Wage theft is a much bigger problem than other thefts combined

November 20, 2018 2:15 PM

"In 2012, there were 292,074 robberies of all kinds, including bank robberies, residential robberies, convenience store and gas station robberies, and street robberies. The total value of the property taken in those crimes was $340,850,358. By contrast, the total amount recovered for the victims of wage theft who retained private lawyers or complained to federal or state agencies was at least $933 million in 2012. This is almost three times greater than all the money stolen in robberies that year. Further, the nearly $1 billion successfully reclaimed by workers is only the tip of the wage-theft iceberg, since most victims never sue and never complain to the government."

Data is for the US.

What is wage theft?

posted by eviemath (22 comments total)

We treat wage theft like it's just slightly shady and unethical, instead of like theft. Imagine how the employment landscape would change if bosses were held accountable.

I knew a guy who embezzled a large amount of money from an organization he worked for. He was caught and sentenced to five years. But he wasn't anyone's boss. If he had been stealing that money from employees through illegal employment practices, probably nothing serious would have happened.

He sure went into the wrong line of work. He should have opened a restaurant.
posted by Kutsuwamushi at 2:34 PM on November 20, 2018 [32 favorites]

Wage theft is a mechanism by which a business that should fail outlasts its competitors. Victims of wage theft include not only the employees of that business, but the honest business owners and employees in competition with the dishonest business. Failure to enforce the law in this area results in severe downward pressure on wages, poor economic performance, higher than necessary business failures and entrenched poverty.
posted by krisjohn at 2:39 PM on November 20, 2018 [57 favorites]

If I was in charge (fingers crossed) I’d fund the IRS like we find the navy and give them a huge mandate to go after white color crime and wage theft like rabid dogs. Stealing labor should be treated as what it is, a form of enslavement. It’s a bit like NYC’s tenant laws, they’re quite good but never enforced. The foxes have been charge of the henhouse so long we’ve forgotten they’re not supposed to be there.

Change the SEC into an actual enforcement agency and put a few bankers behind bars and return all their stolen money to the public. Revert to the older definition of anti-trust and go after the monocompanies.

Add in some material reforms like ending bail, outlawing bank fees, postal and public banks, shutting down payday loans, going after predatory lenders, mass debt forgeivness, etc and you’ve got a robust, popular economic platform.

The slogan writes itself . We hate your boss as much as you do.
posted by The Whelk at 2:42 PM on November 20, 2018 [55 favorites]

Failure to enforce the law in this area results in severe downward pressure on wages, poor economic performance, higher than necessary business failures and entrenched poverty.

And then the ones who succeed are the assholes, ensuring that eventually, the 1% is mostly made up of a wide range of assholes. It's no wonder all the shady deals and political corruption are so widespread, and they have no qualms about doing any of that to stay at the top, since they've done the same to get there.
posted by numaner at 3:04 PM on November 20, 2018 [10 favorites]

A former boss refused to pay me for $500 worth of hourly work because he didn’t like the end product. I’d love to say that I took him to small claims court and won, but actually I missed the statute of limitations and now it’s just something I get angry about every so often.

Well, I got my revenge by deleting the entire program I’d been working on. No pay = no product.
posted by shapes that haunt the dusk at 3:58 PM on November 20, 2018 [11 favorites]

Sadly, it is precisely those best suited to projecting superficial confidence that are the most likely, in my experience, to be the sort of sleazeballs who engage in wage theft and other shady business practices. We all know them, they're the ones going on about how their wealth is self made and blah blah blah. The people telling stories the loudest are almost always telling it to convince themselves.

As a society, we are terrible at protecting ourselves from sociopaths. Probably because so many of them end up in positions of power that insulate them from accountability if they aren't caught at a young age.
posted by wierdo at 4:20 PM on November 20, 2018 [5 favorites]

If it makes you feel any better, shapes that haunt the dusk, I had an erstwhile boss string me along for about a month’s worth of work and then pay me with a check that bounced. I canceled the hosting account his clients were hosted on, and he threatened me with legal action if I didn’t put them back up. Through his lawyer, we agreed that I would reinstate the client sites on a new account, and he would pay me with another check. I reinstated the sites. He didn’t pay me.

I took him to small claims court and won a judgment that was about three times what he would have paid if he’d just written a check that was good. He let the period of the judgment go by without paying. I escalated to district court, got a writ of execution, and the sheriff went to the bank and commandeered the cash for the amount of the judgment.

This peach of a guy had a potentially decent business, but no shit, he screwed literally everyone out of the money he owed them. His web host, his designers, his vendors, everyone. He’d string them along and feed them some catch-up payments for a while, and then just move to a different service or hire another person when his account was finally closed for lack of payment, or the person quit. When I was hired, the designer I was replacing was only staying on in hopes that she would see even a partial payment of the $10k he owed her. And after I quit (which I did when I discovered that the check he’d sent me had bounced and I was $500 in the hole for overdraft fees, so I called him up, left a string of curses on his voicemail, and told him I’d see his fucking ass in court—then hung up, canceled his hosting and got shitfaced), I would periodically google him and see that every subsequent designer he’d hired had been treated the same way: they’d do a bunch of work for him and then he’d just never pay them. To this day, I may very well be the only person who ever saw so much as a dime. Aside from his lawyer, who probably insisted on a cash-only retainer in advance.

