberts comment.

        And for your comment to Synopticist, I do feel youre the one fighting the puppet. Corporations control the state, not the other way around. The state does only what the major corporations want it to do.

        I wish you Libertarians would be actual Anarchists instead: Legitimate anarchists understand that true freedom will only come after eliminating both state AND corporate power. Destroying only one or the other is ultimately futile.

        1. Voluntaryist

          Voluntaryists are by definition “anarchists”, because “anarchy” literally means “no rulers” (not “no rules” as is so often mistakenly believed.)

          The “corporations” do not and cannot control anything, my friend. Political power grows out of the barrel of a gun; you have got to be able to see the gun in the room to understand this. Businesses exist only by the good graces of their customers, unless they are propped up by the violence of the State (TBTF?) Any corporation who does not satisfy the needs of its customers will not stay in business for long. With the State, on the other hand, you don’t get a choice. If you don’t want to give the State up to half of your income (State income tax, Federal income tax, sales tax, property tax, luxury tax, inheritence tax, etc.) so that they can spend it huring mercenaries to murder people on the other side of the world, well too flippin’ bad.

          The day Wal-Mart, or even Haliburton or Xe points a gun at me and demands that I hand over my money so that it can perpetrate terrible, terrible crimes, you can talk to me about how the corporations control the government. In the mean time, please please please try to recognize when violence is employed and when it is not, and to appreciate the distinction.

          1. Voluntaryist

            I can play this game too! Let’s just assume that this is 100% the fault of the “Free market”, which I doubt. Let’s look at the number of people in the 20th century who were murdered by their own governments, shall we? This is NOT COUNTING wars.

            http://www.hawaii.edu/powerkills/20TH_C_MORTACRACIES.GIF
            http://www.hawaii.edu/powerkills/20TH.HTM

            Democide:
            World Total Casualties 1900-87 260,669,000
            World Total Casualties 1987-99 1,331,000
            World Total Casualties 1900-99 262,000,000

            “Just to give perspective on this incredible murder by government, if all these bodies were laid head to toe, with the average height being 5′, then they would circle the earth ten times. Also, this democide murdered 6 times more people than died in combat in all the foreign and internal wars of the century. Finally, given popular estimates of the dead in a major nuclear war, this total democide is as though such a war did occur, but with its dead spread over a century.”

            Care to run the numbers on “free market” attributed deaths? I think you’ll have a difficult time coming up with anything more than lame anecdotes that are only tangentially related to the “free market” (West Texas? Really?), which cannot truly exist under the violent coercion of a State, and nowhere near the quarter of a BILLION murders committed by the very people that you all deem so virtuous that they should control every aspect of our lives.

            You may not have any choice in those who rule over you, but for pity’s sake have some dignity and stop justifying your cowardice by making hollow, pseudo-intellectual non-arguments extolling the virtue and necessity of those who have the boot on your neck, and your children’s necks, and perpetuating the absolute fantasy that with the right tweak to monetary policy here or the election of the right politician there that we can reverse the cancer of violence and misery that has plagued us for millennia and worsens every day. To do so is to spit on the grave of a quarter of a billion of your fellow human beings, men, women and children whose lives were snuffed out because people like you think that violence is a viable solution to anything.

          2. ohmyheck

            The Military exists to protect the resources and interests of the Corporations. The “Farmers”/Cannon Fodder are fooled into believing they serve in order to keep We the People “safe”/National Security. “National” Security is a lie. It is all about “Corporate” Security.

            I am surprised that you cannot connect the dots, in the links you have supplied, (though you dismiss the links supplied by others), as to how all of those military incursions were to the benefit of corporations. Dole Pineapple, anybody? C&H Sugar? Why don’t you look into who prospered after those military actions?

            Anarchist, you say? Bakunin is rolling in his grave.

          3. Massinissa

            “Bakunin would be rolling in his grave”

            LEGITIMATE anarchists are anti-capitalist, like Bakunin and Proudhon. But this guy probably prefers Murray Rothbard who says incomprehensible things like “Capitalism is anarchistic, and anarchism is capitalistic” or something like that.

            Its a shame traditional anticapitalist forms of anarchism are getting replaced by this kind of capitalist crap.

            Poor Bakunin and Proudhon: They’ve pretty much been replaced by Rothbard. This wasnt what the original anarchists wanted at all.

          4. jrs

            Corporations that don’t get bailouts do have to satisfy customers to remain in business. Still there are many problems. Oligopoly and monopoly obviously (even mainstream econ 101 recognizes this). Fraud obviously (even Ayn Rand recognized this) – and it comes in so many flavors – unlabeled GMO food is a form of fraud IMO.

            But mostly corporations don’t have to satisfy human beings in a fundemental role of their existence: as workers (hence the Bhopal disaster), people might have some voice as consumers, they often have very little voice as workers (what the article is about).

            So if Walmart treats it’s workers like garbage, how about we all boycott Walmart and exercise our power as consumers? Good idea, I do, but why do people shop at Walmart anyway? Sometimes because they can’t afford anything else. And so the low wage system perpetuates itself, Walmart treats workers badly and you can’t even boycott them because your job pays you so poorly. Voting with your dollars is not 1 man 1 vote afterall, in case it wasn’t obviously, it’s obviously a “sufferage” that priviledges the rich. And the powerlessness, the choicelessness, of human beings in their role as workers, a fundemental role of their existence, is one reason why not everyone is a libertarian (but some are anarchists).

    2. F. Beard

      What market?

      Instead we have a government-backed credit cartel that has allowed business to automate and/or outsource their workers’ jobs away with the workers’ own stolen purchasing power. Otherwise, business would have long ago been forced to “share” profits and power with their workers.

    3. Kurt Sperry

      Thanks. I laughed so hard I woke the dog up and now she’s looking at me with this WTF expression. Thanks.

  1. Johnny Fraudclosure

    The DOL doesn’t determine what’s fair. Semantics aside, consider the 2004 update to the FLSA that steals overtime from so-called white collar drones. You have no rights at work, you can drag them into court and sometimes they still won’t pay.

    1. jrs

      Is that the law that applied “salaried” designation to many white collar workers? The salaried thing is a scam to get around overtime. But of course made entirely legal. And not on the level of some of the scams above which are even breaking minimum wage. But still salaried exploitation goes on.

