"The greatness and the genuine trait of your thought and writings lie on the fact that you positively and interestingly make use of philosophical thoughts and thoughtfulness in order to deeply and concretely cogitate about America's social issues. . . . This does not mean that your thought is reducible to your era: your thought, being inspired by issues characterizing your era . . . , overcomes your era and will still likely be up to date even after your era, for future generations." Bruno Valentin

Monday, September 1, 2014

Wage Theft: More Companies Flouting Trust

If you are playing by the rules, not trying to cut corners at others’ expense, you need not let the bastards get you down. Of course, if your detractors catch you with your hand in the cookie jar, then blaming them only confirms that a sordid character flaw undergirds the stealing. As a business strategy, accusing union officials of having an agenda simply because they have identified cases of wage theft by the company is not exactly good public relations; in fact, the ploy sends a message that the managers at the helm are more interested in shifting the spotlight onto distractions than “manning up” to take responsibility for the unethical and illegal conduct at the employees’ expense.

The New York Times reported at the end of August, 2014 that a virtual flood of cases had recently arisen that “accuse employers of violating minimum wage and overtime laws, erasing work hours and wrongfully taking employees’ tips.”[1] U.S. and member-state officials asserted at the time “that more companies are violating wage laws than ever before, pointing to the record number of enforcement actions.”[2] The U.S. Labor Department had uncovered nearly $1 billion in illegally unpaid wages since 2010.[3] Julie Su, the California labor commissioner, notes that her agency “has found more wages being stolen from workers in California than any time in history. This has spread to multiple industries across many sectors. It’s affected not just minimum-wage workers, but also middle-class workers.”[4] Some substratum must be behind the trend.

Even as the officials pointed an increasing number of companies flouting wage laws, many business groups countered “that government officials have drummed up a flurry of wage enforcement actions, largely to score points with union allies.”[5] That the actions have stuck, however, means that they were not “drummed up.”

For example, a federal appeals court in California ruled in August, 2014 “that FedEx had in effect committed wage theft by insisting that its drivers were independent contractors rather than employees. FedEx orders many drivers to work 10 hours a day, but does not pay them overtime, which is required only for employees.”[6] Rather than admit that the loophole bit was up, the company’s management decided to appeal. To the extent that the business lobby has undue influence in Congress and the California legislature, FedEx can have greater confidence that pursuing a distinction beyond recognition will pan out. No shame, the government officials would likely say.

David Weil, the director of the federal Labor Department’s wage and hour division, points to the increased use of franchise operators, subcontractors and temp agencies as providing tempting cover for managers who want to reduce costs by cutting labor corners. “We have a change in the structure of work that is then compounded by a falling level of what is viewed as acceptable in the workplace in terms of how you treat people and how you regard the law,” he said.[7] This points to a sordid mentality below the orientation to keep costs down, which, as a fully legitimate managerial accounting tactic, is ubiquitous in business.

Michael Rubin, one of the lawyers who had recently won a $21 million settlement on wage theft by the U.S. trucking company, Schneider, opines that the “reason there is so much wage theft is many employers think there is little chance of getting caught.”[8] If that’s true, the virtuous citizenry so necessary to sustaining the rule of law over the long haul may be crumbling in esteemed places; for with widespread disrespect for the law under the arrogant presumption that the law does not apply to oneself, enforcement can hardly catch up.

Reacting to the $17 million in wage claims recovered over the last three years, Eric Schneiderman, New York’s attorney general, remarks, “I’m amazed at how petty and abusive some of these practices are. Cutting corners is increasingly seen as a sign of libertarianism rather than the theft that it really is.”[9] To break the law for something petty demonstrates among other things a mentality wherein little things are magnified as if they were big things. The abusiveness may point to a rising level of passive aggression in society generally, including by functionaries using what little authority they have to inflict spite onto other people deemed even lower than themselves, and thus inferior.

Trust inevitably breaks down in a society in which people flaunt the law and have no ethical problem harming others by unfairly taking from them. Our species does not naturally do very well living among so many strangers—over 150 to be exact. Our shift from living in small hunter-gatherer bands to larger, more complex social arrangements required the invention of ways to have enough confidence in strangers to live among them without being in a state of constant anxiety. Without faith in money, for example, we can no longer trust that work done will translate into some future benefit as compensation for the labor expended. Even with faith in money as a symbol standing for value, trust in an agreed upon translation is necessary to large-scale productive enterprises being able to function. In other words, in being reckless over petty matters, more and more companies may have been putting their very bedrock at risk in the years after the financial crisis of 2008 while being too petty, proud, and even vindictive to realize the increasing systemic risk from in their willful shirking of legal and ethical responsibilities.



[1] Steven Greenhouse, “More Workers Are Claiming ‘Wage Theft,’” The New York Times, August 31, 2014.
[2] Ibid.
[3] Ibid.
[4] Ibid.
[5] Ibid.
[6] Ibid.
[7] Ibid.
[8] Ibid.
[9] Ibid.