Columns » Ernest Dumas

Wage theft and the American worker



Something in the boilerplate news every Labor Day stirs memories of my father, a trucker and woodsman who toiled harder and longer and with more passion than anyone I have known, right up to his final heart attack at the age of 66.

This Labor Day's memory is triggered by the story about the great growth of wage theft across the United States and a court ruling in California that FedEx could not dodge wage-and-hour laws any longer by calling its drivers independent contractors.

During the oil boom of the 1920s that made many millionaires in South Arkansas, my father, the eldest son of a dirt farmer and carpenter, landed a job hauling oil for one of the 90 or so operators exploiting the Union County fields. It was a sunup-sundown job for a few furious months but my father and the other two or three haulers never got a single payday. It was a cash-flow problem, the owner always said. Maybe next month.

One of the men finally got the bright idea of suing. They did and, while they lost their jobs, they won an order from the Union County Circuit Court that the operator had to pay them. But their lawyer kept the whole piddling judgment, explaining that his fees for the lawsuit exceeded it. The haulers still owed him. My father never mentioned the incident to his boys — our mother later did — but he told us we could do whatever we wanted with our lives except be lawyers. On our own we decided not to be millionaire oilmen.

This is called wage theft now and it seems to be as prevalent as it was in the 1920s, in spite of the expansion of both federal and state wage laws in the '30s and '40s. Hispanic immigrants in Arkansas are very familiar with it. Missing paydays are common, and neither the courts nor watchdog agencies offer a remedy if the boss knows you don't dare risk reporting it. More often it involves employers ignoring overtime rules or keeping tips. The practice always grows in slack labor markets, like my dad's and today's, where many are eager to step into your low-wage job, whatever its liabilities, if you give it up.

Government got more aggressive in a few places in the aftermath of lawsuits that exposed the practice of many big employers, including Walmart, of putting many hours of their employees' work "off the clock." Business groups claim the stepped-up enforcement is just the government currying favor with the infernal labor unions, which everyone hates.

The difference between the wage theft of my dad's time and today is that people much higher up the ladder get taken. Lawsuits this spring disclosed that some of the biggest companies in Silicon Valley connived to suppress the lawful pay of their computer engineers by some $3 billion.

When oil hauling didn't pan out, my father acquired an old International truck and a pair of mules and for the rest of their lives he and Dock Davis, a black neighbor, cut and hauled logs and pulpwood at whatever scale the sawmills gave them. My father found the lumbermen, if not more generous, at least more scrupulous than oilmen. He was an independent contractor and for 35 years he split the meager proceeds from each week's toil with Dock, who tended the mules and the other end of a crosscut saw.

My dad's independent-contractor arrangement with the mills would become a model for many industries, notably in transportation and even in my own trade, news. It saves a company lots of money and bother with the meddlesome wage-and-hour nannies. But now the Ninth U.S. Circuit Court of Appeals in California has given latter-day "contractors" like my dad wan hope. It held that FedEx drivers in California were employees and entitled to the protection of the state's wage-and-hour rules.

But wage theft and avoidance through schemes like independent contractors are only echoes in a much larger quandary that now besets not just the marginal poor but most of America. For at least 35 years, the whole pool of labor, now some 160 million men and women, has enjoyed a steadily shrinking part of the national wealth. A statistic: After-tax profits for corporations last year tied 1965 for the highest share of the U.S. economy on record while compensation for workers was the smallest share of the economy since 1948, when the great postwar growth of unions and worker pay began.

People argue about the reasons, but one must be that after the tumultuous Jimmy Hoffa labor-racketeering hearings, the succeeding campaign to vilify unions as destroyers of initiative and freedom, and the simultaneous perfection of a management strategy for thwarting union elections, organized labor gradually vanished as a factor in the economy. It survives as a marginal political influence.

Worker sympathy was replaced in the 1980s by a new doctrine, which is that the key to broad prosperity is not raising wages and benefits, but liberating investors by cutting their taxes and regulatory restraints, so that in their search for greater profits they will create millions of jobs and "lift all ships." Recurring failures of the philosophy only goads the believers and politicians to greater striving.

There is a little progress at the margins in halting the growing inequality. Over the past year and a half, according to the Economic Policy Institute, hourly pay for nearly all Americans, adjusted for inflation, continued to fall. But an exception was a small average gain for the bottom 10 percent of workers. Thirteen states raised their long-stagnant minimum wage, which accounted for the small improvement.

If the secretary of state lets the Arkansas minimum wage initiative on the ballot, we will get a little jolt of prosperity. It's too bad it won't help independent contractors or the victims of wage theft.

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