The push for fair wages continues on. Local minimum wage movements and larger national coalitions like the Fight for $15 show no sign of slowing down, especially with the 2018 midterms — and the possibility of Congress raising the federal minimum wage for the first time in 10 years — looming.
An estimated $15 billion a year is siphoned from workers through wage theft practices.
Though discussions about fair wages and wage stagnation are important, many advocates have overlooked an obstacle to income equality far more pernicious than the average politician or pundit. Namely, the poor enforcement of minimum wage laws.
Consider this: If the U.S. Department of Labor and state labor agencies are unable to ensure all workers are paid at least the federal minimum $7.25 an hour for their efforts, how can we trust that workers will see $15, $12, or even a $10 an hour federal wage floor?
The truth is, many workers are being cheated out of the current federal minimum wage due to lax enforcement of labor laws, according to a recent nine-month investigation by POLITICO. An estimated $15 billion a year is siphoned from workers through wage theft practices. And the vast majority of these stolen wages are never returned to the workers who rightfully deserve them, and instead benefit unscrupulous business owners who evade wage law enforcement.
What, exactly, is wage theft? And how much damage can the practice do to workers — and to our country as a whole — if allowed to continue unchecked?
Wage Theft Doesn’t Just Hurt Its Victims: It Hurts All of Us
Many believe that wage theft is an issue that only harms its victims, but that simply isn’t true: it hurts America as a whole.
“The immediate effect of wage theft is that person — that human who is doing the work — is monetarily suffering a detriment. They’re not getting what the law says they’re supposed to receive, the minimum standard,” says Thomas.
But it goes far beyond that. Smaller businesses who play by the rules and pay out fair benefits, overtime premiums, and wages have a harder time competing with those businesses that cut corners. And communities suffer as well.
"There’s a trickle down effect in communities where wage theft runs rampant that affects the local economy, property values, and schools."
“The secondary effect of wage theft is that we’re losing vast amounts of tax revenue. There’s a trickle down effect in communities where wage theft runs rampant that affects the local economy, property values, and schools,” continues Thomas. “When you have an economic depression within an area, it affects every aspect of the value of that area.”
She adds, “If folks are not able to pay their bills or their mortgage because they’re not receiving adequate wages, there’s going to be higher incidences of foreclosure. And that also lowers the property values for people who are able to pay their mortgage.”
The longer we ignore the consequences of wage theft, the more all hardworking people in our country lose a piece of the pie, one stolen penny at a time, regardless of how high the minimum wage is set.