Low-Wage Workers Underpaid and Over-Exploited

Just in time for Labor Day come two new reports on deplorable conditions in our labor force.

One report documents violations of core legal protections in low-wage industries. You may already have read some of the lowlights in the New York Times, other newspapers and/or on  blogs like Daily Kos and Poverty USA. So I’ll just briefly summarize.

A team of researchers at the National Employment Law Project and four major universities surveyed more than 4,300 workers in a variety of low-wage industries in our three largest cities–Los Angeles, Chicago and New York. They found numerous instances in which workers were:

• Paid less than the applicable minimum wage.
• Underpaid or not paid at all for overtime work.
• Denied meal breaks they were entitled to.
• Subject to illegal deductions from their paychecks.
• Deprived of tips they’d received.
• Denied workers’ compensation when they were injured on the job or discouraged from filing a claim.
• Retaliated against when they complained or attempted to organize a union.

The pay violations alone cost the average worker an estimated $2,634 a year–15% of his or her total earnings. In the three cities alone, this translates to an astonishing $56.4 million per week.

The other report–this one from the National Council of La Raza–focuses on conditions in the Latino labor force. These, it says, reflect a “decades-long deterioration of job quality” that has affected millions of workers–and not only Latinos.

Latinos have been disproportionately affected in part because many work without legal authorization and so have to lay low and keep quiet. However, they’re also vulnerable because they’re highly concentrated in:

• Hazardous jobs that aren’t sufficiently regulated or monitored for occupational safety.
• Occupations not covered by key federal labor laws, i.e., agricultural and domestic work.
• Industries where employers routinely evade labor laws and regulations by misclassifying employees as independent contractors.
• “Nontraditional” employment arrangements, e.g., work for temporary help agencies, other work without a set schedule or advance notice.

The two reports are quite different, but both lead to the same basic conclusions:

• Existing laws and regulations to protect workers aren’t being adequately enforced.
• Our laws need to be updated to reflect the 21st century labor market–and penalties strengthened so that they’re meaningful deterrents to noncompliance.
• Our federal immigration policies and administrative processes must be reformed to provide sufficient channels to legal status.
• Workers need to be informed of their rights and to have the protections and resources to assert them.

What does all this have to do with poverty? Well, consider that more than 60% the families below the federal poverty line have at least one working member.

What if so many weren’t being ripped off by employers who can take advantage of our flawed policies and equally flawed enforcement systems?

Middle Class Families At the Edge of the Cliff

Last Sunday’s New York Times Magazine profiles a multi-generation black family to trace “the fall of the black middle class.” Their ladder up the economic scale was the auto industry, and it’s been pulled out from under them.

This is a story that’s being replicated throughout the Detroit area. But a new report from Demos tells us that it’s only the latest chapter in a longer, broader downslide for black and Latino middle-class families.

The downslide here isn’t in employment rates. It’s in economic security–a combination of factors that enable families to remain financially stable and recover from setbacks. These factors include education, housing costs, health insurance, household budget and assets.

Even before the recession, black and Latino middle-class families were less likely than others to be economically secure. And more of them were sliding toward potential poverty. Between 2000 and 2006, the percentage of black families that were economically secure fell from 26% to 16%. For Latino families, the drop was from 23% to 12%.

Demos singles out three principal factors in the declining stability of black and Latino middle-class families–loss of health insurance, rising housing costs and declining assets.

Yet the story here isn’t only about certain minority groups. For middle-class families overall, the percentage that were economically secure dropped from 29% to 24%. In other words, 76% of middle-class families were at the edge of a cliff when the recession set in.

Demos calls for policies that will strengthen the middle class as a whole–policies that address the housing and health care crises and help families build assets and reduce debt.

But we surely also need to strengthen the safety net. Because it’s quite clear that most middle-class families–not to mention poor families–don’t have the wherewithal to manage a job loss or any other further pressure on their resources.