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A new report from the Progressive States Network shows that there are few states that are even attempting to seriously deal with the problem of wage theft from workers and most states do a terrible job of dealing with the rampant problem. 44 of 50 states and the District of Columbia did not receive passing grades on their policies for dealing with wage theft. Only two states -- New York and Massachusetts -- even got a grade as high as a "C." Nine states were so bad they earned an "F-."
These debates have played out most visibly in fights over legislative proposals targeting the rights of government workers and unions. A central theme in conservatives’ cases is an assumption that trends in the private sector mirror free market economic “reality,” a world where institutions that empower workers simply and unsustainably distort costs: if private sector wages are falling, that’s just what the market will bear; if workers don’t have pensions, it’s because they’re too expensive and no longer relevant. Many conservatives argue, as Wisconsin Governor Scott Walker articulated, that the public sector is “out of balance” and needs to be “brought back in line” with the private sector, where pensions, healthcare coverage, and union representation have been on the decline for decades.
By surveying the effectiveness of laws meant to protect workers against violations by unscrupulous employers in all 50 states, this report reveals a very different picture of the actual “imbalance” between private sector and public sector employment standards. Since the private sector workforce is virtually non-union and concentrated in lower-wage sectors, the conditions such working people face are increasingly the foundation on which the American standard of living rests. Laws to guarantee an employee’s right to be paid what she or he is legally owed form a bulwark against the type of mass exploitation we are mortified by in other countries, and which are only a couple of generations distant in our own nation’s history.
Our research shows that states’ wage theft laws are grossly inadequate, contributing to a rising trend in workplace violations that affects millions of people throughout the country. The growth of this and other forms of the “underground economy” also have a serious impact on state revenues, amounting to billions of dollars per year in tax and payroll fraud.
Several states are acting to address these problems by strengthening their laws against unscrupulous employers. Our recent report, Cracking Down on Wage Theft, highlights some of these states, most particularly New York, which passed a law in 2010 that greatly enhanced the ability of workers to recover nearly $3 billion per year stolen wages and for the state to recoup hundreds of millions in lost revenue — simply by enforcing the law. However, the improvements that states like Massachusetts, Illinois, and New Mexico have recently made come against a backdrop of virtual lawlessness. Our comprehensive survey of state laws across three categories essential to addressing the problem — Accessing Justice, Transparency and Accountability, and Securing Justice — reveals that 44 of the 50 states (plus Washington, DC) do not receive passing grades on combating the wage theft epidemic. Even the highest-ranked states — New York and Massachusetts — receive barely passing grades and have just begun to develop truly effective policies for cracking down on wage theft, while the vast majority of states have few, if any, protections at all.