Without reading the article (as is Unfogged tradition), I'd bet that a combination of things would help reduce wage theft by a bunch. First, for our timeliness hook, Biden has recently (as in yesterday or today, depending on things like time zones and memory and whatnot) tweeted that he would support ending the tipped-minumum wage. That dries up a lot of free-floating cash that wicked managers and others skim to steal wages. Second, make legal responsibility climb like kudzu up the franchising tree. If Micky D's can force franchisees to toe the line on design and menu and all the other things in those big binders, then they can also force them not to steal wages, and be held legally liable if thievery is going on. Third, because every list needs at least three, have lots more inspectors to stamp out this sort of thing. Fourth, because many many reasons, unions.
OP.last: I read 1 "wicked managers" sounding like managers that look like a candle and I can't convince myself that wicked-evil and wicked-candle are actually spelled the same.
"corporations are naturalized persons"
Corporations don't do anything on their own because they're not actually people and you can punish the real people who take illegal actions while trying to hide behind the legal arrangement of incorporation. (I too have not read the article so maybe this is addressed.)
If anything it should be easier to police and punish wage theft because there's a nice paper trail of who was responsible, unlike property theft where the perp hides their identity. I think the reason the latter is punished more stringently is because it's more often associated with the threat of violence.
That was me, my wicked browser didn't work.
could not figure out how to translate "holot"
To get a holot you start with alot and metricise.
I don't think it's about legal personhood, but about class/power. A sole-proprietor employer gets enforcement just as lax as an incorporated one does.
Also:
The two situations aren't as similar as is implied by the common use of "theft".
Isn't wage theft arguably worse, because it's done by someone in a position of power over the victim? Like the distinction between robbery and simple theft, just using social force rather than physical force?
Yes, that's how I think of it. Obviously, there are some cases where the employer is poor and gets stiffed by someone and really can't pay those they employ.
7: In that case, the business should declare bankruptcy, like any other time they can't pay their creditors.
That's true but still doesn't get anybody paid.
It gets them paid a bit, because they'll get some of the money they're owed through the bankruptcy process. Or perhaps the employer and the employees could come to some sort of restructuring agreement to avoid bankruptcy, in which the creditors end up owning shares in the business in lieu of the cash they're owed.
I was thinking more of like a painter who hired a laborer for a job and then didn't get paid. There's no shares and probably the painter can't pay.
They're still creditors in a personal bankruptcy/IVA situation
Assuming that the painter's unable to raise the cash through, eg, a small business loan from a bank: the painter either operates as a registered business, or he doesn't. If he does, the business will have assets (cash, equipment, ladders, a van etc) which can be seized and given to the labourer. If he doesn't, then the debt to the labourer is a personal debt, and the painter's personal possessions can be seized similarly, subject to the limitations of personal or corporate bankruptcy law in the appropriate jurisdiction.
None of these are ideal, of course. The ideal is for the painter to say "look, I haven't been paid for that last job; instead of paying you $500 today, can I pay you in a month?" And the labourer will agree, or say "yeah, but in that case I want $550" or "can you give me $200 now and the rest later?" or whatever. This is basically what happens with non-employee creditors when there's a cash flow problem at the debtor company all the time.
But there needs to be the credible threat of legal enforcement for that to happen. Otherwise the painter will simply follow Moby's advice and say "look, I haven't been paid for that last job so I'm not going to pay you. Eat grass, loser."
How much of a can does it take to pay for the bankruptcy process itself?
It's spelled helots. Will no one think of Thucydides?
It's not my advice. I'm just pointing out that the poor have employees too and I know this because if what happens when I try to paint my house. The guy who can keep insurance pays the other guys, because I won't hire the guy without insurance because I don't want to try to save a few hundred dollars and wind up getting sued.
Small pays first, big pays last. Walmart screws its suppliers on payment terms, its suppliers screw theirs and their employees, etc. We need a better system but I'm not sure what it would look like, besides breaking up monopolies of course.
instead of paying you $500 today, can I pay you in a month?" And the labourer will agree, or say "yeah, but in that case I want $550"
Also don't hire loan sharks who charge >100% interest rates as laborers.
