Gangster capitalism: Don’t pay the workers
By Leo Canty
Published: Thursday, November 19, 2009 12:08 PM EST
Free-market capitalists and some media pundits are among the loudest voices bemoaning the stress of broken backs from too much government. The noise is so loud that many have begun to believe that government regulation, monitoring, and enforcement is a bad thing.
Well, it is — if playing fair hampers your profits.
The market credo asserts that profits come by raising prices or cutting costs. This economy favors the latter. So, turning off lights, firing workers, buying cheap pencils, cutting wages and benefits, or just not paying people are among the many cost-cutting tricks that can be found in the magic profits kit.
Not paying people?
Yes, that trick seems to have become quite popular.
The trick is to just forget to pay the workers for their time on the job or — oops — use the wrong pay rate. Maybe put the old batteries in the little handheld payroll calculator to knock the OT calculations off a bit — in favor of the company, coincidentally.
Labor laws have their weaknesses and loopholes. They are sometimes a bit confusing and enforcement may not be at peak. So, with those conditions in place, the unchecked “oops” factor is becoming more common. That’s evidenced by the rising “mistakes” rate.
If making “mistakes” is easy, cheating is even less work.
Walmart, with thousands of employees in many states, has regularly been caught making wage and hour “mistakes.” In a recent combined class-action court case in Nevada, the judge found that the retail giant, and pillar of the community had failed to give its workers their entitled rest and meal breaks, skipped overtime pay, and doctored time cards to keep overtime down — 1.5 million times.
That case, with its $65 million-plus payback, is one of many brought against the company as its totals now exceed hundreds of millions of dollars in back wage and penalty payments.
Save money. Live better. No consequences.
And Walmart is not alone.
It shouldn’t work like that, but if lawsuits, penalties, and wage settlements cost less than paying for overtime, extra hours, or working lunches, then, sadly enough, it sounds like a profitable business decision to let a judge assess the wage payouts.
Gary K. Pechie, the director of Connecticut’s Department of Labor Wage and Workplace Standards Division, has seen a noticeable increase in inquiries, “mistakes,” and outright cheating here in our state.
In fiscal year 2008-09 the 30 crackerjack investigators in his department worked full speed and got $8.1 million paid back to workers whose bosses kept their cash. That was about a 12 percent increase over the previous year.
At a news conference state Sen. Edith Prague and Attorney General Richard Blumenthal asked why a contractor that has violated wage and hour rules, and was banned from Massachusetts state contracts, was still awarded a contract by our state’s Department of Transportation. There’s disagreement over the rules and eligibility for violators.
It shows how our system isn’t protecting us.
Worry not, the cavalry is coming.
Many states are tightening rules, boosting fines, and enforcement. U.S. Secretary of Labor Hilda Solis is at it too. She’s expanding the U.S. Department of Labor wage and hour investigative unit to hunt down more cheaters and “mistakes.” Connecticut’s federal DOL investigation unit will expand by 33 percent, from 9 to 12 people. They will work in tandem with Pechie’s crew, chasing the wage scofflaws.
We have a couple million people employed at tens of thousands of workplaces. I don’t doubt the ability, energy, and effectiveness of every one of our 40-plus Connecticut investigators chasing wage and hour violators and protecting our paychecks. Just think what 80 or 160 investigators could do.
Seems to me we have a case — that’s not an isolated one — where it makes sense to add a bit more government to guarantee fair and just outcomes. Sure, CBIA and the Chamber of Commerce may scream like banshees. But, really, should one’s labor and honest wages be the subsidy for the ill-gotten gains of any boss? Not in my book.
That’s not free-market capitalism. It’s gangster capitalism. And we all should be breaking our backs to stop it.
Leo Canty is a labor and political activist. He lives in Windsor.