Anti-Wage-Theft Laws Are Kryptonite to Dishonest Bosses / by Joe Mayall

_{^{A worker fulfills orders at a Walmart store on November 24, 2023. (Victor J. Blue / Bloomberg via Getty Images)}}

The results are in on Denver’s pioneering anti-wage-theft law, which has already helped thousands of workers recover millions of dollars in stolen wages. Cities across America should follow suit and stop thieving employers in their tracks

In January 2023, Denver passed a sweeping anti-wage-theft law to help workers reclaim stolen wages. In the fight to pass Resolution 22-1614, commonly known as the Civil Wage Theft Ordinance, local unions and labor advocacy groups squared off against the Denver Chamber of Commerce and business interests, who cynically claimed the bill’s “unintended consequences” would hurt workers as well as “minority- and women-owned businesses.” However, a recent report from the Labor Division of the Denver Auditor’s Office examining the impact of the Civil Wage Theft Ordinance disproves these claims and highlights the benefit of anti-wage-theft legislation to the working class.

According to Denver’s 2023 Annual Wage Theft Report, last year was the “most impactful in the Denver Labor Office’s history.” Between November 1, 2022, and October 21, 2023, the office helped over thirty-five hundred workers recoup $2 million in unpaid wages, an 85 percent increase from the year prior. What’s more, as this reporting period started before the Civil Wage Theft Ordinance was passed, it does not reflect the full potential of a full year’s worth of wage restitution.

The report attributes this success to four ways in which the Civil Wage Theft Ordinance empowered the Denver Labor Office:

An expanded scope to investigate all forms of wage theft, such as violations of overtime, paid sick/safety leave, and rest breaks.
The ability to proactively investigate high-risk employers, saving workers from having to file a complaint that could be met with retaliation.
Increased penalties, enabling the office to pursue up to 300 percent of stolen wages from offending businesses.
Additional funding for the Labor Office to hire experienced employees to handle these cases.

Armed with the authority and staffing necessary to help Denver-area workers recover their stolen wages, the Denver Labor Office sees its recent results as only the beginning. “The numbers speak for themselves,” Matthew Fritz-Mauer, executive director of the Denver Labor Office, told Jacobin. “In 2023, we helped about 1,500 more workers and collected almost $1 million more in restitution than in 2022. We understand that this is just a fraction of all the wage theft out there, so we’ll continue to hire, refine our practices, and make it clear that in Denver, workers’ rights matter.”

The Bigger Picture

Not only does this report show the benefit the Civil Wage Ordinance has brought to workers in the Mile High City, but it also offers strong evidence labor groups can use to bolster similar efforts in other states and cities, with the ultimate goal of achieving federal anti-wage-theft legislation.

The Economic Policy Institute estimates that employers steal up to $50 billion in wages from American workers every year, exceeding violent theft and auto robberies combined. When the Department of Labor (DOL) studied wage theft in New York and California, it discovered that stolen wages reduced affected families’ incomes by 37 to 49 percent. This theft pushed fifteen thousand families below the poverty line and another hundred thousand families deeper beneath it.

Unfortunately, the DOL only recouped $3.24 billion in workers’ wages between 2017 and 2022, a pitiful 1.62 percent of the estimated $200 billion stolen over those four years. While many factors contribute to this low restitution rate, the predominant one is that the DOL is restricted from pursuing wage theft under the inadequate avenues offered under the 1938 Fair Labor Standards Act (FLSA). The FLSA limits workers to recovering only the federal minimum wage ($7.25 an hour) as opposed to their contracted wage, does not require employers to provide accurate paystubs, and has low penalties for violating employers that do not discourage repeat offenses.

According to the DOL, federal wage theft penalties are so weak that over one-third of offending companies return to wage theft practices. Alternatively, companies hit with civil suites are much more likely to stop stealing wages, as are nearby employers, regardless of their industry. Denver’s Civil Wage Theft Ordinance allows workers to pursue civil suits against thieving employers, a provision other municipalities would be wise to replicate.

National lawmakers have recognized the wage theft problem and tried to remedy it, though their efforts have stalled. In 2019, Sen. Patty Murray (D-WA) introduced the Wage Theft Prevention and Wage Recovery Act, which identifies and addresses issues with federal enforcement. Murray’s act emphasizes the need for stricter penalties, calling the current remedies “hollow threats” that fail to deter businesses from stealing wages. Unfortunately, the bill has been dormant for half a decade.