(Although that's not unreasonable if the guy who got stiffed has to turn around and use a payday lender to cover his rent.)
Companies that engage in wage theft should have their assets seized by civil forfeiture; similar personal liability for managers and executives. No prison, just take all their stuff. Then turn those assets into worker cooperatives.
Just in general putting white collar criminal investigations back to the level of priority they had a couple of decades ago, including IRS investigations, would solve a lot of problems. I doubt the wage-theft people are also really good about paying their taxes.
Somebody needs to write a "broken windows" theory of white collar crime, where the windows are replaced with tax evasion.
I think it just doesn't seem like the same thing, even though wage theft causes harm. The painter who can't pay his subcontractor because he hasn't been paid by the client doesn't seem like he committing the same wrong as he would if he were taking money out of the subcontractor's wallet. At least, if he pays up in a reasonable amount of time, the subcontractor seems like he's been made whole, which doesn't seem plausible ("I stole $500 from you but put it back"?)
It would be nice if the penalty for financial crimes was high enough that the expected value before getting caught of committing that crime was deeply negative.
But higher penalties paired with lower odds of getting caught have poor deterrence rates. I read that somewhere.
Somebody needs to write a "broken windows" theory of white collar crime, where the windows are replaced with tax evasion.
This is brilliant. Are we allowed to profile based on the profile and color of the collar?
27: I wish you had a better reference. I'm not saying we should lower enforcement, but at a minimum penalties are too low now, sometimes giving positive expectations after having been caught if the proceeds can be stored in a Swiss bank or wherever, or if the penalty is too lax. If you want zero expected value the penalty needs to be at least the proceeds over the probability of getting caught; to be safe, let's double that.
This does mean that the unlucky/stupid/ratted-out financial criminals subsidize the lucky/smart/careful ones, but that's how it's always going to be. Higher penalties also increase the cost of committing the crime--you have to be more careful and that's not free--and that decreases the expected returns, thus making some crimes infeasible, much like high taxes mean some otherwise plausible economic activity never gets started. And yes, enforcement needs to increase, but I assume we're already assuming a magical world where the powers-that-be actually care about funding that.
28: Particularly high-level white collar crime should be called contrast collar crime.
I think I saw it in reference to the death penalty for murder (i.e. it's better to focus on arresting more murderers than executing the ones you do arrest).
Gotcha. I'd assume that the people who commit financial crimes are better at estimating their profit than people who do the sort of thing that gets you executed, since even well-adjusted people are bad at valuing their own lives.
Anyway, the people who investigate crimes and the people who prosecute the offenders are two separate but equally important groups. You can do both, but one is probably far cheaper than the other.
Then again, I just read that some researchers studying something asked a bunch of companies what hurdle rates they use for M&A, and broadly got back answers like "What's a hurdle rate? We just buy what the CEO thinks looks good" so I may be overestimating the numeracy in the relevant class of people.
I don't know what a hurdle rate is either.
The late Mark Kleiman argued that small but certain punishments led to less crime but I don't know if that applied to white collar crime.
I was thinking about this in conjunction with a friend's thread in the other place, and I think none of this analysis addresses a fundamental irrationality we have about experiencing different crimes and how they impact our well-being depending on something more than their dollar amount.
