Dark Money, Dirty War

Without unions to advocate for workers’ rights at the local level, employers are able to keep wages low and suppress worker self-organization with impunity. Workers’ rights advocates have documented abuses—such as wage theft, intimidation, and sexual harassment—being committed against immigrant and low-wage workers without fear of prosecution. Inequality is at its highest level since 1928⁵, and studies show that 95 percent of the financial gains made during the current recovery have gone to the top one percent of income earners.⁶

Into this breach has stepped small but vibrant constellation of low-wage and immigrant-worker organizations. This organizing resurgence features a variety of structures and approaches striving to ensure that workers’ voices are heard in public-policy debates on wages and employment practices. According to a recent briefing paper by United Workers Congress, a federation of such groups, “Worker centers [and other low-wage and immigrant worker advocates] have won changes in local policies and practices, built vocal and active membership, and raised public awareness of workers’ issues. These efforts have laid the groundwork for the recent spread of legislative efforts to protect the rights of workers not covered under existing labor law, and to raise the minimum wage for all workers.”⁷

Such organizing efforts have also drawn the attention of corporate wolves—PR flacks and conservative-leaning think tanks answering to the same business interests that are responsible for the decline of unions and other anti-poverty institutions. While some new worker organizations have endured and even thrived in the face of relentless attacks, their antagonists have generally hailed from the particular industry (restaurant, agribusiness, big box retail, etc.) or social sector (e.g. anti-immigrant movement) that they challenge.

In the court of public opinion, low-wage and immigrant worker organizing campaigns are gaining a reputation for being scrappy underdogs, standing up for the little guys. (More often than not, these “little guys” are actually women; a recent study from the National Women’s Law Center found that women represent almost two-thirds of minimum wage workers.⁸) But the business lobby is trying to use its megaphone to reverse that momentum. Groups like the U.S. Chamber of Commerce and the National Restaurant Association are taking advantage of low public awareness of new worker organizations to frame these loosely connected groups as part of the union “Goliath”—a familiar frame that allows corporations to repurpose decades of anti-union messages and tactics.⁹

Although the attacks are well-coordinated, there are opportunities for low-wage and immigrant worker organizing to respond strategically. The business community is trying to hit a field of small, moving targets with independent leadership. The strength of the field lies partly in its diversity—its networked strength rather than its deep pockets. The opposition is trying to homogenize a heterogeneous field of grassroots organizing in order to simplify, vilify, and attack it. The experienced operatives at the U.S. Chamber of Commerce refer to their chosen targets as “worker centers,” using the term to merge all organizing efforts—union and non-union, immigrant rights’ groups, domestic workers, food service and retail workers, day laborers, supply chain workers, and more— together into one single, seemingly formidable enemy.¹⁰

Wage Thieves

Attacks on worker organizing are taking place against a backdrop of an economy in crisis. A 2013 New York Times article, quoting a report by the Center for Budget and Policy Priorities, noted that the “median income for working-age households (headed by someone under age 65) slid 12.4 percent from 2000 to 2011, to $55,640. During that time the American economy grew more than 18 percent.”¹¹

As real wages stagnate or fall, consumers have less money to spend. In response, big corporations seek to preserve their profits in ways that further squeeze workers and their disposable income. This squeezing takes many forms: scheduling workers for fewer hours on the shop floor, spreading fear and anti-union propaganda, cutting back on benefits packages, and, perhaps most shockingly, committing outright wage theft.

Imagine being hired as a cashier at a big-box retailer and being told that you’ll make $8.81 per hour, the average wage of a Walmart cashier.¹² Imagine getting your meager paycheck and finding that it’s even less than you expected. Now imagine learning that the missing money isn’t being withheld by mistake. It’s being stolen by your employer. Such wage theft is pervasive across all U.S. industries, and the sums involved amount to much more than petty larceny.

“When we measure it,” Gordon Lafer, a political economist at the University of Oregon’s Labor Education & Research Center, recently told Moyers & Company, “the total amount of money stolen out of American workers’ paychecks every year is far bigger than the total amount stolen in all the bank robberies, gas station robberies, and convenience store robberies combined.”¹³

“It really has become for many industries the way they do business,” said Sally Dworak-Fisher, lead attorney in the Workplace Justice division at the Public Justice Center in Baltimore, Maryland. “By not paying overtime or paying less than the minimum wage, they are eroding the bedrock of labor protections in this country.”¹⁴

The phenomenon of wage theft is especially cynical given the amount of money that low-wage employees already produce for their employers: McDonald’s, for instance, makes an average per-employee revenue of $65,000, according to a report from the business blog “24/7 WallStreet,” derisively titled “The Companies with the Least Valuable Employees.”¹⁵

In an article for Alternet in 2013, Paul Buchheit wrote that “McDonald’s employs 440,000 workers worldwide, most of them food servers making the median hourly wage of $9.10 an hour or less, for a maximum of about $18,200 per year.”¹⁶ That $9.10 per hour McDonald’s employee is being paid less than one-third of what she earns for her employer in a year. Now she is also having those meager wages stolen, as the Labor Department found in at least two recent cases in New York and Pennsylvania.¹⁷

Wage theft is just one of a variety of weapons that private-sector businesses have deployed in order to cheat workers and maximize profits. Other tools include public policy instruments like so-called right to work laws that hamper union organizing; threats of deportation to keep unauthorized immigrant workers from asserting their rights; and lobbying to carve out loopholes in new worker-protection laws, among other devices.

