Combating Wage Theft

Dean Baker
TPMCafé Book Club (Talking Points Memo), May 11, 2009

This article was published by the TPMCafé Book Club, on Kim Bobo's new book, Wage Theft in America: Why Millions of Working Americans Are Not Getting Paid - And What We Can Do About It.

It is great to see Kim Bobo's book on wage theft drawing attention on TPMCafe and elsewhere. It is outrageous that millions of workers have their earnings stolen from them by their employers. Hopefully, this book will help to ensure that enforcement is stepped up so that this practice is brought to an end.

However, one aspect to this issue has intrigued me. Wage theft is often seen as an issue of regulation. The idea is that we need an effective regulator at the Labor Department to ensure that employers do not steal wages from their workers.

This is intriguing because there is no reason to view this as a question of regulation: it is a question of law enforcement. Would anyone call the prevention of shoplifting a problem of regulation? How about the prevention of bank robbery?

In these cases everyone clearly recognizes the problem as one of law enforcement. We want the police to arrest people who shoplift from stores or rob banks. It's very simple. But, when it comes to employers who steal wages from their workers we want the government to "regulate" so that this does not happen.

This is yet another case where we allow an argument to be framed in a way that disadvantages progressives. The issue here is property theft just as it is in the case of shoplifting and bank robbery. We should insist on discussing it in that context (as is obviously done in the title "Wage Theft in America").

There is no reason that stealing wages from workers should be any more acceptable than robbing a bank. We are not looking for the government regulators to overturn market outcomes; we want the police to enforce the rules of the market. The police manage to enforce the rules pretty well when it comes to the property of the wealthy. We just need the same sort of enforcement when it comes to the property of low-paid workers: their wages.

Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of Plunder and Blunder: The Rise and Fall of the Bubble Economy. He also has a blog on the American Prospect, "Beat the Press," where he discusses the media's coverage of economic issues.