First I was thinking of my and my social network's intersection with traditional crime---mostly burglaries and muggings/robberies, none of which added up to more than $5000 in value individually. My one friend who was murdered by a stranger was probably caught up in a robbing gone wrong, over a few hundred dollars max in a wallet. When my childhood temple was bombed, there were no injuries and the property damage ended up being effectively negligible thanks to insurance. I have no doubt if we took a large enough cross section of my social circle, collectively we have lost more money to wage theft and white collar crime than to these traditional crimes, and that the probability of any of us having been physically harmed or having lost a dear one to murder is fairly low. But maybe because of the suddenness and unpredictability, maybe because of cultural brainwashing and conditioning, maybe because of the outsize weight of death and injury, even considered with low probability, I find it very hard to believe that we weren't at least as psychologically impacted by the "traditional crime," if not more so. I really suspect that somehow getting stiffed on your paycheck doesn't have the same impact as realizing you had your wallet stolen for the same amount---one makes you feel like you need to look for a different employer, the other makes you afraid to walk around. It may be economically irrational but I suspect it's a emotionally very real. Enough Americans do have enough intersection with both traditional crime and wage theft, and the differential in the ways these two categories make them feel, that rhetoric along these lines is going to be counterproductively perceived as gaslighting before it's going to be broadly persuasive.
I'd argue we've already been gaslighted in the other direction- how many suburban residents are convinced that Antifa is going to burn down their house because they saw a few broken store windows on TV? Surveys repeatedly show that people think "traditional crime" has continued to go up since the 90s despite the historic drop. I wonder what a survey on white collar crime would show vs. what is the reality.
The late Mark Kleiman argued that small but certain punishments led to less crime but I don't know if that applied to white collar crime.
If the punishments are fines, they will just get built into the budget as a predictable expense. Same as the price for bribing public officials.
I assume I'm safer counting twenties on the sidewalk at night than in a Wells Fargo lobby during business hours.
36: Well, maybe gaslighting in the original sense is not the right word, maybe getting angry because one thinks one is getting gaslit needs its own verb. I am not saying that robbery and burglaries really are a bigger problem in people's lives. I am saying that people may feel them much more keenly and respond badly to the assertion that they're significantly less damaging. It may be that a large chunk of the population overpredicts being subject to violent crime that just isn't going to happen to it. But I'm really talking about how we perceive crime that's already happened to us and people we know -- how we remember it, how it impacts us, how we feel when people tell us it's not very important. You can use statistics all you want to tell people that unlikely thing they're afraid of deserves less fear, and eventually they might believe you. Once they've experienced something, telling them it wasn't as bad as they think it was is a very different
emotional proposition, and it's not going to become less emotionally stressful just because it's getting rarer. Its not a rate-based sensibility but a cumulative sensibility . There were 108,000 strong arm robberies recorded in 2018. The Robbery rate was 3x what is now 30 years ago. There was a was a surge in robberies turned murders then (tied to gun proliferation), one that the older half of the country is old enough to remember; anyone between age 35 and 55 might have formed strong memories around that surge. A lot of Americans old enough to be active in politics have a strong emotional memory of a violent robbery that already happened. Throw in burglaries (3.7 m last year, also about triple the rate 30 years ago), which many people find deeply violating and disturbing over even paltry amounts, and that's even bigger. If my hypothesis is correct, and lots of people just don't have the same emotional connection to wage theft, then the case is going to have to be made with something stronger than comparative dollar amounts and even the probabilistic expectation values for death and injury.
38. You're right that in general that's a common practice for consumer-serving businesses, which is a shame.
Violating FCPA has consequences affecting eligibility for a bunch of federal contracts, kind of a fine, but a consequence that is extremely expensive for companies that rely on those. Don't know about the details of bribing domestic officials, but basically, federal contracting (at least the bidding rule-following kind) is a tangled thicket of requirements and penalties.
I've been mugged (I got off incredibly lightly, but a coworker had had his face bones smashed earlier that year) and separately lost a couple paychecks to wage theft. I've since gotten all upper-bougie and the mugging is far more memorable now, but at the time of the mugging the loss of the money affected my life more and it wasn't clear how to find a better job.
I doubt this generalizes, unless it's a standard reaction by youngish poorish people, who are a growing segment of the electorate.
Two paychecks (assuming bi-weekly) is enough to put most younger people in danger of losing housing unless they have family support or something.
