Jaritza Geigel, a young woman from Bushwick, Brooklyn, has been spending a lot of time in Zucotti Park this fall. She, like so many others, has been inspired by the Occupy Wall Street movement’s call to action about growing income inequality. She shares the frustration of the working New Yorkers and small business owners who are among the “99%” and who are struggling to pay their bills.
Working Americans and small businesses are paying the price for our country’s economic collapse, while many of the root causes of that collapse, like the rollback of common sense government regulation to make room for “the 1%” to reap unprecedented profits, go unaddressed.
Earlier this month, the 1% struck back with an unconscionable effort to roll back the Wage Theft Prevention Act of 2010, which implemented – for the first time in New York history – meaningful penalties to stop employers from stealing already-earned wages out of working peoples’ paychecks.
At an Oct. 25 meeting of the New York City Regional Economic Development Council, a proposal was made to exempt small businesses from the Wage Theft Prevention Act (WTPA). The WTPA, which took effect in April, 2011, increases penalties for violating – and improves enforcement of – pre-existing wage and hour laws, and adds teeth to the laws that guarantee workers the most basic rights.
What basic rights? The right to actually be paid for the work you do. The right to minimum wage, overtime pay after 40 hours a week and the right to speak up when those rights are violated, without facing threats, illegal firing, and other retaliation as a result.
The Regional Economic Development Council is charged with developing a plan for economic development to help guide the use of taxpayer subsidies and cultivate job growth. The proposal at its Oct. 25 meeting was in effect that our state’s approach to economic development should be to subsidize – through non-enforcement of the most basic right to be paid – businesses that get a leg up on the competition by stealing from their workers.
Make the Road New York led the coalition effort to pass the WTPA, and we did so because in New York City alone unscrupulous employers steal $1 billion every single year from their workers in the form of wage theft. New York enacted the Wage Theft Prevention Act because due to wage theft, a full 15% of the average low-wage worker’s paycheck never makes it home to the working families and the neighborhoods that have been hardest hit by the economic collapse. And New York enacted the Wage Theft Prevention Act because small businesses were clamoring for the help that it provides. Yes, a major purpose of the WTPA was to create a level playing field for responsible business owners; to give them, for the first time in New York State history, the ability to compete without being undercut by competitors who gain an unfair advantage by stealing workers’ wages.
Until the passage of the WTPA, New York State was far behind dozens of other states in protecting responsible businesses and workers from the scourge of wage theft. Even Arizona had wage theft penalties that were far tougher than what New York had in place. Before the WTPA, a law-breaking employer who was finally caught for wage theft was – at maximum – required to reimburse workers for six years of stolen wages (even if the wage theft had been going on for 10 or 20 years), plus a mere 25% in liquidated damages to compensate the workers and penalize the wage theft. And the protections for workers who came forward to blow the whistle on wage theft were so full of holes that an entire workforce could easily be terrified into silence with a single threat to fire workers or call immigration authorities, often making enforcement impossible altogether.
This situation — the state of New York law before the WTPA — created a perverse incentive in favor of wage theft as a business practice: the chance of being caught for wage theft was so low, especially given worker fear of retaliation; and the penalties so minimal, that it made better business sense to steal workers’ wages and build the small risk of getting caught into the cost of doing business. This dynamic amounted to a subsidy paid to businesses stealing from their workers. Since businesses engaged in wage theft are also highly likely to be stealing from the Workers’ Compensation and Unemployment systems, the state of New York law before the Wage Theft Prevention Act was that we were subsidizing theft from our workers and theft from our tax base.
You don’t have to be an Occupy Wall Street protester to be disgusted at advocacy for wage thieves, or to believe that subsidizing theft from our working families and our tax base is not the right kind of economic development policy for New York State.
Deborah Axt is deputy director of Make the Road New York, a non-profit community based organization in Bushwick, Brooklyn that promotes economic justice, equity and opportunity for all New Yorkers.
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