As families in Iowa struggle to make ends meet, they are justified in feeling threatened when they see what were once good jobs turned into low-wage, sweatshop labor.
In industries across the country, workers are not receiving the wages owed them under minimum-wage and overtime laws. Earlier this decade, a U.S. Department of Labor report found that 60 percent of U.S. nursing homes routinely violated overtime, minimum-wage or child-labor laws. Other studies have found similar levels of violations in the garment and restaurant industries. Advertisement
In Iowa, the minimum-wage and overtime laws have some of the weakest enforcement provisions of any state in the country. Penalties usually amount to no more than telling employers to pay what they originally owed their workers. Because legal action is so expensive and so likely to produce meager returns, few employees can afford to pursue claims. Because civil fines are so low, the state doesn't collect enough for strong, ongoing enforcement.
Legislators in the Iowa Senate have introduced SSB 3286 to put real teeth into Iowa's wage-and-hour laws. The bill would significantly raise civil fines for violators, require them to pay legal damages of up to twice the amount of unpaid wages, and better protect from retaliation employees who complain about illegal conditions.
It also would provide extra protection for workers by preventing them from being misclassified as "independent contractors" and thus stripped of basic labor rights. Enacting SSB 3286 would create the disincentives necessary to eliminate sweatshops in Iowa.
Of course, there are other less effective "solutions" on the table. Because many employees in sweatshops are undocumented immigrants, some propose punishing them for accepting their jobs in the first place. But that would hardly eliminate sweatshops. Most workers toiling in illegal working conditions are citizens or legal residents. Punishing undocumented co-workers would not increase wages or improve conditions for legal workers. That would make things worse by driving the problem further underground, rather than eliminating it.
If, instead, Iowa were to ensure that all employers paid a decent wage, the attraction of hiring undocumented immigrants would diminish tremendously. Any hiring of undocumented immigrants would then be due to legitimate shortages in the labor supply, not to employers using those workers to illegally undermine wage standards for the rest of the work force.
The success of this approach has been demonstrated in other states. In the mid-1980s, California began to crack down aggressively on wage-law violations. Wage standards were raised for workers across the state, and the Los Angeles metropolitan area deflected a million immigrants to other cities between 1980 and 2000. As UCLA professor Ivan Lighty documented in his 2006 book, "Deflecting Immigration," those 1 million immigrants went instead to states such as Iowa, with poorly enforced wage laws.
Cracking down on the underground economy of wage violators also would also raise revenue for Iowa's state budget. The state would collect millions of dollars in unpaid unemployment insurance, workers comp and income taxes from companies that underreport wages or fail to pay them at all by misclassifying employees as independent contractors. A recent sweep in New York State found that 2,078 employers had failed to report $19 million in wages to the state through misclassification of their workers, thereby avoiding $1 million in unemployment-insurance payments alone.
Both workers and responsible employers suffer when bottom-feeding businesses violate wage laws and receive a slap on the wrist. SSB 3286 promises to not only raise wage standards for all Iowa workers but bolster state revenues - without scapegoating immigrant workers who are also the victims of scofflaw employers.
Sen. JOE BOLKCOM is a Democrat from Iowa City.