Adding to Saheli's point: it's unfortunate but for a decent segment of the population, wage theft or problems with wages are just expected as part of life generally being unfair. When shiv worked on oilfield stuff, there was a month where the paychecks weren't cut on time. It turned out to be nothing more than an error in processing. But what was interesting were the number of workers who just didn't say anything. Questionable immigration status in some cases (mostly Latino), but more like a pervasive sense that sometimes the man just screws you over but you don't have a lot of options. If wage theft is expected, and robberies aren't, people are going to feel the loss differently.
During my stint as farm labor, my boss found out after we were a couple of days into a job that the owner was a guy with a particular penchant for slow-walking or dodging payment. He was not happy (though he did get paid on time).
Wage theft is a lot less likely to make you feel like violence is imminent.
Even treated as a type of fraud, other types of fraud seem to have bigger consequences than wage theft. I mean, they keep putting on TV commercials to let me know that insurance fraud isn't the easy money solution I've been lead to believe it was.
44: I would guess the element of surprise is a big part of it, but also the physicality. I hate to get all Velty, but how implausible is it that we're more hardwired to be upset when a member of our herd jumps us and steals our food, or food we had already stored up was taken from our little cave, versus going on a hunting and gathering expedition and just not getting the stuff we hoped and planned to get.
I don't know how you'd actually study and validate/invalidate my hypothesis, let alone do so enough to help shape a meaningful and effective narrative to combat it. Direct experimentation would be an ethical minefield.
he would support ending the tipped-minumum wage.
Saint José Andrés, who does organize good works and whose restaurants I like, opposed DC's Initiative 77 that would have done this. The initiative passed but the DC Council knows who really butters the metaphorical bread and blocked 77 from going into effect. Andrés' NYC operation was also taken to court, and lost (yay!), over wage theft.
I've lost a couple of wage 'theft' cases (unsuccessfully defending employers). Both involved interpretations of vaguely worded provisions of employer policy, applied to fairly unique sets of circumstances. In one case, there was legislation to overturn the result; I'm not sure whether it's still on the books.
In one state, there was an administrative agency you could file a complaint with, that acted quite quickly.
There was a hemp processing thing out in the suburbs here that closed without paying people. I think the moral of the story is that hemp is mostly bullshit because it has no THC.
Anyway, IME, juries hate wage theft.
Just looking, I see that Pennsylvania does have criminal penalties: In addition to any other penalty or punishment otherwise prescribed by law, any employer who violates any provisions of this act shall be guilty of a summary offense and, upon conviction thereof, shall be punished by a fine of not more than three hundred dollars ($300), or by imprisonment up to 90 days, or by both, for each offense. The good faith contest or dispute by any employer of any wage claim or the good faith assertion of a right of set-off or counter-claim shall not be considered a violation of this act: Provided, That the employer has paid all wages due in excess of the amount in dispute or asserted to be subject to a right of set-off or counter-claim. Nonpayment of wages to, on account of, or for the benefit of each individual employe shall constitute a separate offense.>/i>
I wonder how common this is.
Texas also has criminal penalties, although more limited than those in Penna:
(a) An employer commits an offense if: (1) at the time of hiring an employee, the employer intends to avoid payment of wages owed to the employee; and (2) the employer fails after demand to pay those wages.
(b) An employer commits an offense if the employer: (1) intends to avoid payment of wages owed to an employee; (2) intends to continue to employ the employee; and (3) fails after demand to pay those wages.
(c) An employer commits a separate offense under Subsection (b) for each pay period during which the employee earns wages that the employer fails to pay.
(d) An offense under this section is a felony of the third degree.
The circumstances in 44 would not be a violation of that law, because anyone who keeps quiet about it isn't demanding the wages due.
Nope Charly, a law student has spoken. Wage theft is not a crime.
It also shows how ridiculous the label "high crime neighborhood" is. And the arbitrary and racist response of police surveillance in HCN. Because we defined it that way.
