Crossposted from our Main Street blog.
Living on the minimum wage is difficult, to put it mildly. According to the Economic Policy Institute’s Heidi Shierholz,
At its peak in 1968, a full-time worker earning the minimum wage made $18,890 in May 2009 dollars, enough to keep a family of three over the poverty line. With a minimum wage of $7.25, a full-time worker earning the minimum wage will make $14,962, about a $4,000 pay cut from the 1968 level and well below the poverty threshold.
The inability of today’s minimum wage to alleviate poverty is even more striking when one considers that poverty researchers regard the poverty threshold as currently calculated to be vastly outdated and an inadequate measure of the income needed to make ends meet. Poverty experts often use twice the poverty line as a more accurate threshold for material deprivation. Another measure, developed by the Economic Policy Institute, is the “basic family budget,” or the amounts a family needs to feed, shelter, and clothe itself, get to work and school, and subsist in 21st century America. It is a paycheck-to-paycheck no-frills budget that includes no savings for retirement or college, no restaurant meals, and no funds for emergencies. A typical basic family budget for a family with one parent and two children is $40,273, about three times the income of a full-time minimum-wage worker.
So imagine you’re a minimum-wage worker…and you’re not even getting the minimum wage. A new study by Ruth Milkman, Ana Luz Gonzalez, and Victor Narro of the UCLA Institute on Labor and Employment found that in Los Angeles, almost 30% of low-wage workers had been paid less than the minimum wage in the preceding week. And we’re not talking pennies here:
The minimum wage violations were not trivial in magnitude: 63.3 percent of workers were underpaid by more than $1.00 per hour.
Think about that: You’re working. You’re there when they need you, doing what needs to be done. The wage you’re supposed to be getting would still leave you under the poverty line if your job is full time. And you’re being stiffed for a dollar an hour.
That’s not all. More than a fifth of the workers surveyed had worked more than 40 hours in the week for a single employer, and should have been getting overtime. Nearly 80% of those had not been paid the legally required overtime rate. That’s if they were paid at all – 17.6% had worked outside their scheduled shifts, and 71.2% of them hadn’t gotten paid for that time.
Again, this makes a difference to people’s ability to survive:
The various forms of nonpayment and underpayment of wages take a heavy monetary toll on workers and their families. L.A. respondents who experienced a pay-based violation in the previous work week lost an average of $39.81 out of average weekly earnings of $318.00, or 12.5 percent. Assuming a full-year work schedule, these workers lost an average of $2,070.00 annually due to workplace violations, out of total annual earnings of $16,536.00.
Think about what you can do with $2000. Now think what $2000 means if it’s 12% of your income. Or think how you’d feel if your boss was screwing you out of 12% of the income you were legally entitled to. I don’t know about you, but I’d be pissed.
Partial good news here is that we have a Secretary of Labor who actually cares about this, and wants to stop it.
Soon after she became the nation’s labor secretary, Hilda Solis warned corporate America there was “a new sheriff in town.” Less than a year into her tenure, that figurative badge of authority is unmistakable.
Her aggressive moves to boost enforcement and crack down on businesses that violate workplace safety rules have sent employers scrambling to make sure they are following the rules.
Garnering less attention, she just finished hiring 250 new investigators to protect workers from being cheated out of wage and overtime pay. She also started a new program that scrutinizes business records to make sure worker injury and illness reports are accurate. And she is proposing new standards to protect workers from industrial dust explosions – an effort the Bush administration had long resisted.
But given the scale of the violations the UCLA study found in LA alone, even 250 investigators is probably only a drop in the bucket of what’s needed.