Quantcast

This Week in Poverty: Wage Theft in the City of Millionaires | The Nation

  •  

Greg Kaufmann

Poverty in America: people, politics and policy.

This Week in Poverty: Wage Theft in the City of Millionaires

For two years running Houston has added more millionaires to its population than any other city in the United States. Near-millionaires are enjoying some nice upward mobility, especially those involved in the oil and gas industry.

Low-wage workers, on the other hand, aren’t faring too well in the city. In fact, a recent report from Houston Interfaith Worker Justice (HIWJ) estimates that low-wage workers lose $753.2 million annually due to wage theft. Wage theft can occur in many ways, including: workers being denied the minimum wage or overtime pay; stolen tips; illegal deductions from paychecks; people being forced to work off the clock; or workers getting misclassified as independent contractors so they aren’t entitled to overtime or benefits.

“We’re not talking about a worker here or a worker there, it’s something that has a lot of ripple effects,” says José Eduardo Sanchez, campaign organizer with HIWJ. “It impacts families, communities and local economies.”

Although there are laws on the books against wage theft, there are problems with understaffing, enforcement, and jurisdiction disputes in institutions like the Department of Labor’s Wage and Hour Division, the Texas Workforce Commission, and the courts.

HIWJ—a nonprofit organization helping low-wage workers learn about their workplace rights and organizing to improve working conditions—recently took decisive action. The group drafted an ordinance that would protect workers from retaliation for reporting violations; allow workers who file a complaint to receive a fair hearing; and require employers to pay back not only the stolen wages but also damages, in order to create a real disincentive for repeat offenses. Currently, an employer in Houston only needs to pay the wages owed and then can move on. Why wouldn’t a bad actor simply repeat the behavior and hope to get away with it next time?

The city’s Legal Department initially analyzed the proposal and said that wage theft is addressed by state statute. But Mayor Annise Parker’s office contacted HIWJ to express her interest. HIWJ is now working with her administration on policy proposals that would create a process for a fair hearing and link wage theft violations to the suspension and revocation of city licenses, permits and contracts. Other options to collect additional damages from employers are being explored as well.

Sanchez says the mayor’s action was “surprising” given the initial response from the city.

“But now it’s a matter of holding the politicians accountable and really pushing for enforceable aspects of this legislation,” says Sanchez. “Because there’s an easy way for this to become one of those good policies on paper—nice sentiment, nice words—but not enforceable.”

Part of that accountability involves bringing the issue to the forefront of the public’s attention. As Kim Bobo, executive director of the national IWJ has written, “This is the crime that no one talks about.” Sanchez says the campaign has been very successful in getting a broad range of print media and Spanish-language broadcast media to cover the issue and, more recently, mainstream television is reporting on it too.

HIWJ is also working with neighborhoods hit especially hard by wage theft—predominately low-wage and immigrant communities—“to build worker power, build community power, and be able to show that to the mayor,” says Sanchez.

“We need to make it clear that this is not just a bunch of community organizations that think this should happen, but real Houstonians dealing with this, real community businesses dealing with it,” says Sanchez. “We’re also creating an environment where a worker can feel safe in reporting a violation. Because if there’s not a community there for support and to help uphold these rights, then workers will just stay silent.”

Immigrant workers are particularly susceptible to threats by employers. Although immigration status isn’t asked in the process of a wage theft investigation, workers are still often reluctant to come forward.

“We tell workers that regardless of immigration status, everyone has the same right to be paid for their work,” says Sanchez. “We’re working to build trust between workers and enforcement agencies, but in the meantime, we like to serve as mediator between them. So the workers know they have the whole organization, the whole coalition, backing them up.”

Sanchez notes that wage theft in Houston—the nation’s fourth-largest city—“is part of a trend that’s growing in this economy and we need to look at it in the context of the bigger picture.”

Indeed, a 2009 study concluded that in Chicago, New York and Los Angeles alone workers lost $56.4 million per week due to wage theft, a cool $2.5 billion annually. National Interfaith Worker Justice is currently working with local affiliates that are leading campaigns for statewide wage theft ordinances in Iowa and New Jersey, and for local ordinances in Memphis and Grand Rapids. Legislation is also being considered in Arkansas, Denver and a number of counties in Florida. South Florida IWJ led a coalition that helped pass model legislation in Miami-Dade County too.