While instituting a powerful anti-wage-theft bill at the federal level is the ultimate goal, the current state of national politics poses serious obstacles to its passage. In the meantime, leftist groups and labor unions can focus their efforts on state and local efforts like Denver’s. Approximately 88 percent of all jobs are located in metropolitan statistical areas, i.e., cities.

Not only would city-level laws help workers reclaim lost wages for large numbers of workers at a time, but they could also create a positive ripple effect. Unpaid wages are untaxed, meaning money that should go to local programs and Social Security remains tucked away in employers’ bank accounts. According to a study on wage theft in Washington between 2009 and 2013, wage theft cost the state upward of $64 million in untaxed revenue.

Delivering material gains to the working class is also crucial to building a base of support for pro-labor politics, which is necessary to achieve federal anti-wage-theft legislation. At a time when the American Left is called to urgently offer alternatives to the neoliberal politics of centrist Democrats while stopping workers from drifting towards reactionary Republicans, a national push to bring anti-wage-theft legislation to every city in America is a valiant, actionable, and constructive goal.

_{Joe Mayall is a writer from Denver, Colorado. His work can be found at JoeWrote.com}

A 32-Hour Workweek Is Long Overdue / by Ben Burgis

_{^{Senator Bernie Sanders speaks during a nomination hearing for labor secretary nominee Julie Su in Washington, DC, US, on April 20, 2023. (Al Drago / Bloomberg via Getty Images)}}

_{Originally published in Jacobin on April 25, 2023}

_{Bernie Sanders is calling for a reduction in the workweek to 32 hours, at full-time pay. He’s absolutely right. Gains in productivity should serve the working class.}

Earlier this month, Bernie Sanders renewed his long-standing call to reduce the workweek to thirty-two hours. He pointed out that there have been “huge advances in technology and productivity” in the eight decades and change since the Fair Labor Standards Act capped the workweek at forty hours.

Critics argue that it’s fine if technological advances deliver the shorter workweek without government intervention, but that “top-down” interference in the free market is a bad idea. This idea doesn’t stand up to even cursory scrutiny. If the reduction in hours was going to happen without being mandated, it would have happened long ago.

Bernie is right. If we want increased productivity to benefit the working class, we need to take political action to make that happen.

Top-Down or Bottom-Up, Someone Better Mandate It

The idea is slowly gaining traction. Last year, a state-level version was proposed in California, and this March, there was an attempt in Congress to institute a thirty-two-hour workweek by amending the Fair Labor Standards Act.

Right now, these efforts face an uphill battle to say the least. The California bill stalled out in 2022, though it could be amended and reintroduced this year. The federal attempt is going to be strangled in the crib as a matter of course. It was introduced in the House Education and Workforce Committee, whose chair, Republican representative Virginia Foxx of North Carolina, has said that “blanket federal regulations often cause more harm than good” because they don’t account for the “unique needs” of various groups, and that “Main Street America” doesn’t need “more top-down federal mandates.”

When the California version was proposed last year, Reason magazine’s Scott Shackford made similar complaints:

If modernization inevitably leads to people getting as much (or more) work done in fewer hours than they did in the past, then shorter workweeks are an awesome byproduct. We’re certainly not going to complain about people having to work less. . . . However, it’s not something that can be ordered top down via fiat by government officials who don’t have to deal with the consequences.

All this talk of “top-down” mandates makes me wonder what Foxx or Shackford would think about “bottom-up” mandates imposed by strong labor unions. I suspect neither of them would support the PRO Act or similar efforts to create a more favorable legal environment for organizing unions.

In fact, Shackford treats as insidious the provision in the California proposal that would exempt companies that have collective-bargaining agreements with their unions. He equates this with extortion to accept unionization. “It would be a shame if something happened to your company’s business model.”

Personally, I find it difficult to sympathize with the plight of employers “extorted” to stop their union-busting efforts. And a choice between accepting blanket rules mandating shorter hours or negotiating directly with your employees about what hours and other conditions they’re willing to accept seems reasonable enough on its face. But the real point here is that all this talk of “top-down” regulations misses the point. What the critics object to isn’t really that the proposed mandate comes from the “top,” but the fact that it’s a mandate.

Shackford’s claim that he’d be fine with a shorter workweek if it resulted “inevitably” from technological advances willfully misses the point. We know perfectly well that it won’t happen that way. There was a 299 percent increase in labor productivity from 1950 to 2020. As Senator Sanders rightly suggests, the benefits of that increase largely went to the top of society. It certainly didn’t automatically generate a shorter workweek.