  2. nonclassical

    ….coincides of course with attacks upon unions, pensions, teachers, schools, public education, immigrants, “Social Security”, Medicare; all the VICTIMS who are being BLAMED for economic destruction, WHILE being forced to PAY FOR Wall $treet economic disaster…

  3. Eureka Springs

    Why should immigration reform be abused in such a manner? Should we not have the same standards for all employers and workers in the land, no matter their status? Just as we should establish health care as a human right under single payer or tri-care.

    Don’t fall into yet another divide and conquer trap so easily.

    Also, kill ‘free trade’ as we know it.

  4. sd

    Tax Incentives are playing a part in keep wages down as states pilfer employment from other states by offering tax incentives to lure business.

  5. jrs

    Wow, barely mentions the decline in unions. Is it really possible to combat any of this without unions?

    I know wage theft goes on, here’s a story: being interviewed by an HMO, a big one whose name starts with a K, for an hourly contract position. This is what they were proposing, they had quoted an hourly rate in their ad, but when I asked about whether there would be overtime, I was told “officially there is no overtime because it’s an hourly contract position but actually it’s impossible to get the work done in 40 hours so …. (wink wink nod nod)”. Oh hardy har har. I knew it was contract, I knew the hourly rate (respectable), I went in without illusions, and they want to practice open lawbreaking! Having an hourly contract worker secretly working unpaid overtime is straight out illegal, there are plenty of ways to exploit unpaid labor through the salaried designation that are 100% legal, routes they could have gone with this exact position by making it an employee, and they’d rather break the labor laws. Wow.

    1. cupcake

      Agree.
      Non-union workers have little or no recourse when subjected to employer ‘abuse’.
      Filing a lawsuit not really an option unless pro bono representation available. Good luck with that.

    2. fajensen

      Wow, barely mentions the decline in unions. Is it really possible to combat any of this without unions?

      In China and India it is not uncommon that “unfair” managers are lynched by the mob.

      Maybe corporations prefer that to unions? They can take out life insurance on their managers, make a quick buck and even get a gazillion “likes” on LiveLeak! Win-Win!!

  6. charles leseau

    I’ve done medical transcription for the past decade, which used to be a great job when it was straight typing, but it has now been gradually replaced by editing voice recognition software, which is awful and pays crap.

    This software is not only horrible at doing its job (not kidding; it gets an enormous amount wrong, every single sentence), but editing it carries a massive reduction in pay, to the point where the job pays little more than minimum now, where it used to pay from $30 to 50K per year. And yet it requires a 5-tiered skillset that cannot easily be replaced by your average minimum wage employee: Medical knowledge, proper English skills, skill at deciphering foreign or impeded speakers, all manner of data sleuthing, and typing ability. Our accuracy cutoff is 98%, below which one is failing at their job. They’ve tried shipping the work to India and the Philippines and are still trying, but it hasn’t worked out too well.

    My hourly pay works out now to a hair over half what it was only a year ago. Imagine getting your pay cut in half sometime. (Obligatory Libertarian: Just find another job or start your own biz! Simple!) I am sooo lucky I got my debts paid off before this happened. Editors simply can’t afford to do anything but work 100% of the time, full intensity, during their shift now.

    The pay reduction was odd too. We used to be paid per 65-character line, which I was just fine with because I’m an exceptional typist and it’s a real measure of production. But now we get paid per report, so a 9-minute horror from some mumblemouthed Bangladeshi physician will pay the same as a 25-second breeze from someone with excellent diction and grammar. And they were selling this as if it is a good thing. It is not.

    Actually, that might have been the most bizarre thing – the selling of our new jobs to us. They had to market this stuff to their employees as soon as the change was announced in order to minimize the grumbling and potential exodus, so they sold the training and new platform with this whole “you’re going to just LOVE this new software!” pitch that the company threw at its employees. It was like saying, “Here, have this plate of dog crap. You’re going to just LOVE the way it tastes!” I have yet to meet a transcriptionist who loves ASR editing. If one investigates the public fora at mtstars (dot com), it’s mostly people talking about how they cry and cry trying to figure out how to make their bills. Mostly women in this profession, which often means kids to feed and clothe too.

    Knowing this is just the beginning is probably the worst part. I can already see a certain amount of ironic Sovietization and bureaucracy in the methods going on, and the people who will be squeezed hardest when the shareholders are demanding more profit will always be the workers, of course. Fun future indeed out there.

    1. Voluntaryist

      Might be time to consider going into a new line of work, as the Sovietization of the West is only just beginning, and it’s going to get a lot worse before it gets better. You don’t want to end up as a Neo-Luddite… my suggestion would be to look into the technology sector, one of the only areas of the economy where the State doesn’t have it’s hooks dug in deep, which is why technology is able to advance so rapidly. Anybody with a pulse is allowed to write software, but you need a license to cut hair.

      1. TomDor

        The state, the state – hey wake up…wake up. Do you live in the USA?

        “We, the People, are the rightful masters of both the Congress and the Courts. Not to overthrow the Constitution, but to overthrow the men who have perverted it.” – Abraham Lincoln

        In my book, at this time in history, it is the plutocrats and oligarchs that have done the perverting.
        If you think it’s the state, then you got only one person to blame – wake up and look in the mirror and, after it settles in to your skull what you are looking at….feed the brain with a little knowledge – not too fast though, wouldn’t want you to hurt yourself there. I will give you some applause for sounding so brave; I know it will make you feel better.

        “If a nation expects to be ignorant and free, it expects what never was and never will be … The People cannot be safe without information. When the press is free, and every man is able to read, all is safe.” – Thomas Jefferson

        “It is a universal truth that the loss of liberty at home is to be charged to the provisions against danger, real or pretended, from abroad.” -James Madison

        . “War against a foreign country only happens when the moneyed classes think they are going to profit from it.” -George Orwell

        “A state of war only serves as an excuse for domestic tyranny.” -Aleksandr Solzhenitsyn

        We had to struggle with the old enemies of peace–business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.
        They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.
        Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me–and I welcome their hatred.”
        Election eve speech at Madison Square Garden (October 31, 1936)
        Franklin Delano Roosevelt

        So if you want – go on blaming the state for your ills – god forbid you should give a thought to the fact that you share blame for the ills that nest on you. Sorry, forgot to mention, it requires some bravery on your part to lay some blame upon yourself – I should have realized that might frighten you.
        I will take some blame upon myself as follows – yes I share blame because I was lulled into complacency by an economic and political structure, that I did not analyse things on a more broad based prospective. Also, I accepted the Chicago school teachings as some gospel and not it’s true identity as a deliberate undermining of natural law designed to empower economic rent, concentration of wealth and parasitic business modelling.
        Indeed, under my un-watchful eyes, I did not protest and bravely go forward to overthrow the men who have perverted the constitution.