“We are really building momentum in areas that are not typically considered places where you would think progressive worker legislation would be happening,” says Dianne Enriquez, coordinator of IWJ’s network of twenty-seven worker centers and lead coordinator of the wage theft campaign.

Enriquez notes that the business community is particularly catching on to the importance of cracking down on wage theft. In fact, the Grand Rapids bill was co-authored by a former president of the city’s Chamber of Commerce.

“This is an issue that affects the broader community and it’s rampant across all industries, and different kinds of sectors and workers,” says Enriquez. “It makes sense to level the playing field. It’s good for the community, it’s good for the business community.”

Every day, Enriquez hears about a new campaign that is pushing for local wage theft legislation. She’s confident that these local actions are creating momentum for a push for national legislation in the near future.

“People are tired of waiting for the federal government to put resources into enforcing laws that are on the books,” says Enriquez. “People aren’t getting paid the minimum wage, or any wages in many cases, they’re not getting paid overtime. So it’s exciting to see that this is something that’s really building right now.”

You can get involved here.

Paul Ryan’s Tuchus

I can’t tell you how tired I am of writing about this guy, but the dude is out there lying his tuchus off—as my grandparents would say—about poverty, so what choice does a guy on the poverty beat really have?

Here’s his latest—at the Reagan Library this week: “We’re not measuring outcomes. Are these programs working? Are people getting out of poverty? Shouldn’t that be our goal? Look at the results of the government-centered approach to the war on poverty. One in six Americans are [sic] in poverty today—the highest rate in a generation. In this war on poverty, poverty is winning…. Our budget builds on the historic welfare reforms of the 1990s—reforms proven to work. We aim to empower state and local governments, communities, and individuals—those closest to the problem.”

People kept above the poverty line by benefits

Let’s take the first part, first: uh… we are measuring outcomes. Here are some examples of policy outcomes, based on Census data: in 2010 alone, Social Security kept 20.3 million people above the poverty line ($22,314 for a family of four) and unemployment benefits kept 4.6 million people out of poverty. Food stamps aren’t counted in the official poverty measure, but they helped 4.4 million people stay above the poverty line. The Earned Income Tax Credit and Child Tax Credit aren’t officially counted either, but they kept 9.3 million people out of poverty. In all, the Center on Budget and Policy Priorities has demonstrated that without the safety net, poverty would have been almost twice as high in 2010—nearly 30 percent of the population! An additional 40 million people would be in poverty if not for these critical “government-centered” approaches.

But Ryan points to the existence of poverty as proof that antipoverty programs aren’t working. It’s like saying clean air and clean water laws aren’t working because there is still pollution… so we should get rid of them?

Secondly, Ryan asserts that his budget builds on 1996 welfare reform—“reforms proven to work.” He’s hardly alone in this rose-colored take on the Clinton-Gingrich deal, and it’s actually totally legit—provided that one remains completely oblivious to the facts.

Prior to welfare reform, cash assistance helped 68 of every 100 families with children in poverty through the Aid to Families with Dependent Children (AFDC) program. The legislation replaced AFDC with the Temporary Assistance for Needy Families (TANF) program which now reaches just 27 of every 100 families with children in poverty. Why? Because welfare reform “empowered states” to decide whether to give cash assistance to people or spend the money elsewhere, and also froze the TANF block grant at the 1996 level without indexing it to inflation so the dollars don’t go nearly as far now. In fact, its value has eroded by more than 30 percent since the block grant was created.

Additionally, welfare reform has led to an increase in the number of people living in deep poverty—living on less than about $11,000 for a family of four—as more families are forced to go without any cash assistance at all. The number of people in deep poverty climbed from 12.6 million people in 2000 to an astonishing 20.5 million people, or 6.7 percent of the population, in 2010. An estimated 6 million people—2 percent of the population—have no income other than food stamps.

Ryan is now attempting to whitewash history as he propose to once again “empower state and local governments” by block granting Medicaid and food stamps and gutting other federal programs targeting low-income people. It’s important to remember exactly how well that approach worked out for poor people the last time around.

This Week in Poverty/Witnesses to Hunger

I am very pleased to announce a new collaboration between Witnesses to Hunger—a project in which people living in poverty use photographs and testimonials to advocate for change at the local, state and national levels—and This Week in Poverty.

“This is a picture of some of us Witnesses to Hunger showing the world our sisterly love.” Photo and caption by Imani S., Philadelphia

Witness photographers who grant TheNation.com permission will occasionally have their photographs featured on this blog. Besides the fact that the photos will be visually stimulating and relevant, their use will hopefully bring some more deserved attention to the Witnesses good work.

