When you call the Labor Department’s Wage and Hour Division (WHD), the woefully understaffed body tasked with enforcing the nation’s labor laws, you are likely to be channeled to voicemail. You’re lucky if you ever get a call back. The Government Accountability Office recently completed an investigation of the division’s efficacy in processing and investigating complaints, in which the GAO called in fictional complaints of labor law violations and observed the responses. The results were shocking. In one case, a caller in Miami left seven messages complaining that his employer had failed to give him his last paycheck, and was never called back. In several other cases WHD investigators lied about having followed up on complaints, entering them in the database as resolved, without ever having pursued them.

But the call that best sums up the current state of enforcement was a tip alerting investigators in a California office that children were working at a meatpacking plant. In the hierarchy of labor law violations, child labor occupies a category all its own. A ban on the practice was one of the first laws passed to protect workers, and to this day the prohibition serves as a marker of the developed world, the minimum threshold of decency. So when a GAO investigator called the San Jose branch office in October and left an anonymous message that children were operating “circular saws and the machine that makes hamburger meat”–during school hours, no less!–you’d think it would have triggered whatever the WHD’s version of DEFCON 3 is. Instead, the tip languished in voicemail limbo. No investigation was opened; the call was never returned.

For Kim Bobo, executive director of Interfaith Worker Justice, none of this was surprising. Bobo, the author of Wage Theft in America: Why Millions of Working Americans Are Not Getting Paid–And What We Can Do About It, is one of the nation’s leading crusaders against labor law violations. Her testimony before the House Committee on Education and Labor, in July, helped prompt committee chair George Miller to commission further GAO study, the results of which were released March 25 at a follow-up hearing. The report, Bobo said, “confirmed everything my folks around the country have been saying the last few years, and people looked at us like we were nuts.”

The problems reveal a bureaucracy crippled by eight years of malign neglect and insidious, termitic decay. Former Labor Secretary Elaine Chao may go down as the most anti-labor secretary in that department’s history, and she was the only member of the Bush cabinet to serve all eight years. Her tenure took its toll. “You had a group of people who simply didn’t believe in the Department of Labor’s mission in charge of the department,” says Alex Bastani, a twenty-two-year veteran of the Bureau of Labor Statistics who is president of the American Federal Government Employees union local at the department. For instance: Glenn Spencer, the man leading the Chamber of Commerce’s efforts against the Employee Free Choice Act, was Chao’s acting chief of staff. “A lot of good people were fighting back against this,” says Bastani, “and a lot of them simply had to retire because they couldn’t take it anymore…. Morale is very low.”

So are resources. In 1941, when the WHD was overseeing compliance for 15.5 million eligible workers, it employed nearly 1,800 full-time investigators and undertook almost 50,000 investigations. By 2007, WHD oversaw 130 million workers but had only 750 investigators, less than half the number it had had sixty years earlier. The number of workers per investigator has grown twentyfold, and there are only half as many investigations.

This is a recipe for rampant lawlessness because, as Bobo writes, “ethical employers are placed at a competitive disadvantage by employers who steal wages from workers.” By one estimate, employers steal $19 billion just in unpaid overtime every year. And among undocumented day laborers–the population most vulnerable to intimidation–wage theft is ubiquitous, Bobo says. The problem has grown to “epidemic proportions.”

A palpable sense that investigators feel overwhelmed shows up in the transcripts of the GAO probe. After fielding a complaint from a fictional receptionist who hadn’t received his last paycheck, and subsequently being rebuffed by the (fictional) employer, who pled penury, an exasperated and overworked WHD investigator told the complainant, almost apologetically: “I explained the law to her. She knows that she needs to pay you. It’s just that she’s saying she doesn’t have the money to. I can’t wring blood from a stone. I’m bound by the laws I’m able to enforce, the money the Congress gives us and all of that lovely stuff. If you are having a problem with what our office is capable of achieving, based on the laws that were written, then you need to write your Congressman. OK, do you know who your Congressmen are? I mean, we can use all the help we can get.”

Some help appears to be on the way. “To those who have for too long abused workers, put them in harm’s way, denied them fair pay,” new Labor Secretary Hilda Solis said at her swearing-in ceremony, “let me be clear: there is a new sheriff in town.” The agency has already authorized the hiring of 250 more Wage and Hour investigators (with 100 funded by the recovery act and tasked with monitoring compliance on recovery-related projects). For the department’s solicitor, the top enforcement position, Obama has nominated Patricia Smith, who served as commissioner of the New York State Labor Department. There she won plaudits for a variety of innovative enforcement initiatives, including partnerships with nonprofits and an anonymous, crime-fighters-style hot line.

But remaking the Labor Department is just part of the larger challenge the Obama administration faces, which is restoring the efficacy and competence of a federal workforce beaten down by mismanagement, outsourcing and contempt from its putative leaders. Despite decades of conservative invective about the existential incompetence of bureaucracies, they are not destined to be ineffectual backwaters. Recent data released by the Office of Personnel Management show a massive degree of variability in the performance of agencies within the government, with the Nuclear Regulatory Commission and the National Science Foundation ranking at the top and the Broadcasting Board of Governors and Transportation Department at the bottom. (The Labor Department is in the lower half, but not at the bottom–which is, um, disturbing.)

These rankings aren’t static. Under President George H.W. Bush, FEMA was a basket case, botching the response to Hurricane Andrew and characterized in one Congressional report as “a political dumping ground, a turkey farm, if you will, where large numbers of positions exist that can be conveniently and quietly filled by political appointment.” In 1993 Clinton elevated FEMA to cabinet status and appointed James Lee Witt to head it. Under Witt, FEMA experienced what is widely acknowledged as one of the most remarkable turnarounds in recent memory.

We all know what happened after Witt left. Like cities, effective bureaucracies take a very long time to build but can be destroyed rather quickly.