Is your boss stealing from you? Probably.
Paul Rosenberg wrote recently about how wage theft against the bottom 15 percent of the workforce is "so widespread that workers in just three cities-Los Angeles, Chicago and New York City (total population about 15 million)-had roughly $2.9 billion in wages stolen from them in 2008." The workers surveyed had lost an average of 15 percent of their legal wages. Now that kind of theft is in outright violation of the law, not that anyone who can do something about it cares.
There's also the wink-and-a-nod theft, where the real price paid for labor (real wages adjusted for inflation) hasn't gone up in decades while productivity and profits have increased. It sounds infuriating, but abstract, in the way of most talk about increased shareholder expectations and bloated executive salaries. Blah. Yadda. But this is not abstract:
That figure happens to be the value added per person employed in the United States for 2006 (via.) That's an average, of course; the productivity of everyone in the workforce added together and divided by the number of workers. It's not a direct correlation, but here's a figure to compare it to:
That was the United States' median household income for 2006. That's the total number of households, perhaps with multiple wage earners, divided by half and measured against the value at the 50 percent mark; half the households in the US in 2006 made at least $15,185 (or about 24 percent) less in total, pre-tax income than the value added to the economy by one, average worker.
|If the typical worker had to be making around $63,385 in 2006 just to be getting paid for what they produced, who got the other 24 percent? Particularly bearing in mind that 24 percent is a lowball, the difference between the value added by an average worker and the maximum total take-home pay of the bottom 50 percent of households.
Even considering that we all understand administrative overhead, that's a big margin. And again, it understates the number of people being paid less than they produce. The Census Bureau's report on household income by quintile for 2006 shows that only 40 percent of households make more than $60,000 per household, per year.
This means that work is a suckers' game for at least 60 percent of us at the most generous possible reading. Workers invest an average of $63,000 worth of value and most lose money on that investment, obscured by the perception that $63,000 a year would be a pretty good salary.
It only sounds like a good salary for the same reason that my dad could never get used to the idea of paying $40 for a pair of jeans for a teenager, and why I still think they should never cost more than that: individual human beings can't calculate inflation over the long term for sh*t. People who grew up in an era when 'making your age' in thousands was a good salary are poorly prepared to understand that earning $63,000 is just break even.
The practical implications of this serendipitous-for-your-boss perception only take on full significance when paired with Wall Street expectations for return on the investment of capital.
It raises no eyebrows to insist that invested capital should earn much more than its inflationary, real value every year. Perhaps with dividends. Businesses that don't provide high enough positive earnings (let alone negative ones) for monetary investment are considered to be 'bad' investments, they run afoul of the same people at AIG and Goldman Sachs that felt entitled to collect huge bonuses out of our tax dollars as a reward for crashing the world economy.
To the contrary, businesses that provide negative returns for labor invested are explicitly considered 'good' capital investments.
It isn't surprising that people with capital to invest would hold that set of values. What is surprising is that people who mainly, or solely, invest economic value in the form of labor usually accept those values as a given. Where's the profit-sharing for labor investment?
Or, as Adam Smith so memorably said in Wealth of Nations:
"We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform, combination, not to raise the wages of labour above their actual rate...Masters, too, sometimes enter into particular combinations to sink the wages of labour even below this rate. These are always conducted with the utmost silence and secrecy till the moment of execution; and when the workmen yield, as they sometimes do without resistance, though severely felt by them, they are never heard of by other people" In contrast, when workers combine, "the masters...never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combination of servants, labourers, and journeymen."
The tradition of employer theft may well have started with the advent of grain farming, grain being easy to store in ways that earlier types of food simply weren't. It will probably be with us always, like the poor, and maybe that's even a meaningless coincidence. But the more its excesses continue getting a pass, the worse it will get. Sort of like the behavior of politicians.
Our employers have been stealing from us. Without public intervention in healthcare and the Employee Free Choice Act, the toll of their theft of time, energy and wages are unlikely to ever be made right in sight of a recession that's widening the income gap.