The nature of capitalist property relations make such “natural” decreases deeply unlikely. If workers collectively owned and democratically ran their own workplaces, they would have the option of responding to laborsaving technological advances by simply voting themselves reduced hours with no reduction in income. But with labor and ownership separated, owners have little incentive to make that decision.

The “Modest Magna Carta” for the Working Class

In nineteenth-century Britain, even the struggle for a sixty-hour week — ten hours a day, Monday through Saturday — was waged in the face of ferocious resistance by employers. Chapter Ten of Karl Marx’s masterpiece Capital is devoted to analyzing this struggle.

Much of the chapter is spent chronicling horrors like deaths from overwork and children deprived of time to play through endless hours in factories, workshops, or bakeries. He mentions a town that held a public meeting to petition for working hours to be reduced to eighteen hours a day. But Marx’s overall focus is analytical. He spends a lot of time taking apart the rationalizations offered up by apologists for the capitalist class, like the Oxford political economist Nassau Senior, who absurdly argued that the “last hour” of the workday was so essential to profits that the economy would collapse if hours were reduced at all.

At the end of the chapter, Marx celebrates the eventual passage of the Ten Hours Act:

For “protection” against “the serpent of their agonies,” the labourers must put their heads together, and, as a class, compel the passing of a law, an all-powerful social barrier that shall prevent the very workers from selling, by voluntary contract with capital, themselves and their families into slavery and death. In place of the pompous catalogue of the “inalienable rights of man” comes the modest Magna Charta of a legally limited working-day, which shall make clear “when the time which the worker sells is ended, and when his own begins.”

If the Ten Hours Act in Britain — or the Fair Labor Standards Act in the United States — was the equivalent of the Magna Carta for the relations between labor and capital, that analogy is worth unpacking a bit. When King John was forced to sign the Magna Carta in 1215, recognizing certain rights he couldn’t infringe, this was the first major limitation on royal power. But Britain wouldn’t be anything like the advanced democracy it is today if the struggle to roll back royal power had ended in the thirteenth century.

Technology and productivity have advanced to an astonishing degree since President Franklin Roosevelt signed the Fair Labor Standards Act. But the limitation on how many hours workers can be made to spend on the job if they want to be able to make a living has stayed in place. They don’t get one more lousy hour a week to spend with their loved ones or spend pursuing their own interests that their grandparents didn’t get in the 1940s.

Bernie is right. We’re long past the time for that to change.

_{Ben Burgis is a Jacobin columnist, an adjunct philosophy professor at Rutgers University, and the host of the YouTube show and podcast Give Them An Argument. He’s the author of several books, most recently Christopher Hitchens: What He Got Right, How He Went Wrong, and Why He Still Matters.}

While Elites Fret About Inflation and Worker Wages, CEOs Are Robbing Us Blind / by Branko Marcetic

_{^{The already massive CEO-worker pay chasm only widened over the course of 2021. (Alexander Mils / Unsplash)}}

The Fed has embarked on an anti-inflation policy designed to destroy jobs and keep wages low. But a new report shows just how exorbitantly CEOs are profiting from the price hikes.

As an impending war on workers’ wages gathers steam, there’s comparatively little talk about the gargantuan pay packets of corporate executives. That’s too bad, because a new report suggests those pay packets have ballooned to new, ever-higher levels even as worker pay has stagnated.

The report from the Institute for Policy Studies (IPS) is the latest of the organization’s annual series of Executive Excess reports, this time examining CEO pay at three hundred publicly held US corporations that recorded the lowest median wages in 2020. What the IPS found is as depressing as it is unsurprising: the already massive CEO-worker pay chasm only widened over the course of 2021, and worker pay at many of the companies has fallen behind inflation, even as corporate profits have been turned into millions of dollars more for individual executives.

According to the report, CEO pay at these low-paying firms rose by 31 percent to an average of $10.6 million, pushing the average ratio of CEO-to-median-worker salary to 670-to-1, up markedly from 2020’s gap of 604-to-1. Forty-nine of the firms even recorded pay gaps of an astounding 1,000-to-1.

Few reading this will be surprised to hear who the worst offender was: Amazon, whose CEO-to-worker pay gap grew an unfathomable 11,062 percent over 2020. CEO Andy Jassy, who took over from Jeff Bezos in 2021, at least nominally — Bezos and Amazon have made clear he’s staying involved in the company and was mostly handing over day-to-day responsibilities — ended up making $212.7 million last year, or 6,474 times the average Amazon worker pay of $32,855. Besides union-busting efforts directed by the exorbitantly compensated Jassy, Amazon workers have to contend with intense workplace surveillance, discrimination and harassment, and notoriously hectic working conditions that force them to pee in bottles or skip bathroom breaks.

