January has seen the minimum wage emerge as a major issue in 2012 policy debates, with a virtual consensus for raising the wage emerging among all but the extreme conservative fringe. Prominent conservatives from former Massachusetts Governor Willard “Mitt” Romney to New York City Mayor Michael Bloomberg have come forward urging just that the minimum wage be raised automatically every year. State legislators championing minimum wage increases are also playing a pivotal role in driving the salience of inequality and economic security issues on the national stage.
Over the past two years, workers have made impressive advances in about a half dozen states to protect themselves and their livelihoods from unscrupulous employers. But conservatives are increasingly mobilizing to undo these gains. Two separate efforts within the past month alone would make it harder for workers to recover stolen wages from employers — completely ignoring overwhelming public support for labor standards that safeguard workers’ rights and narrowly safeguarding the interests of the 1%.
Secretary of Labor Hilda Solis last week announced a new state-federal program to crack down on a form of payroll fraud that has run rampant over the last decade. Absent stronger enforcement of labor standards, employers are going to great lengths to cash in by defrauding their workers and leaving taxpayers with the bill. Just this week, a NYC construction firm has been accused of using front companies to dodge union contracts. The unions allege the company used low-wage workers to pocket $7 million in wages and benefits from 2007-2011. A much more common and mundane way for employers to pad their bottom lines is by misclassifying employees as independent contractors. Through misclassification, companies can simultaneously defraud workers of minimum wage and overtime and dodge a variety of state and federal taxes: payroll, income, unemployment insurance, and workers compensation. Prosecuting the practice, and deterring employers from engaging in it, is both a vital way to protect working families’ economic security and an important measure to alleviate state and federal revenue crises.