Call it the "shadow economy" or ”cash under the table economy”, or wage theft, we are all familiar with working for less than minimum wage or getting screwed by your company that results in having your wages reduced.
I am not talking about people who are legally screwed by our government; "tipped employees." They are a class of employee for which the standard Federal minimum wage does not apply. Instead, employers must pay a tipped employee at least $2.13 an hour. However, the law also states that if an employee's wage plus that employee's tips do not equal at least the standard minimum wage (currently $5.85 nationally, higher in some states), the employer must make up the difference – fat chance of that happening.
Therefore, it is never correct to state that "waitresses make less than minimum wage." No, they don't. Their normal hourly wage may in fact be less than minimum wage, but the amount of money they earn from wages and tips will always be at least minimum wage (or if not, the employer is breaking the law or sometime the waitress is breaking the law by reporting less). Nationwide, more than 5 million employees work in occupations where tips are common, including taxi drivers, food and beverage servers, hotel porters and housekeepers, manicurists, and hair stylists, to name a few.
I am also not talking about the companies that decided you are an “exempt” employee and as such not entitled to overtime but they expect you to work sixty-to- eighty- hours a week, thirty of which are spent doing the work of the hourly person they laid off. Nor those companies who hire people in as “Independent Contractors” knowing full well they are paying them less then minimum wage and they don’t meet the requirements of “Independent contractors.” Nor those “Intern” jobs, Nor even those jobs in which you are expected to “clock out” after your shift and then stay around to clean up.
The ones I am hearing more about are those workers who are taking jobs that pay less than minimum wage but are paid in cash. I am sure some of you have worked them as a second job – that situation where some small employer offers you five dollars an hour or some fixed amount per day, in cash, to work for them. Call it the "shadow economy" or the underground economy. Pick an adjective, any adjective: informal, gray, black market, under-the-table, hidden, unobserved. There are many different names for the realm where taxes aren't paid, labor laws are ignored, and cash is king. The underground economy has always existed. It use to appeal to old people who were supplementing their retirement or teenagers who could not find a job elsewhere, maybe even a wife whose kids had gone to school and she could work for four or five hours a day.
I am hearing more of these types of jobs coming into play. This time they are not being filled by old people or teenagers but a workforce that cannot find a job anywhere so they fall back into the shadow world of less than minimum pay jobs. Some may be drawing unemployment benefits but there are number of them that have been dropped from receiving additional unemployment benefits.
You can find them where small employers have two or three people working for them. Convenience stores, flea markets, motels, snack shops, courier services, cleaning services – Ocean City is full of them, but also every town on Delmarva has them.
You might think they are unskilled or lack education but none of those two criteria apply. You might say well these people like that kind of work - seriously do you think someone likes working for that amount of money? The shadow economy is where people end up after having been downsized or forced out of their homes or displaced by globalization and greed. But do you really think they can live on $5 an hour any better then minimum wage per hour or unemployment? Why do you think the crime rate involving stealing of scrap metal and everything else is up?
The people who should be taking steps to correct the job situation can’t agree among themselves (Congress) but still you vote the same people back into office. Maybe one day when you take a job for less than minimum wage and you are thankful for even that you will finally do something about it.
In Howard's informal survey of people who were willing to talk I can say the cash and working for less than minimum wage is up - way up, higher than I have observed it in the past.