Wage theft

Published March 18, 2023
The writer is a researcher in the development sector.
The writer is a researcher in the development sector.

THREE years have gone by since the WHO declared the Covid-19 outbreak a pandemic on March 11, 2020. Termed as the world’s most serious humanitarian crisis since World War II, it is still being debated whether the pandemic is over or not as new infections and deaths occur in a number of countries. By February 2023, 6.8 million people had died. Besides, hundreds of millions of people lost jobs globally, millions saw their salaries cut or work hours reduced. Most countries have not yet returned to the levels of employment and hours worked before the outbreak. According to an ILO report, informality and working poverty have risen further with the Covid-19 crisis.

While the majority of people suffered from the pandemic, a tiny minority — corporate executives and wealthy shareholders — reaped profits. A 2022 report, Profits and the Pandemic, sheds light on how 22 leading corporations (eg, Amazon, Disney, McDonald’s, FedEx) in retail, delivery, fast food, hotels and entertainment, generated $1.5 trillion for shareholders in the first 22 months of the pandemic, nearly triple the wealth generated in the previous 22-month period.

Similarly, in the apparel and textile sector, a new report Big Fashion & Wall Street Cash in on Wage Theft reveals astounding amounts gained by the owners of the 20 biggest brands in April and May 2020 as millions of garment workers in supply chains were being laid off. In both cases, the windfalls primarily came through stock buybacks (company buying shares of its own stock with cash). The report, released on Feb 27, 2023, by Asia Floor Wage Alliance, Global Labour Justice-International Rights Forum and 20 garment worker unions from Bangladesh, Cambodia, India, Indonesia, Pakistan and Sri Lanka, documents the great wage theft of Asian garment workers which led to high corporate profits.

Earlier in 2021, the Alliance had brought out a report Money Heist that surveyed 189 factories and 2,185 workers in the six countries. The report documented wage theft amounting to $163m as garment producers violated national laws. Pakistan’s survey revealed that 86 per cent workers were laid off and 14pc terminated. Workers reported 29pc wage theft, though during this period overall export declined only 2pc. The majority, 81pc, of workers were pushed below the international poverty line. With the release of the 2023 report, Asian trade unions and support groups have launched the Fight the Heist campaign, demanding an end to stock buybacks by the big brands.

Only unions can take the struggle forward.

Wage theft occurs when employers steal pay from their employees, that is when they do not pay as mandated by law. Examples include paying less than the minimum wage, not paying overtime, denying rest breaks, increments, benefits or facilities committed to by the employer at the time of employment.

Wage theft is not new: it has been a central aspect of business models in capitalism. What is new is the traction it is gaining among researchers and labour rights activists, particularly its quantification. In recent years, surveys and research have come out in several countries. In the US, a 2017 survey indicated that the annual total wage theft in the US due to minimum wage violations exceeds $15 billion. In 2019, wage theft in Britain amounted to around £35bn. A report (December 2021) from Karnataka, India, revealed that over 400,000 garment workers were being paid below the legal minimum at more than 1,000 factories since April 2020. Labour groups estimated the wage theft amounted to more than $50m.

Wage theft is a crime committed by factory owners against workers for which they are not prosecuted. This theft may be considered morally wrong but is not termed criminal in countries. However, a change is in the offing: Norway is the first country to enact a law against wage theft in January 2022. Earlier, in July 2021, the state of Victoria in Australia, made wage theft a crime.

Through Fight the Heist, the Asia Floor Wage Alliance has initiated a campaign Wage Forward. The Alliance is demanding that the brands “should pay an additional living wage contribution on every order they place. The living wage contribution will be paid by the brand to the supplier, and then will be distributed by the supplier, visible on the pay-slip, equally to all its workers”. It will be enforced through a legally binding agreement monitored by the signatories establishing independent third-party organisations for the purpose.

Any campaign at the workplace requires the collective agency of the workers. Only unions can take the struggle against wage theft forward. In this case, local factory owners and suppliers should be on the side of the workers as the living wage contribution will come from international brands and retailers and not their own pockets.

The writer is a researcher in the development sector.
zeenathisam2004@gmail.com

Published in Dawn, March 18th, 2023

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