Other top offenders include Abercrombie & Fitch, whose CEO takes home a salary 3,282 times the size of that of his median employee, toy maker Mattel (2,705), tobacco supplier Universal Corporation (2,683), the Gap (2,485), footwear brand Skechers (2,265), and McDonald’s (2,251).

Some firms in particular saw their CEO-to-worker pay gaps widen astronomically over the course of 2020, like digital payment services company FleetCor Technologies (a 3,595 percent rise in the CEO-to-worker pay gap), clothing retailer Urban Outfitters (3,400 percent), casino and racetrack operator Penn National Gaming (1,145 percent), electronics multinational Methode (1,096 percent), and hair salon operator Regis Corporation (969 percent). Jay Snowden, the CEO of Penn National Gaming, which is planning to take full ownership of Barstool Sports next year, took home the third-largest payday of all the CEOs covered in the report, with $65.9 million.

At the same time they were doling out massive paydays to their CEOs, 106 (35 percent) of these 300 hundred low-paying firms paid their workers a median wage that fell behind the 4.7 percent average US inflation rate over 2021, states the report. In fact, sixty-nine of these firms saw their worker pay fall.

It’s not that these firms didn’t have the money to pay their workers better while inflation soared. As the report points out, of those 106 firms where median worker pay didn’t keep up with inflation, sixty-seven spent a collective $43.7 billion on stock buybacks to pump up their CEOs’ stock-based paychecks. According to the report, Lowe’s, Target, and Best Buy, for instance, could’ve given all of their employees a raise of $40,000, $16,000, and $32,270 each respectively, if they had spent the billions they blew on stock buybacks on their workforce instead.

The report’s findings come amid a national debate over inflation that has consistently stressed the impact of higher worker wages and government policies that put money into average people’s pockets. Meanwhile, the idea that corporate price gouging has played some role has been cast by some as a “conspiracy theory.”

Of course, the biggest risk of further inflation comes from the supply shocks caused first by the pandemic and now Moscow’s invasion of Ukraine and the Western sanctions that came in response. But the impetus has also come from opportunistic price hikes by profit-hungry companies taking advantage of the widespread public awareness of inflation to sneak through added price hikes. A recent Guardian investigation based on Securities and Exchange Commission (SEC) filings and investor calls for a hundred US corporations found executives disclosing they were raking in massive windfalls as profits far outpaced inflation, with executives openly admitting their price increases outstripped inflationary costs.

Meanwhile, the Federal Reserve is embarking on a series of interest rate hikes that will at minimum cause job losses and at worst stagflation and a recession. The main target of these rate hikes is what Fed chair Jerome Powell called “an extraordinarily strong labor market,” which has given workers the leverage to get the higher pay Powell believes is now driving runaway price increases.

Powell has said his strategy for tackling inflation will involve “some pain” and declared in a May press conference that outlined his belief in the need to stifle wage growth that “we can’t allow a wage-price spiral to happen.” An imbalance in supply and demand for the job market means “wages are running at the highest level in many decades,” he explained, and the Fed’s policies would enable “further healing in the labor market” to bring them “back into balance.” The “healing” Powell is euphemistically referring to in reality means the erasure of job opportunities, which will erode workers’ bargaining power and make them more willing to take on jobs with substandard working conditions, including low pay.

While all of this is taking place, the IPS report reminds us, the price gouging and extravagant salaries of corporate executives go conveniently ignored in the debate over inflation and the government’s seemingly willful failure to tackle them. The report notes that the Joe Biden administration has dragged its feet on using the federal government’s contracting power to tackle the widening CEO-to-worker pay gaps, which it could easily do: 119 (40 percent) of the 300 companies examined got federal contracts between October 2019 and May 2022, to the tune of $37.2 billion, a massive sum that could be leveraged to force the firms elbowing for a place at the trough to put in place fairer pay practices.

We seem to be on an irreversible course to repeat the disastrous economic shocks of the 1970s and early 1980s, all in the quest of suppressing whatever meager advances low-wage workers have seen in their paychecks these past couple of years. And meanwhile, the corporate profiteers robbing us blind laugh all the way to the bank.

_{Branko Marcetic is a Jacobin staff writer and the author of Yesterday’s Man: The Case Against Joe Biden. He lives in Chicago, Illinois.vely little talk about the}

_{Jacobin, June 10, 2022, https://jacobin.com/}

The already massive CEO-worker pay chasm only widened over the course of 2021.