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Wage Watch: Study finds ‘alarming’ wage violations by employers in two states

December 5, 2014, 8:28 PM UTC
An employee prepares a hamburger at a US
Photograph by Remy Gabalda — AFP/Getty Images

Wage theft is rampant in California and New York

The Department of Labor wanted to find out just how many workers in California and New York were earning at least the mandatory minimum wage. The results of the study the department released this week are staggering.

After examining workforce data of both states from October 2010 through September 2011, the DOL discovered that 3.5% of wage and salary workers in California and 6.5% of such employees in New York are paid less than the minimum wage. Those figures increase to 10.9% and 19.5%, respectively, when only workers in low-wage jobs are considered.

Wage violations in each state affect at least 300,000 workers and result in between $20 million and $29 million in lost earnings per week. Applying even half the violation rate nationwide means that more than 2 million workers are not earning the wages mandated by state and federal laws.

Violations of minimum wage laws are most common in the restaurant and hotel industries, according to the study, and young workers are more likely to be the victims of wage infractions than older employees.

David Weil, administrator of the Labor Department’s Wage and Hour Division, told The New York Times that the study’s finding are “alarming in terms of the prevalence of the problem, particularly in a set of industries where we already know workers earn low wages and struggle to earn a basic family budget.”

Chicago is the latest city to hike its minimum wage

A week that started with a potential showdown between Chicago and Illinois over the city’s right to increase its minimum wage ended with the nation’s third most populous city giving workers a raise and the state delaying its own wage hike until next year.

The Chicago City Council on Tuesday passed an ordinance that will raise the city’s minimum wage from $8.25 per hour to $13 by 2019. The hastily arranged vote at first appeared to be an effort to preempt a state plan to increase the Illinois minimum wage and block Chicago from boosting its own rate. But the state house speaker on Tuesday put off action on a proposal until at least January.

With the state’s plan off the table, Chicago Mayor Rahm Emanuel pushed the city hike forward. The mayor, who’s been criticized for catering to the city’s most affluent population, is up for reelection in February.

The next right-to-work state: Wisconsin

The Wisconsin State Senate is primed to pass a right-to-work bill that will allow workers to choose whether to join unions and pay dues, according to statements by the Republican majority leader on Thursday. If the bill becomes law, Wisconsin would become the 25th right-to-work state in the U.S., joining neighboring Michigan, and Iowa, which have already enacted such legislation.

Opponents of right-to-work laws consider think of such measures as union killers since they create a so-called free rider problem, allowing workers access to union representation and collective bargaining without having to pay for it. Advocates of the initiatives, meanwhile, argue that joining a union shouldn’t be a condition of employment and right-to-work laws encourage business and job growth.

A Wisconsin Republican state representative has said he soon will introduce a right-to-work bill, and a longtime conservative activist created a group called Wisconsin Right to Work this week in an effort to push the issue forward.

Wisconsin was at the center of a massive labor fight in 2011, when Governor Scott Walker cut collective bargaining rights for public-sector employees. The move prompted weeks of protests at the state capitol in Madison. Walker has said that a right-to-work initiative is not a priority for him.