Skip to main content

Perpetuating and Exacerbating Income Inequality Through Employee Wage Theft

How is it that major U.S.-based fast-food franchises operating in Western European countries pay employees the equivalent of $20 an hour and provide full benefits, while in their home country, they pay less than half that – with no benefits?

Simple. Because they can. Furthermore, by forcing employees to work “off the clock,” altering time cards, and even deleting records of overtime, they are stealing hard-earned wages – to the tune of .15¢ out of every dollar.

If the management of a McDonald's restaurant in Scandinavia attempted to do this, the union would have the entire chain shut down the next day. In the U.S., fast food workers are only now starting to organize – and with a government that is more interested in protecting major corporations than looking out for its citizens, they are fighting an uphill battle. It's true that the U.S. Supreme Court sided with Amazon.com, which forces employees to spend as much as 25 unpaid minutes a day to go through a “security checkpoint” at the end of their shifts in order to prevent “inventory shrinkage.” It represents the worst kind of double standard. In its efforts to prevent employee theft, this hugely profitable corporate giant is legally stealing time and money from those same employees.

Recently, a group of sociologists from three major research organizations in New York, Chicago and Los Angeles published a report entitled “Broken Laws, Unprotected Workers.” The researchers found that on average, low-wage workers earning $339 a week are losing $51 out of every paycheck. For a full-time worker, that comes to more than $2600 a year. 

Another report, prepared for the U.S. Department of Labor and published late last year, found that wage theft was costing workers in California and New York as much as 49 percent of their income, forcing as many as 67,000 families into poverty. This is only the tip of the iceberg, as those particular states have more rigorous enforcement of wage laws than most others (some do not even have a state labor agency). The study also took into account wage theft from undocumented workers – who often, are not paid at all. Extrapolating the data from the three major cities that were the focus of the study, wage theft from the nation's 30 million low-wage workers exceeds $50 billion a year.

This issue doesn't only affect low-wage workers either. The fact that worker productivity has risen by 250% since the 1940s while real worker wages and salaries have declined over the past 35 years has been widely discussed and documented. This state of affairs is directly attributable to the ongoing deregulation of the financial industry, which has essentially legalized actions for which executives would have once been imprisoned.  It has allowed those at the top to take ever-increasing amounts of money out of company coffers and put it into their own pockets. As a result, average CEO salaries are now well over 800 times that of the employees who do the actual work of making the companies run. 

The entire issue of wage theft is the topic of a new book by Les Leopold, director of New York's Labor Institute. Runaway Inequality examines the root causes of the growing wealth gap, and compares  quality of life and working conditions in the U.S. to those in the socialist democracies of Europe and how economic inequality is directly related to other social issues including education, crime, racism, the environment and even foreign trade policies and militarism. The book also covers ways in which we, as a society, can begin to address a rigged and dysfunctional economic system.

Leopold writes:

There is nothing in the economic universe that will automatically rescue us from runaway inequality. There is no pendulum, no invisible political force that 'naturally' will swing back towards economic fairness. Climate change is not going to heal itself. Either we wage a large-scale battle for economic, social and environmental justice, or we will witness the continued deterioration of the world we inhabit. The arc of capitalism does not bend towards justice. We must bend it.

In the meantime, while the proverbial deck is stacked against workers, victims of wage theft do have legal rights under state and federal statutes. Bought-and-paid-for legislators may continue to drag their heels and even fight against workers' rights and protections. However, employees who have been cheated out of their hard-earned pay have the right to sue their employers for lost wages as well as court costs and attorney's fees, as being handled by law firm such as Levin Papantonio. Furthermore, federal law prohibits employers from retaliating against workers who bring legal action against them. 

Customize This