        As for you – please don’t let me stop you from pinning to live as a lone wolf, a person who prefers to be outside of community and the human race, someone who charges forward in ignorance and without compassion. For all the wrong and evil out there – there is good and common good, progress and enlightenment – I choose to work toward that good and not just only scream about the falling sky

      2. Charles LeSeau

        I’m aware there is no future in this biz and yes, I need to learn something new now, but the tech industry is hardly immune to this stuff, and I’m not just thinking about myself here. There are people who have been doing this their whole lives who do not have the resources or time to learn an entirely new profession. And frankly I’m no luddite yet either. The spectacular tech “improvement” in this job is not much of an improvement – in my case it slows me down – and in terms of productivity percentage gained versus income lost it ends up being just a way to screw the employee. I know someone who designs this software, and he makes no bones in admitting it either.

        The fact that you see nothing wrong with employers reaping record profits and then lowering employee wages at whim on the basis that the employee is free to quit and find better employment is why your ideal world is one I will never, ever adopt or support. Good luck pitching it to everyone else though. As much as you people rage about the state and the historical crimes of various states, for the average law-abiding employee the job is by far the more daily oppressive thing.

        Speaking of which, the “Sovietization” I referred to was intracompany, nothing to do with the State. There are scads of people in upper management whose sole task is to make changes in how the underlings do their jobs, etc. This process can be very bureaucratic, where the changes do not necessarily improve performance but often hinder it by virtue of time spent for everyone to learn the new thing before the next new thing rolls around. But if upper management doesn’t make these changes then their own jobs become useless, so they have to – a classic catch 22, and oh so very Soviet indeed.

        1. JTFaraday

          “As much as you people rage about the state and the historical crimes of various states, for the average law-abiding employee the job is by far the more daily oppressive thing.”

          Yeas, and yet our liberals are practically begging for people to be resubjected to this, even in the face of a state liberals themselves regard as criminal.

          This is creating a torrent of noise in my head, which is usually the prelude to something.

          On a pragmatic level, I can only say “not in the absence of a comprehensive labor platform you don’t.” I think I’ve said this before.

          Clearly we’re no where near having this because we haven’t thoroughly defined the parameters of the problem yet, being a little too fixated on “unemployment,” which tells us something but not all that much.

    1. tomk

      Restaurant servers are often required to pool their tips so the the bussers and cooks can get a cut. The manager takes care of this and takes an unauthorized cut too. The only way to figure this out is for the servers to communicate with each other and know exactly what they contributed which in restaurant chaos is not possible. Often alleged, sometimes falsely, and hard to prove.

  7. ambrit

    Friends;
    Re the Mississippi ‘witticism’ at the end of the piece; as one commenter proposed, lynching! All we have to do is transform, in the minds of the mob, the wealthy class into the “New N—–s” and, presto changeo, “Strange Fruit” makes a comeback! (Semi-seriously though, when the Rule of Law is destroyed, by the selfsame wealthy elites, what do they expect the Mobile Vulgaris to do? Everyone wants to be in the elite class, right? Well, the age old concept of attrition comes into play, doesn’t it?)

    1. from Mexico

      ambrit says:

      Re the Mississippi ‘witticism’ at the end of the piece; as one commenter proposed, lynching! All we have to do is transform, in the minds of the mob, the wealthy class into the “New N—–s” and, presto changeo…

      The problem is this: the “New N—–s” have already been designated, and the lynchings have already begun. But here’s the rub: the “New N—–s” are not the wealthy, but the poor and working class.

      As Jane Mayer notes in this video clip, the super-wealthy have

      managed to take the resentment of the middle class, which has actually been quite economically squeezed over the last couple of decades, and turn their resentment against the people beneath them….

      If you can take the resentment of the middle class and point it downward rather than have it point upward to the people at the top of the 1% who are really walking away richer than ever, then you can succeed politically. And I think they’ve been very good at that.

      http://www.youtube.com/watch?feature=player_detailpage&v=6niWzomA_So#t=2761s

      1. Synopticist

        Pointing the resentment downwards has been the single greatest success of the corporate media in the last 5 years.

        It’s not just that the media is oligarch owned either, the BBC has been as bad at this as any MSM organisation in the UK, worse perhaps, when you think what it used to stand for.

        Ultimately it’s to do with the class profile of the sort of people who now have good jobs in the media. They’re largely upper-middle class social liberals, who barely pause to consider their own economic centre-right, TINA views. The media over here is completely dominated by former public ( paid for) school pupils. Of all the top trades and professions in the UK, only the Law is less meritocratic. But they have that quasi-progressive sheen you get in the corporate wing of the democrats, and the NYT.

        So they hate those horrible working class people who are so racist, and fat and stuff, cheering like oafs at sport,so f*ck-em. I have private health insurance, and can get a deposit on big house from dad. Plus I’m hoping for a juicy Murdoch gig one day, so better make the right noises.

  8. Claudius

    Many manual laborers and blue collar workers often accept low(er) net wages and bad conditions because of the perceived marginal benefits of “Total Compensation’ health insurance benefits – in the event of injury or sickness. But, thousands of employers across the country steal this worked-for benefit when they intentionally fail to pay workers’ compensation premiums or misrepresent the job classification of employees who are covered – employers steal this compensation benefit from employees, and the modus operandi ranges from passive to aggressive :

    Passive fraud when the employer intentionally “declines” to purchase insurance for employees, thus forcing the taxpayer to pick up significant medical bills through Medicare or Medicaid.
    Active fraud when the employer mis-classifies the workforce and the nature of the work being done by employees in order to obtain reduced premiums.
    Aggressive fraud; employers deny valid claims, hoping the employee will not pursue the matter; issues late disability checks; refuses to pay for needed medical attention and prescription drugs; give managers and adjusters incentives to either deny claims or to offer unreasonable settlement amounts; engage in bid rigging on insurance contracts; provide “ghost policies” to independent contractors who are really employees; incorrectly calculates the average weekly wage; refer injured workers to unscrupulous heath care professionals who deny care, give low permanent impairment ratings, and prematurely return injured employees to work; classify employees as independent contractors in an attempt to evade paying premiums; deny clear-cut occupational disease claims, forcing the employee to litigate the case and insidiously, lay off the employee once a claim is filed, to send a message to other employees.

