Tough times: wage theft and other crimes

I first learned the term “time theft” when I read Barbara Ehrenreich’s Nickel and Dimed: On (Not) Getting By in America, a first-hand account of low-wage work.  Her last job was working for Wal-Mart, and she was told that any time she spent speaking to a co-worker, or going to the bathroom, or just caching her breath was “time theft” from her employer.

Reading  Steven Greenhouse’s 2008 book, The Big Squeeze: Tough Times for the American Worker, I learned another term – “wage theft” –  which is about how employers coerce employees into working unpaid overtime or falsify their records so as not to pay for all hours worked.

I knew that undocumented workers – illegal immigrants – constituted an underclass outside the protection of U.S. law that could be exploited at will.  I knew that salaried “professionals” – programmers, college instructors, journalists, lawyers – often worked 60 hours or more a week, sometimes voluntarily but often not.  And I knew that companies found ways to redefine employees as managers or independent contractors to avoid having to obey labor laws.

The shocking thing about Greenhouse’s book is how many companies simply violate the law.  This is not just fly-by-night employers, but some of the best-known U.S. companies – Wal-Mart, Taco Bell, Family Dollar, Pep Boys, Toys “R” Us and others.  Sometimes they require employees to work after they’ve clocked out, or before they’ve clocked in.  Sometimes employees are given workloads that a normal human being can’t complete in the hours allotted, and have no choice but to work through their breaks and lunch hours. Sometimes managers simply alter the computer records.

The risk of getting caught, according to Greenhouse, is exceedingly small, because governments have cut back on enforcement of labor laws, and the penalty for getting caught is seldom enough to be a deterrent.  One of his main proposals for reform is simply the enforcement of existing law.

Not all companies do this, as Greenhouse noted.  McDonald’s, for one, has an excellent record of compliance with wage and hours laws.

I’m of an age (73) where I like to talk about how things aren’t like they used to be.  And how things today aren’t like what we expected.

We used to expect that computers would bring in an age of automation of abundance, where the main problem would be finding things for people to do now that machines did all the work.

There was a song – I don’t remember whether it was Pete Seeger’s or somebody else’s – that went something like this: –

I’ve been working on the railroad, all the livelong day.

All I do is push the buttons, and the trains go where I say.

I’m the only railroad worker, in the whole damn USA.

And the boss said, “You are featherbedding – collect your sev’rance pay.”

But as Steven Greenhouse documented in The Big Squeeze, the computer has not become the replacement of the worker so much as the worker has become the slave of the computer.  That’s only a figure of speech, of course.  Computers don’t do anything; people use computers to do things.

Computers allow managers “to track how many e-mails employees send each day, how many keystrokes they type each minute, how long it takes a worker to process an insurance claim, register a hotel guest, take a Burger King order — or handle a call from a Verizon Wireless customer.”

The American call center industry, which employs an estimated 4 million people in more than 60,000 locations, is notorious for using computers to micro-manage employees. Greenhouse described how TeleTech, which manages call centers for Verizon and other companies, requires customer service representatives to follow a script with many complex elements, type complex information into a computer, discreetly ask questions and suggest more profitable plans, without missing a beat, all within less than four minutes, and leave the customer completely satisfied – and to not take more than four seconds between calls.

With the help of computers, the lower-level managers can know exactly how close the employees can get to conforming to the script, and the higher-level managers can know exactly how closely the lower-level managers are keeping them in line.  Rather than being used as a tool of thought, the computer is being used as an enforcer of blind obedience.

Evidently the managers of the call center industry have not heard of the saying – “Time.  Price.  Quality.  Pick any two.”  They have lowered wages and they have pushed their employees to their physical limits, but they have not attained their goal, which is to satisfy customers.  Almost everybody I know has had a bad experience dealing with customer service representatives.

Greenhouse sees a link between computer monitoring and wage theft.  Taco Bell has a rule about the maximum number of employees in any of its stores for a given level of sales, and it installed a system so that it is possible to determine the ratio of staff to sales in any hour.  If the managers go over the limit, they can lose their bonuses and maybe their jobs.  The simple solution is to pretend the employees weren’t there and not pay them. In 2003, Taco Bell paid a $1.5 million settlement after a jury determined managers were guilty of requiring off-the-clock work and erasing employees work hours from the system.  But as a plaintiff’s lawyer noted, “managers” in the fast food industry may earn only $20,000 or $30,000 a year and put in untold extra hours themselves.

I don’t know how the work norms are set, but I bet that human factors specialists – experts on the physical capabilities and limitations of the human body – have little or nothing to do with it.  I bet the norms are set through “benchmarking” what others in the same industry are doing.  No company will want to pay its employees more than the median, any more than it would want to pay its CEO less than the median.  So there is a constant ratcheting down of pay and ratcheting up of work.

Under this process, there is no specific individual with moral responsibility for what goes on.  The executive who resets the pay and workload isn’t harming any specific individual; he or she is just changing numbers on a spreadsheet.  The manager who has to enforce the rules has no individual responsibility; he or she is just carrying out policies that others set.  There is just a mechanical process with no room to allow for individual circumstances.

This ratcheting process reminds me of an old story, about the man who decided to economize on the feeding of his donkey by giving him a pinch less oats each day.  The donkey got used to doing the same work on less feed, but, by the time the man got the donkey down to eating nothing at all, the creature for some reason died.

Click on The Big Squeeze for an interview with Steven Greenhouse.

Click on Steven Greenhouse for recent and archived New York Times articles.

Click on Jobless Produce U.S. Profit on Productivity With Less Inflation for a Bloomberg Business News report on the supposed benefit to business of high unemployment and falling wages.

Click on Wage Theft Online Resource Center for links to more information on wage theft. [Added 9/28/10]

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2 Responses to “Tough times: wage theft and other crimes”

  1. How Washington made the rich richer « Phil Ebersole's Blog Says:

    […] Tough times: wage theft and other crimes […]


  2. Capitalism, socialism and democracy « Phil Ebersole's Blog Says:

    […] in the United States in the past 30 or so year.  Steven Greenhouse’s The Big Squeeze: Tough Times for the American Worker and Jacob Hacker’s and Paul Pierson’s Winner-Take-All Politics: […]


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