The American Prospect: Wage Theft Is a Real National Emergency

As President Trump scrambles to convince us that not having a wall is suddenly a “national emergency,” progressive lawmakers and advocates have pointed out that the most dire emergencies facing the U.S. are the imaginary and real crises manufactured by Trump himself.

One case in point is wage theft, or more specifically, the endemic cheating of workers in low-wage industries out of their pay. This ubiquitous, under-the-radar problem has only gotten worse in response to the Trump administration’s harsh immigration policies and talking points crafted in response to problems that do not exist.

It’s no secret that traditionally low-wage industries in the United States—including agriculture, construction, manufacturing, and service industries—have long relied heavily on immigrants, many of whom lack immigration status or work authorization. In November 2018, the Pew Research Center reported that in 2016, there were 10.7 million undocumented workers in the U.S., of whom 7.8 million (or 4.8 percent of the labor force) were working or looking for work. And the vast majority (two-thirds) of undocumented adults had lived in the U.S. for more than a decade.

Meanwhile, immigrant workers pay billions of dollars in taxes. California State Controller Betty Yee estimates that immigrants without work authorization contributed more than $180 billion to that state’s economy in 2017 alone. Federal and state laws that are designed to provide workers with basic protections—like the right to a minimum wage, overtime pay, and a safe and healthy workplace—apply to all workers in the United States, regardless of immigration status, and they have a right to complain to the government when their employer is violating those laws. Employers are also prohibited from threatening, intimidating, or in any other way retaliating against any worker because they’ve asserted their rights under the law.

These laws are intended to protect all workers from exploitation, and to eliminate employer incentives to hire—and underpay—workers who lack status over those who have it. Notwithstanding these legal protections, violations are rampant. According to a May 2017 report from the Economic Policy Institute, 2.4 million workers in the ten largest states lose $8 billion annually to minimum wage violations alone. Extrapolating nationwide, this suggests that workers are losing more than $15 billion per year, without even including overtime violations.

Other studies clearly show that workers who lack immigration status are disproportionately affected. For example, the landmark 2009 study “Broken Laws, Unprotected Workers” found that 37 percent of undocumented immigrant workers surveyed were victims of minimum wage violations in the prior week, compared with 24 percent for immigrants with work authorization and 16 percent for U.S.-born workers.

Regardless of their immigration status, workers in low-wage, non-union workplaces generally lack bargaining power and rarely complain about abusive work conditions because they need the job. Immigrant workers in particular suffer rampant wage theft because they fear—often due to actual threats—that their employers will report them to federal immigration enforcement authorities if they complain. This power dynamic, as a 2018 EPI report recognizes, “also undercuts the bargaining power of U.S. workers who work side by side with unauthorized immigrants.”

To be sure, these fears of retaliation predate the Trump administration. But the administration’s tough talk and indiscriminate deportation policies have amplified the wage theft crisis.  Under the prior administration, immigration authorities exercised prosecutorial discretion by focusing their enforcement efforts on unauthorized immigrants who had re-entered the U.S. multiple times or had serious criminal convictions.

The Trump administration has rescinded that mandate, expanding Immigration and Customs Enforcement’s cross-hairs to an ever-expanding pool. As Acting ICE Director Thomas Homan told Congress: “If you’re in this country illegally … [y]ou should look over your shoulder, and you need to be worried.”

No single act will extinguish the wage theft fire that scorches so many low-wage workers every day.

No single act will extinguish the wage theft fire that scorches so many low-wage workers every day. A critical part of the solution will be federal immigration reform that provides legalization and a path to citizenship for the approximately 11 million unauthorized immigrants in this country. But short of that, the president or more plausibly, his successorshould declare that ICE will not pursue unauthorized immigrants who are otherwise law-abiding, longstanding community members. Such a policy, implemented and well-publicized, would go far to defang those employers who have heretofore terrorized their workers with credible threats of deportation.

A new administration should prioritize those cases where employers retaliate in any fashion against workers who assert their rights. They should broadcast the message that managers who threaten and intimidate their workers are violating the law, and will face serious consequences. Those consequences should include the full panoply of civil remedies for workers victimized by abuse, including compensatory and punitive damages, available regardless of the workers’ documentation status. Criminal prosecution might also be warranted, especially in cases where employers lie to government investigators and instruct their fearful workers to do the same. That’s called obstruction of justice; it’s sadly not uncommon in low-wage industry investigations.

Finally, federal government enforcement agencies should develop relationships with local organizations that are connected with, and have the trust of, the workers in their communities.  Their assistance in blowing the whistle on predatory employers is critical. But efforts at cooperation with governmental entities are inevitably hobbled when the specter of possible deportation looms.

The bottom line: current deportation policies do U.S. workers no favors. Instead, they hamper the enforcement of worker protection laws and heighten the wage theft crisis for everyone. Unfortunately, the president has thus far demonstrated that he is more inclined to manufacture illusory emergencies than to recognize and address real ones.  Since the Trump administration refuses to change course, millions of workers in this country will continue suffer as they wait for new leaders in Washington to address their plight.

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Michael Felsen recently retired as regional solicitor of labor, following a 39-year career with the U.S. Department of Labor’s Office of the Solicitor in Boston. He currently consults on worker protection strategies with governmental and non-profit organizations.

M. Patricia Smith is a senior fellow with the National Employment Law Project. She previously served as U.S. solicitor of labor with the Obama administration, and as commissioner of labor for the State of New York. 

This op-ed was originally published in The American Prospect.