    In New York, a report by the Fiscal Policy Institute (2007) concluded that 25-30 % of all companies in New York are not purchasing workers’ compensation insurance and that non-compliance (failure to buy required insurance) increased premiums and shifted the cost of medical care to injured workers, taxpayers and other employers. It also concluded that in Manhattan alone between $500 million and $1 billion was being lost to the system annually. In Florida, three people were charged with fraud and conspiracy for allegedly providing hundreds of workers with falsified workers’ compensation insurance certificates, which were submitted to over 300 Florida construction contractors. A federal grand jury indicted them in a scheme that involved about $20 million in construction contracts in 12 counties. They were able to undercut area labor providers because they failed to pay an estimated $4 million in workers’ compensation insurance premiums. The list goes on an on.

    For the past 30 years Trade Associations, Insurance companies, politicians (principally on the right) have been laying compensation fraud at the feet of injured workers and the minority of criminal employees. But, as ethical fraud units and various justice departments are discovering, employer fraud and exploitation of employees far outweigh employee compensation system fraud, by a long shot.

    1. Heron

      That reminds me of how the media and politicians treats medicare fraud as a patient crime, when in reality the vast, vast majority of it comes from doctors, “pharmacists”, and insurance companies.

  9. jake chase

    None of this should be surprising. Looting is the strategy of choice in the real economy, as in the financial economy.

    Meanwhile, IMHO, the larger problem is that the general American population seems positively addicted to bunk. In the beginning it was bunk religion, then it was bunk economics, now it is bunk patriotism, glorification of jackbooted soldiers, flag waving ceremonies at every opportunity, endless self congratulation about American superiority, all for the purpose of diverting attention from monopolization, land grabs, corruption, theft, swindles, product and service devolution. What can be done?

    In my time individual strategies worked pretty well. Smart, disciplined people could find niches in the corporatized landscape, support themselves, even families, at a comfortable level, simply ignore all the grandstanding and stupidity going on all around. This seems to be getting harder and harder, in large part because life gets more expensive every year whatever Go’mint says about inflation (more bunk).

    I think what really made America better all those years was the availability of land. There was so much of it and relatively few people. If I were young today I would do anything I could to own enough land to support myself. I know that doesn’t compute to those hoping for concerted action, a ‘solution’ to our economic and social woes, but I don’t know how anyone can expect to organize a population so easily diverted by bunk.

  10. LAS

    This is a spreading phenomenon.

    The small firm I work at is closing this summer because we’ve been so squeezed by corporate procurement demands to do more with less — it no longer pays to continue servicing these corporate clients. We’ve struggled to get by for about 5 years now and it is just a complete money loser. You know some of them – they even charge us for invoicing what they owe us.

    You should have heard how angry one of our client contacts got when we told them we would not accept their next project. They threatened to send their lawyers after us – as if we didn’t have a choice. The next step is the legal equivalent of forced labor perhaps. Well fascism usually does come to that in the end.

    I’m not happy about having to find a new job, but the money losing projects have to stop.

    1. from Mexico

      LAS says:

      You should have heard how angry one of our client contacts got when we told them we would not accept their next project. They threatened to send their lawyers after us – as if we didn’t have a choice. The next step is the legal equivalent of forced labor perhaps. Well fascism usually does come to that in the end.

      History may not repeat itself, but it sure to heck rhymes:

      The post-Black Death increase of wages and decline of land rents was an unmitigated economic disaster for landowners… The landowners responded by passing in 1351 the Statute of Laborers in an attempt to fix wages and prices and to compel able-bodied unemployed to accept work when offered… Characteristically, the employers (the gentry) were not prosecuted for offering illegal wages, although many laborers were punished for accepting them. The labor legislation, in general, was the focus of much popular hatred, and its enforcement was one of the most important causes of the peasat revolts of 1381.

      –PETER TURCHN, War and Peace and War

        1. EmilianoZ

          Don’t get him started on the Statute of the Artificers and Speenhamland.

          It’s good to have DownSouth back and in great shape.

      1. Another Gordon

        And, if I remember correctly, the higher wages paid to newly-scarce labourers after the Black Death caused (or at least coincided with for those who want to be picky) an economic boom as money was better spread around the economy as the elite lost their power to hoard it all.

        1. EmilianoZ

          Yeap, that was the final crisis of the Middle Ages that gave birth to Renaissance and the Modern World.

          Some historians seem to think that the Black Death was more like a symptom than a cause. Prior to that, the peasants had been so squeezed by the feudal landlords that they were in poor health when the Black Death came.

          The period prior to that (1000-1250) was a period of great expansion. The decline that followed might have been a cyclical recession. It also coincided with the beginning of the Little Ice Age. During that decline, wealth flowed from the lower to the higher classes. There were many peasant revolts and the establishment of a few peasant republics.

          Then the pendulum swung the other way and that was the end of the Middle Ages.

    2. Heron

      There’s already a push to do that in certain ways. Most obviously, there was Alabama’s attempt to pass forced-labor laws in the wake of thier driving all the immigrant ag workers out of the state, but more alarming is the growing push among our “elites” to roll-back those old prisoner-protection laws that prevent them from being used as a captive labor pool. I’ve even seen some of these talking heads punting the idea on PBS(the show “Need To Know” specifically, which has been an absolutely laughable replacement for Bill Moyer’s old slot in Texas). Their argument seems to be that, by NOT using prisoners for forced, free labor, we’re allowing their marketable skills to languish; so really, requiring them to work crudy jobs for no pay is the moral thing for us to do.

