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Minimum help for the neediest wage earners

By Robyn E. Blumner, Times Columnist
In print: Sunday, July 20, 2008

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ADVERTISEMENT Related Links View GAO report on the way workers' complaints have been mishandled View second GAO report on workers' complaints

Once again the taxpayer comes to the rescue of investors.

Last week, Treasury Secretary Henry Paulson quickly fashioned a plan to keep mortgage giants Fannie Mae and Freddie Mac liquid and solvent by using billions in taxpayer loans and guarantees.

It was similar to treatment given the major Wall Street investment banks when they teetered due to their irresponsible bets on subprime mortgages. The Fed jumped to open its discount window allowing them to borrow money using their toxic securities as collateral.

Investment interests falter and our government is nimble and responsive.

But when the lowest paid workers in our nation are cheated out of their modest wages, the lifeboat, it seems, is full.

A scathing review of the way workers' complaints have been mishandled and ignored by the Wage and Hour Division of the Labor Department has just been issued by the Government Accountability Office — Congress' investigative arm. The two reports released Tuesday highlight the way the division has failed to follow through on valid complaints, particularly for low-wage workers, leaving some cheated out of thousands of dollars in earned wages.

More than 130-million workers in America rely on the Wage and Hour Division to enforce laws that mandate overtime pay and minimum wages. But they shouldn't count on it.

Over the last 10 years, the number of enforcement actions has been reduced by more than a third, which GAO partly attributes to a declining number of investigators on the job.

Just to give you a sense of how uninterested government has become to the plight of underpaid workers, Kim Bobo, executive director of Interfaith Worker Justice, unearthed these statistics: In 1941 the division conducted 48,000 on-site investigations of businesses in industries known to slight worker pay. Fifteen hundred investigators visited one in every 10 businesses annually, helping to keep things honest. Today, the division has just 732 enforcement staffers who conduct fewer than 30,000 investigations per year. They are able to contact about one-third of 1 percent of businesses, mostly by phone.

"There is a crisis in the quantity of wages being stolen and an inability of the department to respond," Bobo says.

At her group's 19 worker centers around the country, 90 percent of the employees who come in seeking help have suffered wage theft. "They were either not paid for all their hours worked, not paid for valid overtime or, in the case of day laborers, not paid at all," Bobo says.

The GAO reports document some of these cases.

In one, rather than assist a homeless employee owed thousands of dollars in back wages for work at an assisted living facility, she was told to find a private attorney to file suit. The agency dropped the complaint because the employer said in August 2006 that it was unable to pay the wages owed. Yet the GAO found that the facility was still operating as of June 2008.

In another case, a delivery driver for an alcohol distributor with $25-million in annual net sales was not paid overtime. It took 17 months for the agency to assign an investigator to the complaint that was dropped six months later for possibly having passed the two-year statute of limitations.

When the division does follow through on complaints, Bobo says, it will often obtain only a portion of what's owed the employee as a "settlement." That means an employer who gets caught stealing wages suffers no downsides.

The low-wage folks who work in construction, home health care, hotels and restaurants, and such, can't feasibly hire a lawyer to get back the few hundred or thousand dollars owed them. The government has to do it.

And there's the glitch. There always seems to be plenty of money and will to rescue financial giants whose investments (gambles) turn sour, but when the working stiffs of America need help to get paid, our government doesn't have enough resources to help. Something's amiss here, deeply amiss.