PSN Blog

(Co-authored with Cristina Francisco-McGuire.)

(Cross-posted at Huffington Post.)

This week, we authored a report grading states on how well they protect a fundamental workplace right: getting paid what you are legally owed. This right is so basic and common-sense that most people are still unaware of how commonly it is violated.

Wage theft, or the illegal underpayment of workers, has become so widespread, it affects millions of workers across the country and is nearly ubiquitous in certain industries: retail, restaurants, hospitality, day-labor, warehousing, child care, and construction. That’s a lot of people – already not getting paid enough – whose bosses illegally make their paychecks even lighter.

The last time a detailed, multi-state survey was done, the findings were shocking. Researchers in three of our nation’s largest cities interviewed thousands of workers who earned at or near the minimum wage, and found a wide array of workplace violations. Here are just the basic facts:

• 64% of low-wage workers experience wage theft each week
• 26% are paid under the legal minimum wage
• 76% of workers who are owed overtime go unpaid or underpaid for those hours
• On average, low-wage workers lose 15% of their income each year to wage theft – $51 per week, or $2,634 per year

Added up across the nation, this amounts to billions of dollars in earnings stolen from people who can least afford to lose it. In New York State alone, workers’ losses are estimated at $3 billion per year, and wage theft costs the state $427 million per year in uncollected revenues. By depressing the consumer spending needed to fuel economic growth and by defrauding states and taxpayers to the tune of millions of dollars, this is a problem that affects all of us.

State laws and labor departments play a crucial role in prosecuting wage theft, filling in where enforcement of the federal minimum wage law is either lacking or not applicable. Even after the U.S. Department of Labor hired 250 more investigators in 2009, there is still only one investigator for every 141,000 workers — nearly ten times fewer than there were seventy years ago, after the federal minimum wage was first enacted.

Our new report, Where Theft is Legal, shows that, if “cracking down on wage theft” were a class, 44 out of 50 states would fail one of the major tests: enacting strong laws against the crime. At the same time, several states have begun to move in the right direction. As we highlighted in another recent report, New York passed a law in 2010 that is now the strongest in the country. Illinois, California, and Massachusetts have also developed strong and innovative policies to help workers reclaim their wages and convince employers to abandon wage theft. But far too many states have done little to nothing at all.

So what would strong wage theft laws look like? The state laws and policies being advanced by worker advocates and forward-thinking policymakers are setting the new standard for cracking down on wage theft. In Where Theft is Legal, we pulled together the best of these policies into a comprehensive standard, and measured states’ existing laws against it. These policies fall into three major categories that, together, comprise a strong wage theft policy:

Accessing Justice – The most basic provisions of wage theft laws are among the most important: which workers are protected, and whether the law gives them the tools to recover stolen wages. An often overlooked issue is the problem of employer retaliation against workers challenging wage theft. Unless employees have strong legal protections, the risk and impact of losing a job can be greater than the possible benefit of taking on one’s employer.

Transparency & Accountability – Good recordkeeping laws help workers and their employers stay on the same page regarding wage rates, paydays, work hours, and payroll deductions. Not only do laws like payday notification and paystubs create a paper trail that makes it easier to process wage claims, they ensure that employers who play by the rules have nothing to fear.

Securing Justice: In order to clamp down on wage theft effectively, the law must incentivize workers to pursue claims, as well as deter employers from violating the law. This third major component of strong wage theft laws policies addressing those two imperatives: the amount in damages workers are able to recover through filing a wage claim, and the civil and/or criminal penalties for employers for violations.

Without any one of these policies, we lack the essential protections and tools to change the way unethical employers do business. Yet, our report shows that New York is the only state that receives a passing grade in all of these categories — and even it only earns a C+ overall.

This week, we celebrated the 100^th anniversary of the first state minimum wage law – a landmark achieved more than a quarter century before the federal government set a national standard. Today, forty-five states have their own minimum wage laws, and eighteen have set them higher than the national $7.25. It is up to states to lead the way on wage theft, just as they did in establishing the minimum wage.

The consequences of inaction are dire. Not just last week’s alarming unemployment report, but the whole economic landscape shows signs of a tectonic shift away from our nation’s vision of itself as a land of opportunity. Most of the jobs being created since the end of the Great Recession are in lower-wage industries where wage theft is rampant. As a result, millions of the people considered “lucky” enough to find work these days are not only landing in jobs earning less than a livable wage, but in workplaces where their pay is eroded even further by illegal deductions and underpayments.