Consider the social construction of murder: 12/
Poison a person, go to jail, they call you a felon for life. Poison a city resulting in dozens of deaths and thousands with brain damage, get a teaching fellowship at Harvard, they call you ex-Gov of Michigan Rick Snyder. Same with much corporate poisoning. 13/
Jesus Christ. How damn stupid is this guy. Demand for increased police resources in these communities is racist because they just don't understand the "social construction of murder". Sure there's an ungodly number of violent homicides and shootings in these neighborhoods but look over there! Corporate pollution!
56: I think you're misconstruing it. The shocking thing is not that if you poison a person you're a murderer, it's that if you're a government official and allow large numbers of people to die, you're not. That's what socially constructed.
The comparison is dumb. And he glosses over the fact that the Gov. wasn't personally supervising Flint. It was an appointee and a bunch of other officials of which over a dozen were charged.
Or this.
It also shows when harm is committed, we don't have to lock someone in a cage or label them a felon, both of which destroy years of life even after the sentence is over. We can demand restitution instead of punishment.
Really? National murder rate in the U.S. is 5 per 100K. Englewood neighborhood in Chicago is approaching 200 per 100K with 3 months of the year to go. No one needs to be locked up? And what exactly does restitution look like when you shoot up a party?
I don't work on wage theft, but I have known a several folks who do. Overwhelmingly, their experience is that it is not taken seriously and not prosecuted to NEARLY the extent that it should be. In part that is because employers often impose it against workers who are vulnerable for various reasons (age, income level, educational level, social class, occupation, immigration status), in part it is because it is accepted in a kind of grim way that Cala describes in 44, and in part because there is intense social pressure on low-level and middle managers to commit it and few expectations of consequences for those who do.
(Back when I used to work with directly, I had plenty who had experienced wage theft. Many never filed a complaint, either because they didn't know how or didn't have any confidence that the system would work for them.)
The organizers working with "car washeros" in Los Angeles found that even when they won wage judgments against employers, the employers would often go out of business in order to avoid paying the judgment, and then reopen under another business name. They had to pursue additional policy (can't remember now if it was city council or state legislature) to get the judgment to follow the person rather than the business name. I'm probably getting the legal language wrong there.
Back when I used to work with *clients directly.
And I don't know what happened to my last sentence. It was supposed to say "Car washes are notorious for those kinds of abuses."
But 59 reminds me that the most common form of wage theft is paying for only forty hours in a week no matter how many are worked. Unless you have another job, you can't even think about trying to get help.
The Kleiman book is here. Beccaria was arguing this back in the 18th century, but now there's pretty solid data supporting it.
Just talking out of my ass, I would guess that this is actually even *more* true of white collar crime. What you really want is *internal controls* on corporate malfeasance, but for those to be implemented, crime has to *reliably* hit profits. If punishments are rare but catastrophic, you get "I'll be gone, you'll be gone" behavior -- you need it to be likely enough that any given middle manager who ignores the issue will almost certainly get hit during an average-length tenure in a relevant position.
But really we should be asking dsquared about this, no?
And what exactly does restitution look like when you shoot up a party?
I probably shouldn't take the bait given that this is kind of a derailment of the discussion, but a google search for "restitution prison abolition murder" brings up a lot of hits. People have actually thought about this issue!
A recent development has been things like the Bribery Act where it's an offence to fail to have adequate precautions - there doesn't have to have been an actual crime at all. Of course that relies on proper enforcement as well, but it's probably a move in the right direction.
59: are these the kind of car washes we have, where you have a big drive through thing with the rotating brushes, or is it just a yard with a few guys with buckets and sponges? If the former, that's an asset of the business that could presumably be seized and sold, even if (especially if) the car wash goes out of business.
re: 62
That's my entire working life.
As I've moaned about here many times before, there's very definitely a level in the hierarchy, at least in companies and institutions in which I've worked, at which that becomes a massive issue, and contra what a lot of people assume, it's definitely not junior people, or the least powerful in the hierarchy. There's a certain level of middle management or senior technical person (in my experience)* who do a disproportionate amount of the work, and who just end up getting death-marched through project after project.
