Why is Wage Theft A Problem?

Metro Denver consistently ranks as one of the fastest-growing cities in the country with no expectations that the population boom will cease in the near future.

Denver owes this growth to its good job prospects, mild climate and an incredible ability to attract young, college-educated workers. The city’s population increase has led to a construction boom that has overwhelmed Denver’s post-recession construction labor force. The 2008 crash led to large reductions in the workforce, and the industry has been unable attract enough workers to meet demand. As a result, many smaller operations depend on day laborers and other forms of immigrant labor, despite increased efforts on the part of the Colorado legislature to limit their use.

Kim Bobo‘s study coined the term “wage theft” to refer to a national epidemic where workers across industries are losing billions of dollars every year in the form of stolen wages, unpaid overtime or misclassification of labor (2008: 7-8)The Colorado Fiscal Institute (CFI)estimated that wage theft affects half a million Coloradans and that workers are losing at least $750 million a year (Stiffler CFI 2014: 1). However, the CFI bases their estimates on data extrapolated from state workforce numbers and the rate of wage non-payment from the NELP2009 Broken Laws study conducted in New York, Los Angeles and Chicago (Stiffler CFI 2014: 3-4; Bernhardt et al. 2009).

Based on findings from one year of qualitative research and outreach, Rebecca Galemba’s research team is in the process of surveying 400 day laborers in Denver and Aurora about their experiences with wage theft and strategies for seeking redress. This survey is providing necessary data about a segment of the low-wage workforce in Colorado that is particularly vulnerable to wage theft. Beyond documenting the problem, the analysis will inform policymakers on bridging the gap between the availability of legal resources and hesitancy of marginalized populations to utilize them.

The prevalence of wage theft among low-wage immigrant day laborers is well-documented. Valenzuela et. al.’s (2006: 14) extensive study documented that in the two months prior to their survey, 48 percent of day laborers were underpaid for work completed and 49 percent had at least one instance of nonpayment. According to NELP’s Broken Laws study, foreign-born Latinos experience the highest minimum wage violations; twice the rate of U.S.-born Latinos and almost six times that of U.S.-born whites (Bernhardt et al. 2009: 43).

In New Orleans, Elizabeth Fussell (2011: 611) argues that wage theft is facilitated by the deportation-threat dynamic, meaning that employers exploit workers under the assumption that day laborers are undocumented, whether or not they possess legal authorization. She argues that the deportation-threat dynamic will only be undermined when workers’ immigration status “cannot be assumed,” and when “potential perpetrators. . . cannot expect to get away with victimizing unauthorized Latinos.”

Galemba and her team’s research examines possible mitigating factors: do more robust labor laws and advocacy generate a climate where employers cannot get away with wage theft? Specifically, the implementation of an amendment to the Colorado Wage Protection Act, which went into effect on January 1, 2015, opened an administrative process for pursuing small wage claims through the Colorado Department of Labor Employment. This process opens new pathways for low-wage workers to recoup wages.

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