      If that sort of thing actually gets implemented, then forced labor round-ups of the unemployed, and anti-“vagrant” laws won’t be that far behind. The “owner” and “capitalist” classes are fricking unbelievable sometimes.

  11. Thomas Williams

    “Immigration reform is a key peice of the puzzle”????????

    Are you nuts? E-verify for all jobs would help a lot. I don’t know how this amnesty meme keeps working itself into these conversations.

    The vulnerability of workers is caused by the glut of workers vis jobs available. Allowing tens of millions of illegals to compete for jobs in a high unemployment situation situation just plays into the hands of these employers.

    Granting them legal status will not help one whit. It will only encourage more illegals which unscrupulous employers will further exploit.

    1. harry

      Whining, always whining! Now get back to work and stop reading the interwebs.

      Dont you know there are dividends to be paid (not really!) and incidentally importantly senior management bonuses to be earned. Any slacking off we will send you all back to Mexico, whether you are from there or not.

    2. jrs

      But if they were legal our government would make sure to enforce th labor laws for them. And if you’ll buy that ….

  12. Jim Haygood

    ‘People hired for jobs like yard work and domestic services in which the employer pays cash are denied social insurance like Social Security, and often what’s paid doesn’t add up to minimum wage.’

    I burst out laughing at Parramore’s notion of ‘denied’ social insurance. Most undocumented workers want cash now, rather than getting docked for a harsh 15.3% FICA tax which they will receive back decades in the future, if ever.

    Of course, paternalists like Parramore find it deeply deplorable that some workers have a short-term mindset which they disapprove of.

    Going rates for day laborers around here are $10 an hour, better than minimum wage (not that consenting adults give a shit about nannygov’s minwage).

    1. cwaltz

      Short term mindset is a huge source of misery in this country.

      Whether it be at the worker level where they fail to consider future funding or the means to subsist as conditions change or it be a feckless CEO who decides it is cheaper to substitute substandard practices that exploit people or destroy environmental resources it IS a problematic.

      Self interest isn’t always as “rational” as those who believe in the free market fairy tend to want to believe. Nor does it consider that OTHERS also have a right to have THEIR interests represented.

  13. amateur socialist

    I keep pointing out to colleagues at my multinational tech employer that our continuing reliance on increasing levels of unpaid overtime in every development team is keeping tech unemployment high. The project plans basically assume 60-70 hour weeks. I used to complain about “unpaid overtime” until I actually bothered to look up the laws here in TX. At my salary level there is no such thing – I can be legally terminated for refusing to work an 80th hour or 90th or whatever they deem to be the current requirements.

    Wage theft of technical professionals is hurting employment opportunity industrywide. Enforce a 40 hour work week throughout the Fortune 500 and unemployment will drop.

  14. diptherio

    On construction workers being listed as “independent contractors” rather than employees:

    This is a major problem, from where I’m sitting. I work for a construction sub-contractor (just me, him, and one other guy) who I’ve known since I was 19. Both of his “employees” are reported as “independent contractors” not because he’s trying to stiff us or anything, but because it is soooo damn expensive to have employees. We’ve gone over the math together: he would have to cut my wage by about 30% to be able to pay for the Workmen’s Comp and everything else. Myself, and most of the other subs I know, would rather make a higher wage, than gain the dubious and uncertain benefits of becoming an official “employee.” And no, my employer/friend is not getting rich off this. Last year he barely made more money that I did, and neither of us broke $20,000.

    So, from my perspective, the high occurrence of wrongly-labled “private contractors” has at least as much to do with poorly-conceived, cookie-cutter labor laws as it does with unscrupulous employers, at least when it comes to small construction sub-contractors. I can’t think of a single painting sub who has official employees in my town: no one can afford it (it’s not that their all a bunch of John Galt a-holes). The state gov’t has to be aware that probably 80% of all the construction going on is being done by mis-classified “independent contractors,” but they seem content to look the other way. Occasionally, I hear about a DLI audit of some contractor, but they are definitely few and far between.

    Not to say that this is just a matter of shitty regulations, but that is part of it. I looked into what would be required to start my own painting business last year, just on a whim. Guess what? I can’t afford to work legally, i.e. the licensing, workman’s comp and other requirements put a pretty hefty price tag on becoming a “legitimate” worker. So I, and many like me, continue to work under-the-table, basically, because doing otherwise would leave us even more impoverished than we already are.

    Greedy employers are part of this story, but Gov’t regs that create barriers to entry and that make legitimate business practices excessively expensive is another part, and one that we on the “left” (or whatever “we” “are”) all too often neglect to confront.

    1. jake chase

      Far too much government regulation has the perverse effect of bloating the profits of big business and stifling iniatives of small fry. IMHO, this is not a bug but a feature.

      Of course, the regulations are generally written by lawyers for those who dominate the regulated market, so one shouldn’t be surprised by who benefits from them.

      1. diptherio

        Completely agree. This is the aspect of gov’t regulation that “liberals” are often loathe to contemplate. It seems perverse to me that I need a construction contractor’s license to put paint on people’s walls, something plenty of people do for themselves without obtaining said license (it’s not like a bad paint job interferes with structural integrity, for cripe’s sake). I could maybe see the rationale if requiring a contractor’s license if obtaining said license entailed anything other than just sending a check for $125 to the state, which is currently the sole requirement.

  15. allcoppedout

    Brilliant post – its similar in the UK. Our government run job centres actually tout employers doing this.

  16. Norman

    Until the U.S.A. gets a new mindset in its government, then this will only increase until it finely reaches the breaking point or revolution, be it peaceful or violent. Of course, until then, there’s always “hope & change”!

  17. clarence swinney

    PAY OUR WAY
    Why not? We have the revenue to do it easily.
    Our revenue is 14,000 Billion
    Our budget is 3800B.
    1973 to 2012 outlays, as percent of GDP, averaged 21%
    Revenues averaged 18%.
    It takes 27% of Revenues to cover 3800B of expenditures
    Obama 2013 budget projected revenue of 2900B or 20% of Revenue
    Make taxes Effective at 27% and we balance.
    We cannot continue to borrow borrow borrow.
    We owed less than 1000B in 1980.
    Bush doubled it by taking 9-30-01 debt of 5800B to 11,900 to 9-30-09 Obama will watch it rise to above 17,000.. It is disgusting.
    Tax Wealth is only way as we did to eliminate WWII Debt.

