"Increase in Minimum Wage Law Violations During US Recession...Wages Received on Average 20% Less"

NYT "Employers Hard to Respond Even If Paying Lower Wages"
People of Color and Manual Laborers More Vulnerable

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] During economic recessions, the rate of wage theft and violations of the minimum wage law increases, causing even more difficulties for already vulnerable low-wage workers, the New York Times (NYT) reported on the 3rd (local time).

NYT cited a report released that day by the progressive think tank Washington Center for Equitable Growth (WCEG), stating that the proportion of workers experiencing minimum wage law violations rose in tandem with the unemployment rate during recessions. On average, these workers were found to be unpaid for about 20% of their hourly wages due to minimum wage violations.

NYT explained, "As of last April, when the U.S. unemployment rate exceeded 10% and reached its peak, this means that more than 20% of low-wage workers were likely paid less than the legally mandated minimum wage." It added that workers in construction sites, grocery stores, and clothing shops already struggle to receive full wages even when their industries are booming, and recessions only exacerbate this issue. Furthermore, workers who are people of color, women, or non-U.S. citizens face even greater hardships.

The frequent violations of the minimum wage law during recessions are due to reasons beyond employers facing cash flow shortages. First, as city and state governments cut budgets during recessions, the funds available to labor regulatory agencies decrease, making it difficult for authorities to investigate minimum wage violations.

Additionally, as economic conditions worsen, the number of jobs available to low-wage workers diminishes, making it harder for workers to respond even if employers pay less. Janice Fine, a professor at Rutgers University who conducted this study, explained, "In a labor market depressed by high unemployment, workers find it difficult to come forward due to fear of job loss."

This content was produced with the assistance of AI translation services.