Big win for labor in Chicago
City council passes "wage theft" law that threatens
license of violating companies. Will other cities follow?
By Josh Eidelson
By a unanimous vote on Thursday, Chicago's City Council
passed one of the strongest "wage theft" laws in the
United States. The move was hailed by labor activists,
who've long complained that wage theft -- not paying
workers what they're legally owed -- is one of the
easiest crimes to get away with.
"Now the bosses are going to know that the workers have
rights, too," said Maria Garcia, a member of the labor
group Arise Chicago, which spearheaded the campaign to
pass the law. Interviewed in Spanish, Garcia said she'd
experienced wage theft at both of the past two
restaurants where she'd worked.
"Wage theft" encompasses a range of offenses. Garcia
said that in her case, it had included unpaid overtime
and hourly rates below the minimum wage. The term was
popularized by labor activists seeking to stir moral
outrage at the all-too common issue: "Wage theft"
suggests that refusing to pay wages that workers have
earned is a form of robbery, rather than a mere
accounting dispute. Recent years have seen increasing
traction for campaigns to strengthen wage theft
penalties and remedies. Those efforts have also
inspired a counter-attack: Last year, Florida
Republicans and big businesses pushed a bill that would
have overridden local wage theft measures. "We believe
the existing court system is the best place for these
claims," a spokesperson for the Florida Retail
Federation told the Huffington Post.
There's serious money at stake. In 2008, the National
Employment Law Project and a group of advocates and
academics talked to around 4,000 low-wage workers in
Chicago, New York City and Los Angeles. Two-thirds (68
percent) of the workers reported experiencing some form
of wage theft in the past week. Researchers calculated
that out of an already-low average $339 in weekly
income, low-wage workers each lose an average of $51
weekly in wages they earned but never received. That
adds up to over $56 million per week among workers in
the country's three largest cities.
Under Chicago's new law, companies convicted of wage
theft could have their business licenses revoked.
Chicago Mayor Rahm Emanuel, no close pal of labor,
signed on as a sponsor and has pledged to sign it (some
of the same groups that have been collaborating with
the mayor's office on the wage theft bill have
meanwhile been organizing furiously against the city's
decision to bring in a different janitorial contractor
at O'Hare airport, which could eliminate 300 union
The major showdown over the new law occurred in
committee hearings prior to Thursday's vote. Adam
Kader, the Workers Center Director for Arise Chicago,
said supporters mobilized a "major show of force" from
workers and community activists. Kader said opponents
brought "a significant show of force by all of the
major industry lobbyists in the state of Illinois." But
after agreeing to a change in the bill's language,
specifying that businesses could have their licenses
revoked only after willful or egregious violations,
labor was able to win over the council's holdouts --
though not the business lobbyists. (According to the
Chicago Tribune, Alderwoman Emma Mitts, who chairs the
relevant committee, last week said she was hearing from
business leaders concerned that they would be unfairly
punished for honest mistakes in how they calculated
their workers' pay.)
"In low-wage industries," said Kader, "it's standard
practice to be practicing wage theft." Now, he said,
"there's another force that they have to reckon with,
which is the threat of losing their license." Advocates
say Chicago is now the second, and the largest, U.S.
city with such a law on the books. San Francisco was
Of course, on paper, refusing to pay workers the wages
you owe them is illegal everywhere. So why does the
problem persist? Part of the answer is anemic
enforcement. A 2012 report from the Progressive States
Network noted that the ratio of federal Department of
Labor enforcement agents to U.S. workers has fallen
from one for every 11,000 in 1941, to one for every
141,000 today. When state labor agents are factored in,
the authors found "less than 15 percent of the total
enforcement coverage workers enjoyed decades ago."
Since the New Deal-era passage of the New Deal's Fair
Labor Standards Act, they wrote, "enforcement capacity
has diminished to the point where there are essentially
no cops on the beat."
The same PSN report graded states on how well their
laws punish wage theft, protect worker whistleblowers,
and promote accountability and transparency on the
issue. New York scored highest, with a C+.
Massachusetts earned a solid C, Illinois and three
other states received Ds, and the rest of the country
scored "F+" or worse. And even when companies get
caught breaking the law, it often doesn't cost them the
chance to get hired by the government, let alone put
them in danger of getting shut down. The Government
Accountability Office found that the federal government
awarded over $6 billion in fiscal year 2009 contracts
to companies that had been cited for violating federal
But even more than poor enforcement, wage theft is a
symptom of power asymmetry at work. The same 2008 study
that found that low-wage workers lose 15 percent of
their income to wage theft also found that when they
spoke up about the issue, or tried to organize their
co-workers, 43 percent were illegally punished for it,
either with a threatened pay cut or a call to
immigration. While tougher laws offer stronger weapons
against abusive employers, workers who are organized
are far better positioned to wield them.
"It's easier to get the political win than to enforce
the law," said Kate Bronfenbrenner, the director of
labor education and research at Cornell University.
Groups like Arise Chicago are out to make such
enforcement possible for low-wage, non-union workers.
In fact, the rise in activism around wage theft is in
part a consequence of the dramatic proliferation of
non-union labor groups around the country. While union
membership is declining (by one estimate, down to 6.6
percent of the private sector), the number of "workers'
centers" and other alternative labor groups has
exploded in past 20 years. Like Arise, such groups
sometimes partner with unions to try to win collective
bargaining rights where possible. But they also use the
law, media and organizing in an effort to build
leverage and improve conditions for workers who haven't
been able to win union recognition.
How much of a difference Chicago's new law makes, said
Bronfenbrenner, will depend on how well organized
workers are to enforce it. Kader agrees. "This
ordinance is a victory only insofar as it expands our
ability to organize," he said. "On its own it's really
not going to do much." But where workers are willing to
take collective action, said Kader, the new law offers
an additional tool "to punish bad businesses," and send
a strong message to scofflaw employers: "No longer can
they simply ride out a Department of Labor complaint
which is not going anywhere."
Kader said the rise of wage theft campaigns "could be a
sign of strength in the workers' center movement," but
"it could also be a sign of weakness in the broader
labor movement." With unionization out of reach for
many workers, he said, "we've had to look at, what are
ways beyond a union contract, what are other ways to
lift up standards?"
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