  18. Voluntaryist

    “One of the key things the Fair Labor Standard Act did was ensure a minimum wage under the theory that wages were subject to something economists call “market failure.” The idea is that you, as a worker, are at a serious disadvantage compared to your boss when negotiating your wages. So the government has to intervene to correct this failure of the market and create a more level playing field.”

    This doesn’t make sense to me, how are you at a serious disadvantage when negotiating your wages? You want money more than your labor, and your boss wants labor more than he wants money (that’s why he’s in the market for an employee in the first place!) Both parties want what the other one has, both are free to seek better alternatives (if they exist), how is either at a disadvantage?

    1. jake chase

      The worker has to eat today; the boss is free to wait until conditions improve. If workers could defer consumption as bosses defer production, you would be right.

    2. Massinissa

      There are a hell of alot more workers around than employers. Employers usually have more leverage when negotiating. If you dont want to work for pennies, they can find someone who will.

      Notice how wages havnt risen for 30 years in America. If thats the governments fault, feel free to explain. Would love to hear your explanation.

    3. Massinissa

      By the way, wants labor more than he wants money? That doesnt make much sense: Employers want as much labor as possible while paying as little as possible. If employers can get lots of labour while paying almost nothing, they will of course do so, and use multiple types of leverage in order to do so.

      So im not sure of the accuracy of the statement “wants labor more than they want money”. They want the surplus monetary value of the labor, not the labor itself.

      1. Massinissa

        Diptherio, absolutely wonderful essay you have written. Thank you very much for your time writing it.

      2. Charles LeSeau

        Yes, diptherio, excellent summation of the real nuances embedded in that simplified argument. Maybe agreed-upon wages should be percentage of company profit instead of hourly or whatever, but that would probably be too fair. (And oddly might stimulate better employee performance.)

      3. ccref

        Interesting essay. Thanks.

        Brought to mind the family business, where Labor (me) sat at the table with Management (Dad). Each of us understood the other’s resources and needs, and could adapt.

        Quite different from the situation you describe, which is (unfortunately) a pretty accurate description of today’s business/labor relationship.

  19. Ramon Creager

    I’m more than a little disturbed that the word ‘union’ appears only once in this otherwise excellent piece. We need strong unions, full-stop. That is the best solution for all this. Everything else is just a patchwork of rules and laws and relies on a government that actually cares about low-wage workers to pass them and to enforce them.

    One of Obamas many broken promises (there are so many of them…) was that he would push through EFCA. He didn’t even try. The focus here should be in making it much easier for workers to unionize. They’ll take care of the rest.

    1. jrs

      Exactly. While the government can have laws that are more or less pro-union (can encourage them or attempt crush them) – Europe’s are better than the U.S.. I doubt good labor conditions have ever been acheived purely through government enforcement WITHOUT unions, as seems to be mostly pushed by this article.

  20. Working Class Nero

    Over supply of low-skill workers is the real problem here. On the one hand,as mentioned in the article, demand is dropping as many low-skill manufacturing jobs are off-shored. And on the other the supply of low-skill workers is rising due to mass immigration of low-skill workers and declining education standards for the bottom half of the native population.

    This battle is not new. One interesting point about this article is that the agricultural sector is not mentioned at all. But the tactics described being employed on restaurant and warehouse workers — piecemeal pay, withholding of salaries, and threats at deportation, etc, — were first tried perfected on agricultural workers starting in the late sixties.

    But at least back then there was a working class left that understood the real problem and tried to fight it but ultimately lost. César Chavez, backed by the popular documentary from 1960, “Harvest of Shame” tried to limit the supply of labor. In 1964 he was successful in stopping the Bracero Program, a scheme of allowing in temporary guest workers that had led to the third world conditions for American migrant workers shown in the documentary. The response from Big Ag, who certainly understood that shrinking labor supply meant higher labor costs, and more importantly, lower profits; conspired to help illegal workers cross the border. In 1969, Chavez, Ted Abernathy, and Walter Mondale, the original working class rainbow coalition, marched at the Mexican border against Big Ag inspired illegal immigration and the terrible impact it had on United Farm Workers efforts to organize farm labor. But the battle was ultimately lost as Big Ag worked with Big Gov to make sure the supply of farm labor was high enough to ensure the Harvest of Shame would continue right through the present day.
    In 1979 Chavez testified before Congress:

    When the farm workers strike and their strike is successful, the employers go to Mexico and have unlimited, unrestricted use of illegal alien strikebreakers to break the strike. And, for over 30 years, the Immigration and Naturalization Service has looked the other way and assisted in the strikebreaking. I do not remember one single instance in 30 years where the Immigration service has removed strikebreakers. … The employers use professional smugglers to recruit and transport human contraband across the Mexican border for the specific act of strikebreaking

    And so the same battle rages but yesterday’s battles are forgotten, and the territory lost, the agricultural sector, is not even mentioned.

    But the top 30% wealthy Americans, among them many proud members of the Bourgeois Left, have become hooked. They are now Jones-ing for even more massive amounts of low-skill labor. And it seems they are about to score a major deal with the coming amnesty bill which could bring 25-30 million more low-skill workers into the US. So the inevitable erosion of the standard of live at the bottom of the US society will accelerate. And so ten years from now, when there will be articles written about what a shame it is that teachers, nurses, police, and fire fighters are now paid piecemeal, or as contractors, or are threatened with deportation if they demand more than minimum wage. And the fact that this is standard operating procedure in the restaurant and warehouse sectors will not even warrant a mention. The class war battle lines will continue to move upwards.

    A couple I know well spend a lot of time in the third world. He works for some agency in the UN; she works as an aid worker for various NGO’s. They are both very nice and sweet people; they come from a very egalitarian Scandinavian country, and their lives are devoted to fighting poverty.

    When they were living in Namibia they lived in an expat compound and their children went to the local international school. They had a wonderful villa with a huge garden, with drivers, and gardeners, nannies and maids; nine people in total working for them. Life was really good.

    At some point the husband got transferred back to Geneva. Now they had a two bedroom apartment in the outskirts of town; they cooked their own meals, did their own laundry, and had to take the bus everywhere as they didn’t want to buy a car. Life sucked.