So far, Witnesses Tianna G., Sherita P., Whitney H., Imani S., and Bonita C. have all agreed to participate in this effort.

In Illinois, Poor Are Screwed One Way or Another

Last month I wrote about Illinois having insufficient funds to meet its Temporary Assistance to Needy Families (TANF)—or cash assistance—obligations through the fiscal year ending in June. This was particularly disturbing since the state provides benefits to just 13 of every 100 families with children in poverty, according to the Center on Budget and Policy Priorities.

Governor Pat Quinn asked the legislature for a $73 million supplemental appropriation to pay for the shortfall. In the event the General Assembly didn’t approve it, the state planned to pay for TANF by diverting money that the Illinois Department of Human Services (IDHS) had intended to use to fund the childcare assistance program.

Dan Lesser, director of economic justice at the Shriver Center in Chicago, told me such a maneuver would mean “a real possibility of crashing the state’s childcare system.” He noted that the facilities weren’t well capitalized and most of them don’t have access to credit.

“We’re definitely looking at missed payrolls, facility closings and thousands of families without access to childcare in the very communities that are the most vulnerable to further economic hits,” said Lesser.

Turns out, he was right.

The week after the post, IDHS sent a notice to the 35,000 homes and centers participating in the child care assistance program informing them that unless a supplemental appropriation was approved, they would receive no payments until July for services rendered in April, May and June.

The notice created an uproar among parents and childcare providers, and there were large rallies at the State Capitol organized by SEIU Healthcare Illinois and Illinois Action for Children. The issue also received wide media coverage.

The legislators felt sufficient pressure to approve the $73 million childcare supplemental appropriation last week and Governor Quinn signed it into law last Friday.

Unfortunately, the Governor also signed a companion bill that delays and reduces the assistance provided to TANF recipients. The bill reinstates the pre-Recession policy of taking up to forty-five days to process new TANF applications and then paying assistance retroactively to the thirtieth day after the application date. TANF reform legislation had previously required applications to be processed within thirty days, with assistance paid retroactively to the date the application was filed. Governor Quinn had proposed a return to the old system in his Fiscal Year 2013 budget and the Republicans insisted on it in exchange for their vote for the supplemental appropriation.

“What this means is the poorest and most vulnerable families in our state will again have to wait up to forty-five days to receive any assistance and such assistance will cover one month less than it did previously,” says Lesser. “This will impose a significant hardship on poor families. Most people don’t apply for TANF until they have exhausted their other financial and family resources so this change in program rules will affect families precisely when they are at their most vulnerable.”

California: Dazed and Confused by Drug Stigma

In California, people with convictions for non-violent drug-related offenses are banned for life from receiving TANF cash assistance (called “CalWORKs”), as they are in twelve other states. It doesn’t matter how long ago an individual was convicted, whether someone has gone through treatment, or if a person is a parent... Convicted of a drug-related offense? No TANF for you.

The Western Center on Law and Poverty sponsored a bill that would have ended this practice in the state, allowing people completing drug treatment to be eligible for assistance, including employment services, childcare and transportation assistance, and small basic needs grants as long as they met TANF’s mandatory work requirement.

It was a timely proposal, considering that last year the state decided to release people with nonviolent drug convictions from overcrowded state prisons. The policy forced counties to think anew about ways to ensure successful re-entry for an increasing number of formerly incarcerated people, including many more who are returning home to children than ever before.

The County Welfare Directors Association was a co-sponsor of the legislation, arguing that lifting lifetime bans to CalWORKs and food stamps would result in the state’s spending a little more in case management and basic needs assistance in the short-run, but far less in the long-run as more people successfully reenter their communities. Providing basic needs support to people leaving prison is widely believed to be a key strategy in reducing recidivism—people have greater access to housing (rather than crashing with others who might have drug issues), more access to work opportunities and a greater ability to feed their families.

Unfortunately, the Senate Appropriations Committee didn’t agree with the counties, demonstrating once again that no logic is strong enough to counter the drug stigma.

“A lifetime of hunger and poverty is not a fair punishment for a nonviolent drug offense and certainly unwarranted for children of people with prior drug convictions,” said Jessica Bartholow, legislative advocate with the Western Center on Law and Poverty. “Everyone makes mistakes and should get a chance to start over. CalWORKs support services and case management could really benefit families as they take those important first steps toward a new life.”