If we do not crack the wage theft problem, the very notion of economic security will be a relic of our past. The already-weakened economy could weaken even further, meaning that even those of us fortunate enough to have jobs where we don’t suffer wage theft could end up having to take one where we do, as millions already have.

A state that asks everyone, including the luckiest few, to pay their fair share during a time of historic inequality. A state with a minimum wage above the federal floor that helps boost consumer spending and power the economy. A state that has been able to avoid economically devastating budget cuts and public sector job losses by seeking responsible budget solutions.

What one word might best describe a state that has adopted policies like the above to rebuild their economy?  The American Legislative Exchange Council (ALEC) has one in mind: “poor.”

For the fifth edition of their annual Rich States, Poor States report, the increasingly controversial corporate-backed group has once again partnered with notorious supply-side economist Arthur Laffer to rank the 50 states based on their “economic outlook.” To do so, ALEC once again uses a set of criteria intended, the authors write, to “highlight the policies that contribute to economic well-being in the 50 states.”

Yet one look at some of the criteria used to generate this survey reveals that ALEC largely values the “well-being” not of families or state economies, but of the very same corporate interests that fund ALEC.

For instance:

• Despite study after study showing that increasing the minimum wage provides an economic boost to state economies, ALEC and Laffer rank the state with the highest current minimum wage – Washington, at $9.04 – 50th out of 50 in one policy category comprising the rankings. States with no minimum wage laws at all share the number 1 spot.

• Analyses of the recovery continue to show state and local government job losses to be an unprecedented drag on the economy. Yet states including Maine, Alabama, and Pennsylvania that saw their legislatures turn in conservative directions in 2010, resulting in public sector jobs being slashed at a rate far outpacing the national average in 2011 (according to a recent report by the Roosevelt Institute), were rewarded by ALEC if those policies succeeded in decreasing the number of public sector jobs per capita.

• Indiana dropped from number 16 to number 24 in this year’s rankings. But Hoosier one-percenters need not fear. They are set to rebound, the authors predict, noting that Indiana did not “get the benefit of its corporate income tax reduction or right-to-work legislation as of this publication.” Once these newly enacted fiscally irresponsible, anti-worker policies are accounted for, Indiana is expected to “recover from its steep drop” this year – and be deemed “richer” for it by ALEC in 2013’s report.
   

While national attention has recently focused on ALEC’s non-economic initiatives such as “shoot first” and voter suppression bills, the ideological bent of their yearly state economic rankings should come as little surprise. As the group pursues an announced “refocus” on economic issues under increasing pressure, and as more becomes apparent about the ways in which corporations wield influence in statehouses, the results of ALEC’s annual Rich State, Poor States rankings should not just be taken with a grain of salt by observers – they should be explored to reveal the depths of the misguided and economically destructive priorities they promote.

Should the phone company be required to offer basic phone service to a state’s rural residents? That’s the question currently being considered by a committee in Kentucky’s State Senate.

The National Rural Assembly released a letter this week expressing concerns about the bill, SB 135, arguing that it “threatens access to what most consider a basic lifeline, including 911-emergency service, for Kentucky’s most vulnerable citizens.”

The bill, currently being considered by Kentucky’s Standing Committee on Economic Development, Tourism, and Labor, would eliminate so-called “carrier of last resort” (COLR) rules, which would mean telephone companies could stop offering voice telephone service if theyfound it to be too expensive or technically difficult.  But without access to telephone service, individuals do not have access to emergency services like 911, let alone the opportunity to run a business, get a job, or get an education.  There are no substitutes:  wireless services are still not adequately deployed in rural America, and high speed broadband Internet is not deployed where traditional landline telephone service is lacking.

These proposals have been rejected on a national level.  Major telephone companies asked the Federal Communications Commission to exempt them from these regulations last November, and the FCC declined.  In particular, the FCC noted that these companies receive state and federal subsidies to provide service in rural areas.  Kentucky received over $100 million in federal rural universal service dollars in 2010, and AT&T received almost $500 million nationwide, while Windstream received over $100 million nationwide, according to the most recent FCC data.  In the state of Kentucky, according to FCC data, these companies received the following federal dollars subsidizing rural telephone service in 2011 alone:

• AT&T received over $16.5 million
• Windstream received over $10 million
• Cincinnati Bell received $.75 million

Almost 50 counties in Kentucky rely on AT&T and more than 25 rely on Windstream to provide telephone service. Removing the Public Service Commission’s authority over these companies would leave Kentuckians with no guarantees for access to a basic, and essential, utility.

