One of the great myths of the American policy debate is that poor people are poor because they don’t (or won’t) work. While it’s true that unemployment is still a huge problem in many places, it’s also true (and increasingly so) that work is no panacea — especially for people of color. This is especially and tragically true in states like North Carolina.
For the latest confirmation of this harsh reality, be sure this morning to check out a this new data-rich report by the Working Poor Families Project entitled “Low-income working families: The racial/ethnic divide.” The report documents how race and ethnicity factor into the poverty of working families and, among other things, highlights the widening gap between white and minority families since the start of the Great Recession. It also looks at differences by geography. Here are the key findings:
- Among the 10.6 million low-income working families in America, racial/ethnic minorities constitute 58 percent, despite only making up 40 percent of all working families nationwide.
- The economic gap between white and all minority working families is now 25 percentage points and has grown since the onset of the recession.
- There are 24 million children in low-income working families and 14 million, well over half, are racial/ethnic minorities.
- Over 50 percent of Latino, low-income working families have a parent without a high school equivalency degree, compared with 16 percent of whites.
- Working families headed by minorities have higher incomes in the Mid-Atlantic region, Alaska, Hawaii and parts of the Northeast, compared with minority working families in the upper Midwest and Mississippi Delta regions
Sadly, North Carolina doesn’t fare as well as the “Mid-Atlantic” region. According to the report, more than half (55%) of working families in our state who are racial and ethnic minorities fail to bring home a true “living income” — i.e 200% or more of the official federal “poverty” threshold. The national average is 47.5% for racial and ethnic minorities. The report also highlights North Carolina’s recent repeal of the state Earned Income Tax Credit as a contributor to this deplorable situation.
Click here to read the entire report. State-by-state data can be found on page 14.
Employers reduce labor costs by misclassifying workers who should be on their payroll as employees, and instead calling them independent contractors. This employer payroll fraud was exhaustively documented by Mandy Locke and her team of reporters in the News & Observer’s series “Contract to Cheat” last fall. It costs the state millions of dollars in unpaid payroll taxes, leaves our unemployment insurance system without revenue to cover unemployed workers, and deprives workers of health insurance,
One of the most damaging consequences of employer payroll fraud is that injured workers are without workers’ compensation insurance. By purchasing so-called “ghost worker” policies, employers can avoid providing real coverage to their workers. Too often, this practice takes place in dangerous industries like construction, which just last year experienced 19 worker fatalities in North Carolina.
Tracking down what appears to be a negligible problem with worker’s comp claims is a misdirected effort. There are many things the General Assembly could do to combat payroll fraud, including worker’s compensation fraud, including increasing penalties for employers who violate the law, beefing up state agency enforcement and collaboration, and providing better enforcement tools such as stop work orders.
Check out the News and Observer’s extensively documented series, Contract to Cheat, on the obstacles faced by workers who are misclassified, and how they are being failed by the government agencies that are supposed to protect them. The Justice Center released a report on wage theft, which includes misclassification, in 2013.
State leaders are, at last, vowing to do more. They had an opportunity to do so in 2011 and 2013, with legislation introduced by Rep. Rick Glazier to increase penalties for employers and inform workers of their legal rights. Rep. Larry Hall also introduced a bill in 2013 that would have created a fund to help workers whose employers fail to carry workers’ compensation insurance as required.
There is a whole host of things the General Assembly and state agencies could do that would go a long way toward fixing this problem, including:
- Increase penalties for employers who misclassify their employees
- Provide workers with information at the time of hire about how they are being classified, what that means, and their right to be correctly classified
- Workers should be presumed to be employees. If a worker is to be treated as an independent contractor, the company who hires that worker should have to prove that the classification is correct.
- The NC Department of Labor should go after employers who misclassify and should be allowed to issue stop work orders against those who don’t carry workers’ compensation coverage
- North Carolina should have a fund to help workers whose employers fail to carry required workers’ compensation coverage
- The Division of Employment Services, Department of Revenue, Industrial Commission, and Department of Labor should systematically share information about employers who misclassify workers.
For more information about the legal rights of misclassified workers, look at the Justice Center’s fact sheet.
It’s National Farmworker Awareness Week: Time to celebrate the dedication and strength of the people who plant and harvest our food. Farmworkers are exceptional people in so many ways: their incredibly hard work, the courage of many of them in seeking a new life in another country, and their persistence in the face of so many challenges. Unfortunately, farmworkers are also exceptional in a way that no one wants to be. Agricultural exceptionalism is a well-established concept in American law – the notion that agriculture is somehow so different from other industries that this justifies treating agricultural workers in ways we would not dream of treating other workers.
What does agricultural exceptionalism mean for farmworkers? For starters, no entitlement to overtime pay for hours worked over 40 (and there are many of those long hours during peak harvest season). There’s also no minimum wage for labor done on a small farm. Farmworkers who join together to press for better living and working conditions don’t have federal labor law protections. Children as young as 10 can legally work in the fields. And most North Carolina farmers are not required to provide workers’ compensation for their employees, who toil in one of the most dangerous jobs in the country.
Let’s take this Farmworker Awareness Week to support those who push to make farmworkers unexceptional, including:
Please use this Farmworker Awareness Week to join their fight.
A grand jury in Greensboro last week handed down a 41 count indictment against the owner and operator of a firm that brings in foreign workers for temporary agricultural and non-skilled jobs in North Carolina and around the Southeast. According to WRAL, the indictment charges Craig Stanford Eury and Sarah Farrell of International Labor Management Corp. with submitting fraudulent visa applications in an attempt to evade caps on the number of workers who can enter the country on H-2B visas and moving workers on agricultural H-2A visas into non-agricultural H-2B positions.
Much has been written about the problems with the H-2B and H-2B programs. The Southern Poverty Law Center’s seminal report, Close to Slavery, details the exploitation at the heart of a “guestworker” system which ties workers to a single employer and provides no way for them, many of whom leave families year after year to perform thankless work in the U.S., to ever create a permanent home here. The unfair treatment of U.S. workers who don’t get a fair shake at these jobs are described in Farmworker Justice’s No Way to Treat a Guest. Hopefully those messages will not get lost in stories about an indictment that focuses on sleight of hand tactics to game a system that is, at its core, patently unfair to the workers (immigrant and U.S. citizen workers alike) who just want to support themselves and their families.