    He managed to get a posting in Burma and life was suddenly good again as this time they got eleven servants at the villa there.

    Although exaggerated (for the time being) this is the choice facing the top 30% of Americans, the ones who so strongly support the Neoliberal globalization strategy of the third-worldization of the first world. And I am not just talking about the famous 1%, they can already afford all the servants they want. The NPR crowd is hostile to the both native working class culture and to the prices working class people could charge if low-skill supply were limited. They like having cheap nannies and gardeners. As time goes on, as the country is flooded with even more low-skill labor, as the standard of living declines for the bottom 60%, the lives of the top 30% will increasingly resemble those of my friends in Burma, and the bottom 60% those of their servants.

    1. Synopticist

      It’ll be the computer techies turn soon. You wait til those indian guys with their “buy one get free” software PHDs come flooding into the knowledge economy, as the IT oligarchs slowly wake up to their power. Why is Silicone valley so super-keen on immigration reform, you think?

      I see tech programmers as circa 1990 highly skilled machinists working in car factories. A great job for the time being, but totally doomed.

      1. hunkerdown

        Our second turn, you mean. Incompetent H-1B workers filling seats and pulling much less than their own weight was rampant around the turn of the millennium.

      2. jrs

        The problem is it’s hard to determine what isn’t doomed. People in other countries study U.S. accounting as well, so accounting is out. Healthcare was hot but nursing is becoming overcrowded …

    2. from Mexico

      Working Class Nero said:

      …the third-worldization of the first world.

      Yep. It’s the much-feared boomerang effect of the “government of subject races” that Lord Cromer warned of. The last “subject race” would be the English themselves.

    3. from Mexico

      @ Working Class Nero

      David Montejano’s Anglos and Mexicans in the Making of Texas has a lot of good info that could be used to bolster your argument.

      For instance:

      In order to eliminate the possibility of competitive bidding for labor, local farm organizations would meet before the season opened to determind the prevailing rates that all growers of a particular crop or in a certain locality were expected to follow. Wage-fixing, however, could not be an effective measure unless the movement of laborers to workplaces with higher wage scales was constrained….

      There was no question among Anglo settlers in South Texas that a major asset of the region consisted of its cheap labor pool. Angribusinessmen, their chambers of commerce, and local county newspapers constantly emphasized this great advantage of the area. One land prospectus in the Winter Garden region, for example, pushed the “sell” in a succinct statement: “The cheapest farm labor in the United States is to be had in this seciton.” Newspapers like the Galveston News and the Corpus Christi Caller likewise invited prospective agribusinessmen and industalists to invest in South Texas, citing the presence of ample cheap labor….

      As it was, large commercial farmers in many South Texas counties were often concerned about “labor theft.” In times of acute labor shortages, many stood guard over their Mexican cotton pickers with shotguns to ward off labor agents or other farmers…

      In the 1920s, then, the Texas farmer saw his labor supply jeopardized in two ways. One the one hand, the enforcement of immigration laws endangered his inexhaustible source in nearby Mexico. On the other, the activities of these distant “outside” employers threatened to siphon off his domestic labor source — the Texas Mexican — as well…

      In 1929, with the support of the South Texas Chamber of commerce, the Winter Garden Chamber of Commerce, and the West Texas Chamber of Commerce, A.P. Johnson, the state representative from Carrizo Springs (Dimmit County), introduced legislation explicitly designed to “protect” the Mexican labor reservoir in Texas. Through occupation taxes, variable county tax surcharges, and the posting of a return transportation bond in each country where laborers were recruited, the Emigrant Labor Agency Laws directly aimed to restrict the recruitiment of Texas Mexican labor by outside industrial and agricultural interests. The Texas State Employment Division expressed the intent in plain language: “The occupation taxes were established to discourage invastions from outside on the State’s labor and mobile workers.”…

      With 85 percent of the state’s migratory labor force composed of Mexicans, the thrust of these labor laws was clear: they were in essence a set of racial labor laws.”

  21. leapfrog

    Medical Transcription is NOTORIOUS for these types of activities. The company claims you are an “independent contractor,” yet tells you how to work, when to work, etc. – I’ve turned SEVERAL of them into the IRS and they’ve since gone out of business – good riddance.

    On another note, I’ve tried to bring the IRS’ attention to the MASSIVE REMIC fraud, to NO AVAIL. They are perfectly willing to go after small companies who break the law, but the Too Big To Fails are untouchable.

    1. cwaltz

      The really small also are hard to be brought to justice too.

      For example, did you know that the DOL will not bring any business who cheats its workers out of wages to justice if they do not clear a half a million? They tell you to pursue civil litigation (which is essentially what you can do before spending 6 months being shuffled around.)

      It’s actually an exercise in wastefulness that they don’t advertise this. Part of their job entails investigating and travelling to investigate(and if anyone is unfamiliar with the process it feels an awful lot like three card monty once they determine you have a claim.

      Not that it’s ENTIRELY the government’s fault. The area that they expect an office to cover is insane and ONE really large business can tie up resources which means they farm it out. My son had a claim. It was shuffled from Virginia to Georgia and then finally North Carolina completed the claim(and by completed the claim I mean came to Virginia on taxpayers expense for several days,determined there was cause and then determined that the business failed to meet the 1/2 million threshold so told son HE’D have to take them to court and never bothered to inform the 7 others in the same circumstance that THEY also had a valid claim for overtime.) The process was a cluster.

  22. JEHR

    In Canada, I see the signs of downward pressure on wages and salaries. The Federal Government has a temporary foreign worker program that trains foreigners to do work that Canadians could do but employers can save 15% on wages by hiring the temps. Then there are the employers that insist that there is a skilled labour shortage so temporary workers are needed. These are the beginnings of winds that are blowing to both reduce the labour force and push down compensation at the same time.

    It is only the beginning.

  23. LifelongLib

    “a problem of 19th-century sweatshops”

    My mother (who lived through both) thinks the New Deal and Great Society were aberrations, and that the U.S. is now returning to its norm — the economics of the 19th century.

    1. Massinissa

      Your mother is a terribly wise woman. If shes still alive give her a hug, because she is totally right.