* like senior non-comms in the military, I expect
66.last: senior NCOs and junior officers. Except subalterns, because no one with any sense trusts a subaltern to do anything without adult supervision. But sergeants, colour sergeants, WOs, captains and majors, definitely.
Also don't hire loan sharks who charge >100% interest rates as laborers.
Late payment penalties tend to be a bit higher than loan interest rates, because the loan was voluntarily entered into. If the rate's high, then the employer has a simple solution: borrow the money from the bank at 5%, rather than from his own unconsenting employees at 100%. And if the bank won't lend him the money... well, then, he's a bad credit risk, and the effective rate the employees are charging him is justified.
Do 40 hour work weeks apply to salaried workers if it's not explicitly spelled out in a contract? I've always seen salaried arrangements where it's "we pay you this much per pay period" and the requirement is do your job, no explicit number of hours stated for doing that job.
Normally the required hours will be in a contract, at least over here, but there's some clause about you may be expected occasionally to work longer hours. If there are shift requirements they'll be in there too - as in, for example, a newspaper which needs to have a night editor.
Somebody needs to write a "broken windows" theory of white collar crime, where the windows are replaced with tax evasion.
Dsquared basically has, for fraud at least. Though the theory is you need to have some broken windows to reduce the incidence of fraud, because if nobody has broken windows, nobody expects to get their windows broken and isn't on the lookout for window breakers.
Late payment penalties tend to be a bit higher than loan interest rates, because the loan was voluntarily entered into.
On the other hand, statutory penalty interest in England & Wales is "only" 8% over BBR (ie 8.1% at the moment).
40: I'd be interested in your sources on the rate of burglaries tripling over the last 30 years, because in general crime in the US peaked in 1991 and has been falling ever since.
This site
http://www.disastercenter.com/crime/uscrime.htm
has pretty clunky design, but its numbers suggest that the rate of burglaries per 100,000 people has been below the level of 1960 since 2015.
72: typo, I think. "The Robbery rate was 3x what is now 30 years ago." s/b "The robbery rate was 3x what it is now 30 years ago".
73: This, too (also from 40)? "Throw in burglaries (3.7 m last year, also about triple the rate 30 years ago)"
Trying to parse what the writer means.
I suppose that could mean "it was also about triple the rate 30 years ago" rather than "this figure is triple the figure from 30 years ago"- though the burglary rate wasn't 3.7m last year, it was more like 1.2m.
That's obviously the point Saheli is trying to make - that crime rates were much higher 30 years ago and this was a formative time for a lot of people.
69: There are rules about who can be legally salaried and that where lots if the fraud is.
The stuff ttaM is talking about isn't even close to illegal here unless the pay is very low.
Crime rates were much higher 30 years ago, but they are generally back on the upswing now (higher now than 5 years ago), which has shaken my confidence a little bit in how much of the change is due to lead alone.
I haven't seen the numbers, but it is up more than you'd expect with a bigger cohort of young adults right now?
Never forget the scientific backup for the broken windows theory was Zimbardo and his grad students farting around and smashing up a car for fun, and the resultant paper being laundered through the Atlantic toward get-tough priors.
Sorry, I had two major typos there. I'll try to fix later. . .I was on my phone, and have lost those tabs.
53, CharleyCarp: That stuff about intent is puzzling me. How could you prove intent to not pay unless you had a cartoon villain's speech? Is that supposed to get minimally-plausible bullshitters off, or is it to protect (eg) people who could have paid their wage debts if debts owed to them had been paid on time?
Rich powerful people will confess almost anything on tape.
83 The latter is my guess -- you're not going to prove intent beyond reasonable doubt if the wages were budgeted, and the shortfall unexpected (e.g. upstream non-payment). But if the employer had set out not to pay -- like those car washes or Chinese restaurants in NYC -- you might well find some circumstantial evidence of intent. Jurors hate wage theft, and they'll draw inferences if you can put some evidence in front of them.
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NMM2 Diana Rigg (some people might actually need warning).
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Ok
86 pwned by me in the other thread but your point is well taken, as I said she was my first childhood crush.