Wage Theft

Wage theft, the practice of employers failing to pay workers the full wages to which they are legally entitled, is a widespread and deep-rooted problem that directly harms millions of U.S. workers each year. Employers refusing to pay promised wages, paying less than legally mandated minimums, failing to pay for all hours worked, or not paying overtime premiums deprives working people of billions of dollars annually. It also leaves hundreds of thousands of affected workers and their families in poverty. Wage theft does not just harm the workers and families who directly suffer exploitation; it also weakens the bargaining power of workers more broadly by putting downward pressure on hourly wages in affected industries and occupations. For many low-income families who suffer wage theft, the resulting loss of income forces them to rely more heavily on public assistance programs, unduly straining safety net programs and hamstringing efforts to reduce poverty.

Publications

Lessons from the Waterfront: Economic Development Projects Must Do More to Lessen DC’s Worsening Income Inequality

The District of Columbia can use its economic development efforts to stem the tide of the city’s rising income inequality, but it is failing to do so. Instead, the District’s economic development efforts—including the enormous Wharf project—often support creation of low-wage jobs with minimal benefits, a lost opportunity to reduce inequities. By not including requirements to create high-quality jobs, the District encourages developers to compete for projects and profits by aggressively cutting labor costs—at the expense of workers’ ability to live in the District and support their families.

Job Quality in WIOA: Three Ways to Steer Investments towards High Road Jobs

  • November 30, 2016
  • COWS
  • Laura Dresser, Hannah Halbert, and Stephen Herzenberg.

Implementation of the Workforce Investment and Opportunity Act (WIOA) is well underway. This process creates unprecedented opportunity to adopt policies and practices that boost job quality. Connecting workers with the best quality job possible serves job seekers better. More stable work means higher income, longer job tenure, and better predictability for managing the tensions between work and life. But beyond that, WIOA policies for job quality help protect public investments in training by ensuring that those investments are not simply lost in a revolving door of turnover. Policies that focus on better quality jobs help make WIOA resources a reward for employers who are already treating their workers with greater care, rather than subsidizing low-road competitors who may waste the investment. A new report produced by COWS, the Keystone Research Center in Pennsylvania, and Policy Matters Ohio, identifies three WIOA quality standards that can target public training investment where it will have stronger returns.

Stolen Chances: Low-wage work and wage theft in Iowa

Our 2012 report Wage Theft in Iowa characterized wage theft as an “invisible epidemic” affecting thousands of low-wage workers in Iowa. Since 2012, numerous media reports, an uptick in worker organizing to recover unpaid wages, and heightened attention from some state and local elected officials have made Iowa’s wage theft problem far more visible. Yet the state’s landscape of lax enforcement remains fundamentally unaltered, and new evidence presented in this report underscores the persistence and scope of the problem.

Our 2012 report used national survey work done by the National Employment Law Project to calculate a baseline for the incidence of wage theft among low-wage workers, and then used Iowa demographic statistics to develop estimates of lost wages and lost tax revenues for our state. Our estimates — $600 million in stolen wages and another $120 million in unpaid sales, income and payroll taxes annually — gave dimension and scale to a problem that, to that point, we understood mostly through a few egregious cases (such as that of Henry’s Turkey Service in Atalissa), anecdotal evidence of wage theft reported by many workers, and close studies of a few industries (such as construction).

This report updates and expands on that work by drawing on two more years of claims and enforcement data from state and national agencies, and new results of a 2014 survey of 300 low-wage workers in Eastern Iowa. These local survey responses provide some of the first direct glimpses we have into the scope and nature of Iowa workers’ experiences with wage theft.