Wage Theft and Shoplifting: Same Cost, Different Deterrents

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Each year, shoplifters steal roughly $14.7 billion worth of goods from stores. (So says the Retail Theft Barometer.) Each year, employers steal roughly $15 billion from their workers by paying them less than the minimum wage, according to data from the Economic Policy Institute.

The treatment of these two kinds of crime, however, are completely different.

Many more resources go into trying to deter, detect, and punish the guy trying to pinch a video game system off the shelf at the local big-box store than into the grand theft the store itself may be perpetrating against its own employees—even if the retailer is taking millions of dollars from workers’ paychecks. It’s one more way that the economic crimes of the powerful are treated far less seriously than the transgressions of those with less power.

In a recent study, I compared the damage from shoplifting with that from just one form of wage theft, the failure to pay workers the legal hourly minimum. Other forms include failing to pay overtime, stealing tips, making employees work off the clock, and still more employer schemes to pocket money that workers have legally earned. While it is more difficult to estimate the total loss from these other forms of wage theft, there is no question that they dwarf the losses attributable to shoplifting.

The impact that wage theft and shoplifting have are not remotely comparable. While shoplifting is certainly not a victimless crime, its consequences pale in comparison to wage theft. In fact, an estimated 4.5 million working people are victimized by minimum-wage violations alone, pushing 302,000 families across the nation into poverty.

Yet despite the tremendous magnitude of wage theft, retailers spent 39 times more on security in 2015 than the entire Department of Labor budget for enforcing wage standards that year. This disparity in funding creates a disparity in personnel: While there are 43,930 security guards working for retailers, the Department of Labor only retains 1,000 investigators tasked with enforcing wage laws for 7.3 million U.S. workplaces and 135 million workers. Under Trump administration budget proposals, resources for enforcement would face even greater cuts.

The security guards and federal wage inspectors aren’t the only enforcers of these respective laws, of course. On the retail security side, other employees, from fitting room attendants at a clothing store to convenience store clerks, are expected to play a role in preventing shoplifting, as are the thousands of local police officers enforcing laws against shoplifting. On the wage-theft side, state and local labor departments and attorneys general can support federal efforts to enforce wage laws, but they generally have access to even fewer resources than the federal government.

What happens when shoplifters and wage thieves get caught? Shoplifters may end up in jail, facing a fine and months behind bars for a misdemeanor conviction. Depending on the state, a thief caught making off with merchandise worth as little as $200 can face felony charges. In contrast, criminal charges of any kind are rare in cases of wage theft, even when millions of dollars are systematically stolen from employees over months or years. The fines imposed by the federal Fair Labor Standards Act often amount to a slap on the wrist; they’re too weak to act as an effective deterrent.

Worse yet, employers increasingly prevent workers from going to court to recover stolen pay by imposing arbitration agreements that curtail employees’ ability to sue the company or participate in a class-action lawsuit.

A look at the victims and perpetrators reveals a great deal about why the deck is stacked in favor of wage thieves. The victims of minimum-wage violations are, by definition, working people who are supposed to be paid the minimum wage and yet receive less—certainly not the most politically or economically powerful group in our society. And while any working person can be cheated out of wages, women, people of color, and immigrants (especially undocumented workers) are not only more likely to work in low-wage jobs, but disproportionately become victims of wage theft when they do. Victims of shoplifting, on the other hand, are businesses, including some of the nation’s most powerful corporations. And while shoplifters may be of any race or ethnicity, the phenomenon of “shopping while black” reveals that people of color, particularly African American consumers, are disproportionately profiled as potential shoplifters, contributing to the racial disparity that plagues the criminal justice system.

At a time when our economy is clearly tilted in favor of power and privilege, strengthening laws against wage theft—and providing more resources for detection and enforcement at the state, local, and federal levels—would help un-rig this part of the system, making it fairer for us all.

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