Wage theft, Bush-style

In an unlikely team-up, impartial investigators from the Government Accountability Office joined a low-income workers’ advocate at congressional hearings July 15 to tell lawmakers that President Bush’s Labor Department has failed to enforce minimum wage and overtime laws and that low-wage workers are routinely being robbed of their earnings.

Enforcement of laws that require employers to pay at least the minimum wage and overtime rates has sunk to record lows under the Bush administration, they said.

Investigators for the GAO described for members of the House Education and Labor Committee how the Labor Department’s Wage and Hours Division routinely fails to count complaints, refers workers with legitimate complaints to private lawyers and closes half its cases with perfunctory calls simply requesting employers to settle the matters. Workers lose most of the cases, they said.

Kim Bobo, executive director of the Interfaith Worker Justice program in Chicago, joined GAO investigators at the hearing. Her group operates counseling centers and sponsors activities, including assistance with union organizing, for low-income workers around the country. “The wage and hour division is so understaffed,” she said, “that it is actually now doing fewer investigations of wage and hour complaints than it did in 1941, the year it was founded. Wages are simply being stolen.”

Only one witness at the hearing disagreed with the evidence presented by the GAO. At one point, Alexander Passantino, acting director of the Wage and Hour Division, interrupted a GAO investigator and yelled, “Wrong, wrong, wrong, wrong.”

When pressed by lawmakers, however, he admitted, “The agency doesn’t handle all the complaints it gets,” and said, “I have repeatedly asked for more money to hire more inspectors but have been turned down.” He ducked out of the room before lawmakers or reporters could ask him about the resources he had requested or who, in the administration, had turned him down.

The Wage and Hour Division is responsible for enforcement of the 70-year-old Fair Labor Standards Act, under which it came into existence. The law established both the minimum wage and the right to overtime pay after 40 hours of work in a week. Anne Marie Lasowski, a GAO investigator, said, “It’s not working for low-wage workers. They are becoming victims because the law is not being enforced.”

Greg Kutz, another GAO investigator, said, “There’s another way that workers are cheated. The agency is so understaffed with attorneys who can follow up on cases that many times the employer wins and the worker gets nothing because the statute of limitations runs out even before the Labor Department can file a complaint.” Kutz said that in one case involving 24 workers at a garment factory in Santa Fe Springs, Calif., workers lost $60,000 in wages when their case was dropped because of lack of available attorneys.

Lasowski told lawmakers that there has been a sharp decline in enforcement action under the Bush administration. She said the number of wage and hour inspectors has been slashed during that period from 942 to 732.

A GAO report issued before the hearings showed that while the Wage and Hour Division handled 47,000 cases in 1997, it handled only 30,000 last year.

The report also criticized the Labor Department for failing to use data it already has to target employers who are repeat offenders. The department already knows, the GAO said, who the repeat offenders are because of information presented to it by labor unions and groups like Interfaith Worker Justice.

Data already available to the department shows that the most blatant abuse of wage and overtime laws occurs in the poultry processing, garment, agriculture, hotel, restaurant and health care industries. The Wage and Hour Division would uncover and solve more violations if it would focus in these problem areas, Bobo said.

“Those are the industries that have the highest percentages of low-wage workers and they hurt the most when their employers cheat,” Bobo declared. “And they also have high proportions of immigrant workers who can’t afford the high-priced lawyers that the Labor Department refers them to.”

Although the Fair Labor Standards Act covers all workers in the U.S., regardless of immigration status, undocumented workers are the least likely to complain, she noted. “It is time to punish those who steal workers’ wages in meaningful ways — with hefty fines and jail terms.”

Rep. Phil Hare (D-Ill.), a member of the congressional committee, was a union shop steward in a Rockford, Ill., textile plant before he was elected to Congress. When asked if, in that role, he had gotten complaints about wage and hour violations, he said, “A lot of complaints, every single month.”

jwojcik @pww.org