Proposed Rule Would Worsen U.S. Wage Theft

Why does state capitalism fail to adequately deliver the liberty, egalitarianism, and fraternity that were desired by the people who overthrew feudalism and slavery? Could it be that the relationship between employer and employee is still too similar to that of lord and serf and master and slave? Is this relationship at the core of production the undercurrent for many societal problems?

Low-paid working women are often at the greatest risk for abuse, particularly if they are in service professions.

At the same moment, the Trump administration is pushing a rule that could make tipped workers even more vulnerable to harassment. In early December, the Labor Department—urged on by the restaurant lobby—announced a plan that could allow employers to steal tips from their workers. Under the new rule, employers could pool all tips and distribute this money to other workers, including non-tipped workers—or keep it for themselves. The Economic Policy Institute estimates that the rule could allow employers to pocket $5.8 billion in workers’ tips each year, in an industry where 66 percent of workers are women and 25 percent of workers are women of color.

This could result not only in the theft of tipped workers’ wages—even though they are already nearly twice as likely to live in poverty as other workers—but it could also increase their likelihood of being sexually harassed. Tipped workers are often at the mercy of customers to make ends meet financially, and the new rule would add additional pressure from employers and managers who would control the distribution of tips. That could drive conditions from bad—accommodations and food service workers already account for 1 out of 7 sexual harassment charges filed with the U.S. Equal Employment Opportunity Commission—to worse.

And the proposal’s effects don’t stop with tipped workers. If employers choose to redistribute the tips to other non-tipped employees, they could classify them as tipped workers and knock their base wage down to $2.13 per hour. This could raise their risk for sexual harassment as well as wage theft because, while employers are legally required to ensure tipped workers are paid the minimum wage, evidence shows employers often don’t.

There is, of course, another option: Instead of rushing through a rule that will lower wages and increase vulnerability to harassment for tipped workers—all with a very limited period for public feedback—the Trump administration could focus on paying tipped workers fair wages. That means eliminating their separate minimum wage, which is something the minimum wage bill before Congress would do. Evidence shows this would work: In the seven states that have abolished the separate tipped minimum wage—where employers are now required to pay their workers at least minimum wage—tipped workers take home higher pay and are less likely to experience harassment. Pair that with solutions to reduce sexual harassment in the workplace, and you’re poised to make progress not only on economic security but also on reducing the number of workers who have to say #MeToo.

The option I ideally prefer is different: Let the workers themselves run the enterprises democratically so that the key power rests with them. Most people are motivated primarily by self-interest (though whether that ends up being beneficial or harmful to others is another question) and would not seek to vote against themselves by choosing unnecessarily low wages.

Feature on the Opioid Crisis

The Empire Files program did a feature on the opioid crisis that focuses on the behavior of criminogenic pharmaceutical corporations. It is particularly notable for noting that big pharmaceutical corporations have targeted and still do target economically ravaged places suffering from significant despair.

Economic despair is at the core of the opioid epidemic. A lot of those people addicted to opioids would have done much better if they had meaningful work to occupy their time and give them a sense of purpose. Unfortunately though, in many sectors the economic system is so dysfunctional that it fails to provide even basic elements of meaningful community work for people.

There’s a disturbing graph that shows utilization of capacity, and it reveals that there are many, many billions of dollars being lost due to capacity such as buildings not being used. It isn’t because there’s a lack of needed work — on the contrary, looking around plenty of places will have a reasonable person saying that there’s a lot that needs to be done. So there’s a lot of work that needs to be done and a lot of capacity (23 percent in the graph) pointlessly sitting idle, and there’s an economic system that isn’t putting them together for productive benefits.

Screenshot-2017-12-5 Capacity Utilization Total Industry

The U.S. government could enact a massive infrastructure project that would create millions of jobs and/or it could provide low interest loans to support worker cooperatives in economically downtrodden communities. There are other solutions too, and they also need significant will to be applied. The point to make here though is that the situation doesn’t have to be that bleak for the communities, and there’s actually a clear enough method to reconstruct what has been mismanaged.