A few years after I received the escrow check from the county sheriff in the amount of my judgment, I saw a notice in the paper that Scammy Scammerson had declared bankruptcy. See, not only was he a thieving asshole, he was an idiot, and had never spent the $200 to incorporate his business, instead leaving it as a sole proprietorship (so he was personally responsible for all the debt his business racked up). He declared $19,000 in assets and over a million dollars in debt. Couldn’t happen to a nicer guy!
posted by Autumnheart at 4:54 PM on November 20, 2018 [41 favorites]

I still have the file of documentation I used against him in court. You can’t tell from that angle, but the file is about an inch thick. They time-stamped the envelope in which the judgment was sealed and mailed, and it was stamped about 7 minutes after the hearing had concluded. Take that, jerk boss!
posted by Autumnheart at 5:06 PM on November 20, 2018 [15 favorites]

Yeah, if you have the resources to take the low level morons to court, getting something out of them isn't terribly difficult. It's the ones that have assets spread around between a bunch of different LLCs that make life hard. Even then, a lot of them commingle assets and otherwise make attaching the other entities relatively simple, but it erects enough of a roadblock to keep most of the few who bother with small claims in the first place from getting what they are owed.

Incidentally, that kind of abuse isn't limited to individuals and small business by any means. Ryanair had one of their planes impounded in France the other day over €100,000+ worth of fees and fines they owed to somebody in France. Apparently they decided to not bother paying for over three years before that particular incident caught up with them.

It's quite amazing how much money made through illicit means makes its way into the pockets of supposedly "respectable" managers and owners.
posted by wierdo at 6:24 PM on November 20, 2018 [4 favorites]

Clients from Hell is an endless list of stories about people who hire contractors and then refuse to pay them, either because they didn't realize that they actually owed the money they agreed on, or because they weren't happy with the product they ordered, as opposed to the one that only exists in their head.

There's a whole lot of, "you approved the draft!" followed by, "well, yeah, but it's not like I read it" exchanges.

I always love the stories where they decide not to pay a web designer, and the designer promptly shuts down their site. Unfortunately, those are far outnumbered by "we decided we don't actually need what you made, so we're not going to pay you for the work you did."
posted by ErisLordFreedom at 8:15 PM on November 20, 2018 [4 favorites]

Amazon makes employees wait to be screened by security and the Supreme Court says it's okay for them not to pay workers for that time. This shit makes my blood boil. Thanks for posting.
posted by theora55 at 8:20 PM on November 20, 2018 [23 favorites]

One of the largest wage theft cases in history was Steve Jobs and other corporate execs conspiring to suppress the wages of their employees with a no-poach agreement. Apple, Adobe, Google, and Intel ended up settling for $415 million in damages. Jobs should have spent his last years in jail for theft on that scale.
posted by JackFlash at 8:38 PM on November 20, 2018 [23 favorites]

My office currently has a contract with a company whose business model seems to be to not pay its staff, and when the employees quit en masse as a result the company just hires a new batch of unsuspecting victims. Unfortunately, this means we government workers frequently have to neglect our own work to step in and provide the services the contractor is supposed to be providing, and, although I don’t know if my agency could be held legally responsible for this wage theft, I feel like it’s at least somewhat complicit if it takes no other action than to switch contractors (which is supposedly in the works).
posted by woofferton at 4:18 AM on November 21, 2018 [2 favorites]

A business in my town regularly pays employees by store credit, from what I hear. It's a used books/video games/music and comic book store, so some people (including some of their young employees, unfortunately) seem to think this is cool/okay. I think that local labor laws prohibit that, though I don't know for sure, and don't know if they're still in the practice, so haven't done anything about it. (I also don't know for sure that they fired an employee for being trans, though that's what I heard through the grapevine. That unscrupulous employers would be shitty in multiple ways would not surprise me in the least, however.)
posted by eviemath at 5:27 AM on November 21, 2018 [2 favorites]

Misleading headline based on TFA. This doesn't all about all other thefts, it only talks about actual robberies. White collar crime isn't mentioned at all, and neither are shady business practices or things like what Wells Fargo was doing to its customers.

And isn't wage theft way more like white collar embezzlement or duplicitous bank behavior than demanding money with a gun.

I'm willing to bet if apples were compared to apples, we'd find that wage theft, while still being shameful and criminal and definitely worth pursuing and eliminated, is fairly minimal compared to all the other ways people who keep books for others manage to squeeze illegal money out of the system.
posted by hippybear at 7:46 AM on November 21, 2018

> And isn't wage theft way more like white collar embezzlement or duplicitous bank behavior than demanding money with a gun.

