As Democrats make raising the minimum wage a centerpiece of their 2018 campaigns, and Republicans call for states to handle the issue, both are missing an important problem: Wage laws are poorly enforced, with workers often unable to recover back pay even after the government rules in their favor.
Thats the conclusion of a nine-month investigation by POLITICO, which found that workers are so lightly protected that six states have no investigators to handle minimum-wage violations, while 26 additional states have fewer than 10 investigators. Given the widespread nature of wage theft and the dearth of resources to combat it, most cases go unreported. Thus, an estimated $15 billion in desperately needed income for workers with lowest wages goes instead into the pockets of shady bosses.
But even those workers who are able to brave the system and win to get states to order their bosses to pay them what theyre owed -- confront a further barrier: Fully 41 percent of the wages that employers are ordered to pay back to their workers arent recovered, according to a POLITICO survey of 15 states.
Thats partly because, in addition to lacking resources, states lack the tools to go after the landscaping firms, restaurants, cleaning companies and other employers that shed one corporate skin for another, changing names while essentially continuing the same businesses often to evade orders to pay back their workers.
This failure to enforce both the minimum hourly wage $7.25 under federal law and rules requiring higher pay for overtime distorts the economy, giving advantages to employers who break the law. It allows long-term patterns of abuse to take root in certain service industries, especially restaurants, landscaping and cleaning. Advocates for lowest-wage workers describe families facing eviction and experiencing hunger for lack of money thats owed them. And, nationally, the failure to enforce wage laws exacerbates a level of income inequality that, by many measures, is higher than its been for the past century.
Low-income workers are already in this fragile balance, said Victor Narro of the UCLA Labor Center. One paycheck of not being able to get the wages theyre owed can cause them to lose everything.
Interviews with scores of state officials, legal-services advocates and labor specialists indicate that the failure to enforce minimum wages touches every corner of the country, but is especially acute in the six states that have no investigators probing wage violations at all.
All six states that have no minimum-wage investigators are in the South, and in a seventh, Florida, former Gov. Jeb Bush eliminated the state Department of Labor over a period of years in the early 2000s. In theory, its responsibilities were distributed among other state agencies, but in practice Florida failed to undertake a single enforcement action for more than four years. Georgia, Louisiana, Alabama, South Carolina, Tennessee and Mississippi all have labor agencies, but workers cant file minimum wage or overtime claims with them; they must instead appeal to the U.S. Department of Labor, which takes cases only selectively, based in part on the number of employees involved and the extent of the wrongdoing. ... The federal Department of Labor has 894 investigators vastly more than any state agency. By historic measures, though, its investigative workforce isnt particularly large. In 1948, when the United States had 23 million workers, the division had 1,000 investigators. Today, the U.S. has seven times as many workers, but slightly fewer federal wage-and-hour investigators than it had 70 years ago.