  24. D. Lewis

    Great Post! I recently open a new restaurant in NY and I definitely want to make sure I adhere to the New York Overtime laws. I want to be as fair as possible to my employees and foster a great work environment. Thanks!

  25. Gerard Pierce

    Those who don’t remember history are always suprised and think that current problems are brand new. My first real job out of high school was working for Safeway Stores as a clerk stocker. It was a union job.

    When I complained at being asked to put in a daily extra hour (off the clock), I was fired. The union refused to take any action beyond finding me a new gig with a different chain.

    A few months later I quit and took a job woking for a defense contractor. They treated their employees well becaue they were screwing the government. They faked our hours upward becaue they were making 10% (cost-plus) on unnecessary hours.

    It was 40 or so years ago and corporate attitudes were the same then as they are now.

  26. Observer

    Between myself, my family, and my friends, these are some of the things I’ve seen. Some of it is legal and some is not, but it’s all theft: Denial of request to use earned paid time off, with end of year buy-back at 50% value for only a portion of the balance (why offer it at all?). Fired on returning from family medical leave (ostensibly for other reasons, of course). “Forgeting” to provide insurance enrollment paperwork until after the annual enrollment window (“sorry, you’ll have to wait until next year”). Mileage reimbursment at less than the federal rate (you can’t write off the balance if you don’t make enough to itemize). Mandatory on-call shifts paying less than minimum wage ($1.25 an hour, actually). Withholding of final paycheck. Firing and re-hiring same person as contracted worker. Denial of workman’s comp claim. Forced suspension without pay. And complete withholding of pay (“we can’t afford to pay you this week and we don’t know when we’ll be able to”).

  27. Hugh

    We live in a kleptocracy, workers are looted in so many ways. Parramore outlines a few of them, but these aren’t even the really big ones. There is the Fed’s 30 year policy of treating wage gains as inherently inflationary and to be combatted. This has led to an enormous transfer of wealth over this period from workers to the rich. That is virtually all the productivity gains over the last 30 years have gone to the rich. There are anti-unionism and deregulation, which have weakened and atomized workers’ power. And there are the tax cuts whose benefits have overwhelmingly gone to the rich. There are the multi-trillion dollar bailouts again of the rich we have seen for having perpetrated the largest frauds in human history. And there are the Get-Out-Of-Jail-Free cards the rich are showered with even as the rest of us live under a legal system out of the Dickens.

    All of these things and more shift wealth away from its producers, the workers, and concentrate it in the hands of the unproductive few. We need to understand that this is not a series of unrelated issues but parts of a system whose sole and only purpose is to loot ordinary Americans and reduce them to debt servitude.

  28. clarence swinney

    TAX CUT FOR 2%—–
    COMPROMISE TO GET IT FOR MIDDLE CLASS BUT BUT TELL US WHAT IT MEANS

    A typical Republican contribution to Wall Street Ultra Rich
    Once known as CCP (country club party) now known as WSA party (wall street of america)

    2% get 70 Billion per year from the tax cut
    2%–get 30% of our Total Income
    2%–took 75% of total income gain from 2001-2007
    2% wealth–own about 50% of total financial wealth
    2% are among the Forbes richest 400.
    2% are among Fortune highest 400 incomes
    2% pay 17% in income taxes
    2% own major corporations that pay 16% income taxes
    2% that 1980-2009 got 281% increase in Income while middle 20% got 25% or less than inflation for a net loss. 3 million investors/gamblers versus 120 million workers

    What did we get from Bush 1700B Tax Cuts from which 2.7% got four times as much as bottom 80%.
    2% that in 8 under Bush sent 2,300,000 jobs to just China.
    2% that in 8 under Bush created 31,000 net new jobs or worst since Hoover.

    Mr. President.. STAND TALL BE BRAVE DO NOT REWARD GREEDY ROBBER BARONS
    Tell the people the Republicans are the PARTY OF WALL STREET with a goal of eliminating the MIDDLE CLASS. Since 1980 their policies have made America number ONE in major nations in INEQUALITY of Income-Wealth. Declining Ame

    1. Massinissa

      Good fucking lord Swinney. WE GET IT. REPUBLICANS ARE BAD.

      But you know what? THE DEMOCRATS ARE BAD TOO. Theyre both parties of different sections of the elites. Ultimately, they represent DIFFERENT PARTS of wall street. The working man and woman have no party to turn to. Havnt you seen Obama cut social security? And please dont say “B-b-b-but the Republicans made him do it!!!11!1” please.

      But honestly I dont know why you say the same things each and every day. Anyway, its not like there are many republicans here: why not say this stuff on the Fox News website or something?

      1. jrs

        Yea. For a long time I thought the parties were pretty much the same, maybe a slight difference of degree, but then their contests and competitions didn’t at root seem fake. I kept believing it was a rigged game and a show but something didn’t add up. It wasn’t wrestling – they *really* were fighting for something. But what? Not any sort of ideal anyone would recognize.

        Yea, they are fighting for different sections of the elite. They both have the back of the elite period, but they favor various sections.

  29. Thisson

    Strange that this article doesn’t mention employment lawyers, who are quite effective at policing the more eggregious instances of employers that fail to pay overtime, etc. The weakness of the current system is that it’s not economical for such cases to be brought when the amount in controversy is low, as in the example of Lucio. I don’t think creating agencies would help here, but I do think that a “loser pays” attorney-fee statute would go a long way to solving this problem.

  30. Pwelder

    This post brought back memories of catechism class, many many decades ago.

    The Catholic Church is not this board’s favorite institution. And they earned that status, fair and square.

    But you should know that they do have a category of “sins that cry to heaven for vengeance”. And you know what? Defrauding workmen of their wages is right up there with murder, etc.

    Just saying.

  31. John Steinsvold

    An Alternative to Capitalism (since we cannot legislate morality)

    Several decades ago, Margaret Thatcher claimed: “There is no alternative”. She was referring to capitalism. Today, this negative attitude still persists.

    I would like to offer an alternative to capitalism for the American people to consider. Please click on the following link. It will take you to my essay titled: “Home of the Brave?” which was published by the Athenaeum Library of Philosophy:

    http://evans-experientialism.freewebspace.com/steinsvold.htm

    John Steinsvold

    “Insanity is doing the same thing over and over and expecting a different result.”~ Albert Einstein

  32. Clayton

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