This summer, a similar bill will be taken up to address lifetime bans on receiving food stamps. Stay tuned.

Notable Studies/Reports

Stepping Up for Kids: What Government and Communities Should Do to Support Kinship Families,” Annie E. Casey Foundation. Recent data show that extended family members and close family friends care for more than 2.7 million children in the US, an increase of almost 18 percent over the past decade. An estimated 9 percent of youth will live with extended family for at least three consecutive months at some point before age 18. Read this report to learn about the challenges faced by these families and what government and communities can do to provide support

Increasing Employment Stability and Earnings for Low-Wage Workers,” MDRC. The Employment Retention and Advancement (ERA) project was launched in 1999 to determine the effectiveness of different program strategies designed to promote employment stability and earnings growth among current or former welfare recipients and other low-income individuals. This report focuses on twelve programs aimed at improving job retention and advancement. This study suggests that three programs seemed to make a difference but the other nine did not, and “the improvements were not transformational…. most sample members remained poor or near-poor at the end of the study.”

Strengthening Higher Education Access & Affordability,” National Community Tax Coalition (NCTC). The Federal Application for Federal Student Aid (FAFSA) remains a substantial barrier to accessing financial aid for low-income students. New research shows that assisting these students in the FAFSA application process at tax time—which NCTC’s Financial Aid U program has done since 2008—substantially increases their likelihood of college enrollment. This policy brief outlines the various financial barriers that low-income and first-generation students face when trying to fund their higher education. It also highlights successful programs that have been able to increase access to much-needed financial aid, grants, scholarships and other tuition support.

Upcoming Events

National Energy and Utility Affordability Conference, June 11-13, New Orleans. The largest gathering of people building awareness about energy poverty and working on energy-related issues that affect low-income households. This year’s conference will explore energy availability and sustainability, weatherization and energy efficiency, energy assistance and education and much more.

Mike Elk’s Birthday Bash, June 2, Washington DC. Great dude, awesome labor reporter. Come to DC—you’ll find it.

Articles and Other Resources

Democracy Now! Interview with Peter Edelman
Athens County Town a Symbol of Aching Need in Appalachia,” Ignazio Messina
Poverty Increasing Among Retirees,” Emily Brandon
Rural Poor Face Unique Challenges,” Ignazio Messina
Payday Loan Bill Invites Greed,” Philadelphia Inquirer
Poverty & Politics: Southern Ohio Part 1, Part 2Toledo Blade
2011: Food Stamp Participation Increased 7.2%; TANF Participation Fell 3.6%” Tim Casey
How Zero Weeks of Paid Maternity Leave in US Compares Globally,” Amanda Peterson Beadle

Vital Statistics

US poverty (less than $22,314 for a family of four): 46 million people, 15.1 percent of population.

Children in poverty: 16.4 million, 22 percent of all children, including 40 percent of African-American children and 37 percent of Latino children.

Number of poor children receiving cash aid: one in five.

Poverty rate for people in female-headed families: 42 percent.

Poverty rate for children under age 5 in female-headed families: 59 percent.

Single mothers with incomes under $25,000: 50 percent.

Single mothers working: 67 percent.

Deep poverty (less than $11,157 for a family of four): 20.5 million people, 6.7 percent of population. Up from 12.6 million in 2000.

Increase in deep poverty, 1976-2010: doubled—3.3 percent of population to 6.7 percent.

Americans with no income other than food stamps: 6 million, 2 percent of population.

Twice the poverty level (less than $44,628 for a family of four): 103 million people, roughly 1 in 3 Americans.

Families receiving cash assistance, 1996: 68 of every 100 families with children living in poverty.

Families receiving cash assistance, 2010: 27 of every 100 families with children living in poverty.

Impact of public policy, 2010: without government assistance, poverty would have been twice as high—nearly 30 percent of population.

Quote of the Week

“It’s just not sufficiently in our conversation that there are 103 million people who have incomes below twice the poverty line, below $36,000 for a family of three. And those are people who are struggling every day. They’re not poor. They don’t think of themselves as poor. But they are definitely having a huge difficulty in making ends meet every month.”
                                    —Peter Edelman on Democracy Now!

This Week in Poverty posts every Friday morning. Please comment below. You can also e-mail me at WeekInPoverty@me.com and follow me on Twitter.

Before commenting, please read our Community Guidelines.