To this I'd say I agree, we should treat the people who perpetrated the mortgage crisis more like the monstrous criminals they are.
posted by Space Coyote at 10:19 AM on November 21, 2018 [7 favorites]

Most robberies don't involve a gun. Somebody steals your stuff from your car, gets into your house & takes your wallet, shoplifts, etc. And I'll bet this was only reported robberies, so not even close to accurate. But it got my attention in an interesting way so I didn't care.
posted by theora55 at 10:59 AM on November 21, 2018 [2 favorites]

Yeah, if you have the resources to take the low level morons to court, getting something out of them isn't terribly difficult.

Well, just for example, the only reason I was able to get anything out of Scammy Scammerson was because I had his checking account number and routing number already from the one partial payment he'd made to me, and because in the intervening year or two that it took me to file in small claims, win, not get paid, escalate to district court and file for the writ, Scammy was arrogant enough to keep the same checking account open. If he had incorporated or changed banks or even closed the account, I would've been SOL. You can only do a writ of execution on a given bank account if you have the account information, and it's not like you can call up a bank, ask if they have an account for Scam Inc., and then ask for the account and routing numbers.

So basically someone has to be a super-duper low-level moron to actually get nailed for this, unfortunately. If you incorporate and your victims don't have access to your financial account information, they basically have no recourse. And of course, that's just the small businesses. Never mind the larger employers who can afford to keep legal assistance on retainer and/or make you sign an arbitration agreement as a condition of hire, and/or buy the SCOTUS to weaken workers' ability to file class action lawsuits.
posted by Autumnheart at 12:42 PM on November 21, 2018 [2 favorites]

"My office currently has a contract with a company whose business model seems to be to not pay its staff, and when the employees quit en masse as a result the company just hires a new batch of unsuspecting victims. Unfortunately, this means we government workers frequently have to neglect our own work to step in and provide the services the contractor is supposed to be providing, and, although I don’t know if my agency could be held legally responsible for this wage theft, I feel like it’s at least somewhat complicit if it takes no other action than to switch contractors (which is supposedly in the works)."

@woofferton What's it like to work at Centrelink?
posted by krisjohn at 5:20 PM on November 21, 2018

What makes wage theft worse than plain 'ol embezzling is that it by definition targets the most vulnerable in our society.
posted by wierdo at 9:30 PM on November 21, 2018 [5 favorites]

It also forces honest actors to behave dishonestly in order to stay in business, this is the entire model of the food service industry for one - the answer is rigorous enforcement of pro worker laws, an increasing co-op/worker run economic model, and strict regulation on everyone from the corrupt small business owner to the service running “independent contractors” to the big box store changing hours on a whim to avoid ever paying benefits or hiring enough people.

They had their chance to have a free market utopia and they blew it.
posted by The Whelk at 9:34 PM on November 21, 2018 [5 favorites]

The thief I knew best was a guy who went from town to town setting up construction companies. He was really amazing, charming of course but also really competent. The ridiculous part of it is that he didn't have to screw people. He just enjoyed it so much.

He'd roll into town. Big, bright, shiny trucks with the new companies name emblazoned on them. (He never hosed Ford or Chevrolet, made those payments meticulously.) He'd set out bidding jobs all over town, he'd hire good carpenters and good lead men, he got a lot of jobs because he so obviously knew what he was about and he bid correctly, too. He paid all of his workers, though when it was at the end and he was leaving for a new town, that was when his guys might get hosed. And he would hose anyone anytime they left him an opening -- he really was a heartless bastard.

But that wasn't where it was at.

Where it was at was materials. People were drooling to get his accounts, they'd sell him tools and all kinds of materials which were used on the jobs he bid and got. Everything rolled along for about a year, maybe 18 months, he'd make some payments but just enough to keep it all flowing. Butter wouldn't melt in this guys mouth, people wouldn't really even ask for their money, it was such a certain thing -- just look at those shiny trucks, the glistening office, the remarkably orderly warehouse.

And then all the trucks loaded up all of the tools and the small but expensive materials and headed on to a storage space in the next town on the list. Frank was not to be found -- he'd headed off in his latest Lincoln Continental -- but his sister showed up, a tough old bird who played confused, and she put people off this way and that way for maybe a month, to sew everything up, and then she was gone too, and the whole thing rolled down the road.

He did it for maybe fifteen years, and then he got into -- drum roll -- bingo halls. Not near the work of the construction businesses, it was really simple and brought in considerable cash. He'd go out every morning and collect from each bingo parlor, and he was popular figure in that town, driving around in a bright, shiny Continental or Cadillac with his white miniature poodle.

He died last year -- cancer -- he was in his early 80s. His second to last wife had taken him down pretty hard, which was a first, left him with just one bingo parlor. But still he had a nice car and a white poodle and an innocent look on his face, charming til the end, look you dead in the eye while lying through his teeth til the end.

He was clever. He was smart, he knew that he could get people to jump through hoops and he enjoyed watching the show. It's just so easy for clever people -- I've known a few of them, it seems that it's hard for them to be decent people when there's so much fun to be had hurting people.
posted by dancestoblue at 10:18 PM on November 22, 2018 [3 favorites]