For more updates on this issue, follow PSN’s broadband Twitter feed at @BroadbandPSN. 

(Alvin Melathe contributed to this article.)

While federal efforts to fix our broken immigration system remain on hold, support is growing among state lawmakers for common-sense, proactive approaches that welcome immigrants and expand opportunity for all, both immigrant and native-born. Across the country, a growing and diverse number of forward-thinking state legislators are turning away from unconstitutional, divisive, and economically devastating approaches taken by states such as Arizona and Alabama. Instead they are advancing inventive policies that make economic sense for states’ bottom lines and uphold their reputations. One such approach, tuition equity, continues to gain political and popular support and build momentum in statehouses across the country.

Under current federal law, states have the option to enact laws that grant the same access to higher education for undocumented students as their U.S. citizen and legal permanent resident classmates. Fourteen states have already enacted such laws with several more poised to move this year. Only a month into the 2012 session, pro-active legislators have already introduced bills to increase access to higher education in five states:

• In Colorado, SB 15 (also known as ASSET), moved swiftly through committee and is expected to pass a floor vote in the Senate today, and likely through the House next week.
• In Hawaii, HB 1674 and SB 2163, are both expected to pass their respective committees.
• Florida’s HB 81 has become a hot-button issue as students and immigration advocates, including Dream Activists, have pressed their representatives to pass the bill.
• Similar measures in New Jersey and New York are also gaining steam—in New York, the board of the state university system (known as SUNY) unanimously passed a resolution in favor of tuition equity last month.

Tuition equity laws expand educational access for undocumented and non-resident students but, importantly, also increase the revenue stream for state university systems—expanding the resources available for all students at a time when budget crunches loom. In Colorado, for example, proposed tuition equity bills will bring in over $2.8 million in additional revenues within the state university systems next year.

Proposals like tuition equity are especially important now, as our nation faces a serious shortage of college educated workers. According to the Bureau of Labor Statistics, two-thirds of the occupations or industries projected to see the highest growth by 2018 will require a college degree. As the fundamentals of the global economy shift to favor highly-educated workers needed to power high-tech industries, America’s future prosperity depends on retaining and educating qualified and talented undocumented students.

Globally competitive firms have also registered their need for more highly skilled labor; perhaps most famously, the late Steve Jobs remarked to President Obama that Apple moved its operations overseas because the U.S. lacked the 30,000 qualified engineers necessary to run its factory. An unlikely, but potent, coalition of business leaders, immigration activists, and education officials, from principals to guidance counselors, is joining state legislators to move tuition equity legislation in statehouses all over the country.

These legislators are at the forefront of a growing consensus surrounding the political reality on immigration: Americans want a fair, practical, and humane approach that makes economic sense and expands opportunity for all, immigrant and native born. An overwhelming 70% of Americans favored federal DREAM Act proposals in a June 2010 poll—up 12% from a similar poll taken in 2004.

Smart policymakers realize that the purchasing power of immigrants—combined with their contributions—to state revenue streams will help revive a sluggish economy and alleviate budget pressures in the short term. In the long term, they also know that integrating immigrant populations into the broader economy will multiply that effect at the local and national level.

In fact, immigrant entrepreneurs have had an enormous effect on the economy at large—especially in Silicon Valley where they’ve helped create half a million jobs and generated over $50 billion in revenue. In particular, immigrant women’s entrepreneurship rates have exploded in the last ten years—solidifying their role as dynamic participants in the American economy and community.

Integrating undocumented immigrants into American life is a humane and economically viable goal. It acknowledges that America is a nation borne of the dreams and tenacity of immigrants, and that the vision of a prosperous America involves the most talented young people powering an economy that can meet the needs of the 21^st century—regardless of immigration status. The budding momentum of the tuition equity movement is a step in the right direction for the country—a step that Congress can and should follow.

(This post originally appeared on Immigration Impact.)