European Markets Slip on U.S.-China Tensions: Live Updates
The rate at which workers suffered violations of minimum-wage law increased almost in lock step with the unemployment rate during the last recession, according to a paper released Thursday by the Washington Center for Equitable Growth, a liberal think tank. On average, the workers on the receiving end of these violations lost about one-fifth of their hourly wage.
The paper’s numbers show that more than 20 percent of low-wage workers were probably paid less than what the law requires in April, when the unemployment rate peaked, up from just over 10 percent before the pandemic.
There are two key reasons, beyond the obvious problem that employers are stretched thin during a recession. First, workers have fewer job options when the economy is weak, making it harder to stand up to employers that shortchange them.
In addition, labor regulators often have fewer resources to devote to enforcement during a recession, as cities and states cut their budgets.
The lack of effective regulation reverberates through entire industries, the study’s authors write: Unchecked wage theft allows unscrupulous employers to undercut their law-abiding competitors and puts pressure on those competitors to shortchange their workers as well.
Restaurant suppliers like bakeries scaled back workers’ hours and laid off many of them during the pandemic, driving workers who had made the minimum wage or more into less stable, lower-paying gigs, said Gabriel Morales, the program director for Brandworkers, a group that organizes workers in the specialty food-making industry.
“People are being pushed into even more exploitative sectors of the economy,” Mr. Morales said.
Article source: https://www.nytimes.com/live/2020/09/08/business/stock-market-today-coronavirus