Study says LA surpasses NYC, Chicago in Wage Theft

March 8th, 2010. By AbiK

Every so often there’s a little news story out there that doesn’t get as much attention as it perhaps should. Take a story by Max Taves at LAWeekly.com not long ago. The headline: Unscrupulous Employers Skim $26.2 Million. Ok, surprise, surprise. But the real headline hits you when you read the subhead: That’s per week, from lower-income Angeleno’s paychecks.

$26.2 million per week? Rack that one up on an annual basis and now you’re talking over $1 billion in alleged wage theft.

Taves’ article (2/18/10) is based on a study co-authored by UCLA sociologist, Ruth Milkman, and Victor Narro. The 69-page study, Wage Theft and Workplace Violations in Los Angeles, concludes that 17% of LA county’s poorest workers are basically ripped off to the tune of $26.2 million each week—money they never see in their paychecks. Money that they should see in the form of minimum wage pay, overtime pay for time-and-a-half overtime worked, and rest and meal breaks. The reason, the authors argue, is that employers in LA county “know there’s no enforcement.”

What’s interesting in this study—aside from the sheer numbers involved—is that when the authors compared LA to those in NYC or Chicago, they found that LA low-wage workers were more likely to be underpaid than their counterparts in the other cities. Additionally, when you calculate the return of unpaid wages to the LA employers’ bottom lines, it represents 12.5% of workers’ paychecks; to put that in terms of an individual worker, that translates to $2,000 a year for someone earning $16,536—$2,000 that goes to the employer’s bottom line, not to the employee.

Some additional conclusions from the study:

• California’s minimum wage is $8 per hour, yet 30 percent of low-wage workers here receive less. Most of those surveyed earned less than $7.
• Overtime violations here are widespread and costly. More than 75 percent of the employees surveyed weren’t paid the mandated time-and-a-half.
• Nearly three-quarters of Angelenos who work before or after their regular shift don’t get paid for the extra time worked.
• Employers cannot legally dip into workers’ tip jars, but this happened to 19 percent of the surveyed workers earning tips.
• Almost half of employees who complained about work-site conditions or tried to form a union reported experiencing retaliation.
• Of workers injured on the job, only 4.3 percent reported filing claims for worker’s compensation over the last three years.
• Workers’ legal status, race and sex had a clear impact on whether they were paid the legal rate, and no single demographic was treated as unfairly as female illegal immigrants.
• 54% of the illegal-immigrant women involved in the study were paid less than the minimum wage.
• The employees shortchanged most often were restaurant, garment and car-wash workers, as well as janitors, home health-care workers and security guards. In fact, 60 percent of garment workers get less than the minimum wage, and a staggering 92.5 percent aren’t paid proper overtime. 

Tags: California Labor, California Overtime, Los Angeles, Milkman, Narro, Wage Theft

This was posted on Monday, March 8th, 2010 at 2:45 pm and is filed under Emerging Issues, Employment . Feel free to respond, or trackback. Read our comments policy.