Wage Theft: How $50 Billion Dollars Per Year Is Stolen From American Workers [Opinion]

Wage theft has become routine in America, and the increasing prevalence of the predatory practice is costing workers billions of dollars a year. While this widespread problem is detrimental to the economy as a whole, it is particularly disastrous for anyone caught living paycheck to paycheck.

Wage theft can be disguised in many different ways, ranging from the blatant, such as the refusal to pay minimum wage and the failure to pay overtime, to the more insidious, such as the practice of increasing responsibilities without a corresponding increase in salary.

In 2012 alone, $933 million was recovered by various governmental agencies for victims of wage theft.

In 2014, research by the Economic Policy Institute found that American workers lose up to $50 billion annually to employers who engage in various forms of wage theft, including skirting minimum wage and overtime laws, withholding tips, and taking illegal pay deductions.

Burglar dressed in black with ill-gotten gains
[Image by Ljupco/iStock]

According to studies, wage theft mostly affects women and people of color and is most common in industries such as textile manufacturing and child care. However, while warehouse, retail, and service industries also rated high for wage theft, this issue is certainly not limited to blue collar work. In fact, a full 90 percent of U.S. industries have reported violations related to overtime pay, making wage theft an extremely widespread problem that plagues workers across the board.

In an article for the Week, Jeff Spross analyzed the issue, explaining that perpetrators of wage theft often target the most vulnerable.

“Americans who get hit hardest by wage theft tend to be the most vulnerable workers with the least power: low-paid, often in service work, often racial minorities or part of marginalized social groups.”

An article for Salon also pointed out that wage theft hurts not only the employee, but also taxpayers and honest business owners.

“While heart-breaking for employees, wage theft also robs federal and state treasuries of many billions of dollars in taxes, and puts employers who play by the rules at a serious competitive disadvantage.”

Criminal charges are often filed when an employee is caught stealing from their employer. However, when the tables are turned and the employer is stealing from the employee, the offender will often receive a slap on the wrist at most. Prisons are full of people serving time for petty theft and non-violent drug charges, but when millions of dollars are stolen from hard-working Americans, rarely is an arrest made. Instead, wage theft is treated as a civil matter in most states, and those found guilty oftentimes only pay a relatively small fine.

For example, take CKE Restaurants CEO Andy Puzder, who has been embroiled in multiple wage theft scandals in the past, and who also happens to be President Trump’s pick for labor secretary. According to Mother Jones, Puzder, who has made millions of dollars in bonuses alone, has seen CKE Restaurants hit with multiple suits alleging wage theft during his time as CEO. In one suit, CKE Restaurants was forced to pay $9 million to settle overtime claims.

Apparently, however, overseeing a company that has repeatedly stolen from its own employees is not only not a criminal offense, but it’s also not even a serious enough issue to disqualify a person from an Executive Cabinet position. Instead, the massive money mismanagement, to put it generously, is so inconsequential that Puzder has now been nominated by Donald Trump, the self-proclaimed billionaire-turned-president of the United States, as the most qualified person in America to stand up for worker’s rights.


But that’s not all. In another egregious example of wage theft, millions of dollars were stolen from workers by franchisees of a popular pizza chain. In 2015, Papa John’s found itself in hot water when four store owners admitted to violating minimum wage and overtime laws. While their actions negatively affected 250 workers and stretched back to 2008, only one arrest was ever made, and the arrestee, who owned nine locations, received a plea deal that included sentencing of only 60 days.

Wage theft violators have often used the franchise system to dodge responsibly, however, the Huffington Post reported that some state and federal regulators have been legally challenging that system in recent years.

“The National Labor Relations Board has moved to name fast food companies like McDonald’s as “joint employers” alongside franchisees when it comes to labor law violations. Meanwhile, workers who’ve filed class-action suits against their franchisee employers have also sought to have the big fast food brands named as co-defendants in the cases.”

Until those at the top of the ladder are held to the same standards as those who are struggling to climb the ladder, the economy will continue to suffer. Wage theft is a serious crime against the most vulnerable, and America must stop worshipping profit at any cost long enough to hold the perpetrators accountable.

[Featured Image by YinYang/iStock]