Wage Theft: Is Your Boss Ransacking Your Paycheck?

Many Americans don’t know about wage theft, or consider themselves solitary victims to isolated crimes. Yet a different reality is slowly emerging, and the numbers are shocking: employers steal $19 billion a year from workers by skimping on overtime pay by conservative estimations, and between two and three million workers are paid less than minimum wage. It is, according to activist Kim Bobo, author of Wage Theft in America, a “national crime wave.”

As with many workers’ rights violations in the U.S., Walmart is getting its fair share of the action, and going lengths to buffer itself against class action lawsuits. Walmart outsources its supply chain to contracted warehouses, where everything (boxes, forklifts, even the plastic wrap) is Walmart-owned but the liability, ostensibly, falls on the contractors. Last fall six Chicago workers sued the contractors, claiming they were stiffed overtime pay on 12 to 16-hour days, forced to work in excessively hot conditions, or just not paid. Then the claimants moved to add Walmart to the marquee.

“They prey on people living in precarious marginal circumstances. People living on the edge. If that was not the case, they could not do what they do,” said Phillip Bailey, a warehouse worker.

Critics say that, despite Walmart’s efforts to keep these Chinese-style labor practices at arm’s length, they are responsible for the mistreatment of these workers.

Federally mandated minimum wage and one and a half overtime pay are statutory rights according to the Fair Labor Standards Act of 1938. FDR broke it down like this: “Goods produced under conditions that do not meet rudimentary standards of decency should be regarded as contraband.”

Walmart’s wage-pinching should not define the American model. Jiffy mix's should. In Cory Suter’s wonderful article, the muffin maker shows that treating workers right and profitability are not mutually exclusive. In fact, quite the opposite: caring for workers is “what good business is all about.”

Jiffy is something of an anomaly given that it doesn’t advertise (or have to because of its long history and brand loyalty). But what kind of labor market have we ended up with in America when playing by the rules is anomalous? Or at least on its way to being so? And, as might be expected, women, minorities, low wage workers, and immigrants are hit the hardest by wage theft.

Horrifyingly, some Missouri lawmakers (backed by the corporate lobby) are trying to do what those in California couldn’t: pass “paycheck protection” — super-shady, deceitful bills (SB29 and HB64) which would make it harder for unions to lobby in Congress by restricting political payroll deductions while doing nothing to block corporate payroll deductions. That is to say, lobby-monsters like Aflac would continue to deduct from paychecks, business as usual, while unions would have to jump through new and elaborate bureaucratic hoops to raise funds for defending their interests in Washington. The irony of the bills' name is nauseating.

Workers are getting pinched daily by crafty employers and now they stand, at least in Missouri, to have their political leverage castrated. The wage theft phenomenon is sweeping over America, from managers dipping into tips to systematic skimping by rounding hours down, and it’s a much bigger problem than has been acknowledged.