For the past few years, in metro regions and states, workers and their communities have galvanized around the problem of wage theft, standing together to sue and win back money that rightfully belongs to the workers who earned it and the local communities where they spend their paychecks. Additionally, low-wage and immigrant workers are seeking relief from abusive and exploitative working conditions by expanding the laws that defend their interests—raising the minimum wage, creating stiffer penalties for wage theft, and instituting paid sick days and other basic workplace protections. Their grassroots organizing—sometimes, but not always, conducted in partnership with unions—has been effective, and a growing number of cities and states are passing these new laws.

Corporate interests are striking back with bills to pre-empt cities from passing their own minimum wage increases or to mandate paid sick days. These pre-emption bills are produced by right-wing bill mills like the American Legislative Exchange Council (ALEC) and pushed by state lawmakers who are often groomed for office by corporate lobby groups such as the U.S. Chamber of Commerce.¹⁸

The legislative attack is well underway. Eleven states, including Wisconsin, Florida, and Oklahoma have already passed state-level “pre-emption” laws banning cities and counties from mandating employer-provided paid sick days. At least six other states, according to the watchdog group Center for Media and Democracy, are currently considering similar pre-emption bills that would prohibit local governments from raising the minimum wage.¹⁹

Chamber of Horrors

When the Los Angeles-based Koreatown Immigrant Workers’ Alliance (KIWA) began urging city voters in 2012 to support a state bill that would allow workers to place a temporary lien on the business owner’s property if the business owner committed wage theft, KIWA’s members were excited. The bill would have allowed workers whose employers had stiffed them to place a lien—that is, a transfer of possession—on the employer’s property until workers received the back pay they were owed. A lien is a red flag for lenders and can become a PR problem for employers. “We see this lien as a tool to bring employers who are committing wage theft to the table,” said Alexandra Suh, KIWA’s executive director. “If there’s a lien on the table, they’re going to pay attention.”²⁰ One state—Maryland—passed a similar lien law that went into effect in October 2013.

Dworak-Fisher of the Public Justice Center said she expects that Maryland’s law will deter employers from committing wage theft. “We’re just getting it up and running,” she said. “We’ll be bringing wage lien claims over the summer and into the fall. The unscrupulous employers will be on notice.”²¹

As the California campaign gained steam, however, local politicians and business owners—some of whom were involved with KIWA projects in the community—started getting notifications from the California Chamber of Commerce. These Facebook ads, blog posts, and other advertising materials claimed that the anti-wage theft bill posed a danger to homeowners.

In one ad shared with PRA, the California Chamber falsely claimed that if the bill passed, it would mean that a third-party homeowner who had a contractor or cleaning service work in the home could wind up with a lien on the home. “Despite the fact that the third party homeowner had absolutely no control over the employee’s work or the wages he/she was paid,” read the statement from the California Chamber, “that homeowner could have his/her property leveraged for unpaid wages of the company’s employees.”²²

In reality, the bill explicitly prevents third-party liens, or liens from one company’s workers on a third party’s, or homeowner’s, property. Yet the Cal Chamber’s lie confused and frightened California homeowners. The anti-wage theft measure died in the state Senate in January 2014. When it was brought up again for a vote in the State Assembly on May 28 of this year, it passed by a vote of 43-27. It now moves back to the California Senate for a potential vote later this year.

The corporate smokescreen also obscures the widespread nature of the problem, which continues to be “very, very serious,” as Suh said.²³ Indeed, a 2010 UCLA-sponsored survey showed that the vast majority of workers are experiencing some type of wage-related violation on the job in Los Angeles County. “Low-wage workers in L.A. County frequently are paid below the minimum wage, not paid for overtime, work off the clock without pay, and have their meal breaks denied, interrupted, or shortened,” according to the report. “In fact, 88.5 per­cent of workers in the L.A. sample had experienced at least one type of pay-related workplace violation in the week of work before the survey.”²⁴

Lies, Smears, and Innuendo

The high-profile battle in California may have helped provoke an aggressive response from the national business lobby: the U.S. Chamber of Commerce. The Chamber’s Workforce Freedom Initiative (WFI) has released three faux-academic reports on low-wage worker organizing since last fall, starting with one in November 2013 that purported to expose a cabal of left-wing, foundation-funded, low-wage worker advocacy groups like KIWA.

The report presents a kind of historical analysis of how low-wage and immigrant worker organizations emerged; labels this highly diverse landscape of organizations “worker centers”; charges that they are “union front groups” that circumvent the many restrictions that tie the hands of unions; and maps foundation funding for the low-wage organizing sector (implying that foundations are as responsible as unions for its existence). The report fingers worker-advocacy groups of varying forms and sizes—from small worker centers such as KIWA to larger national organizing efforts like Restaurant Opportunities Centers United (ROC United) and Organization United for Respect at Walmart (OUR Walmart).²⁵

Each subsequent U.S. Chamber report builds on the insinuations and distortions of the previous ones. Common to all of them is an effort to redeploy the rhetoric and regulatory efforts developed over decades against unions to attack these varied immigrant and low-wage worker projects that, while generally small, have become among the most dynamic sites of the worker-organizing resurgence. The Chamber’s approach requires convincing the public, policy makers, and judges that so-called “worker centers” are more or less all the same—that they are functionally unions, trying to represent workers for the purposes of collective bargaining while evading the regulatory scrutiny and restrictions on their behavior and funding that unions must endure.

In reality, worker organizing groups use a variety of tactics to achieve their strategic goals: a community organization files a lawsuit to stop local police from using traffic stops to hand immigrant workers over to immigration authorities; a worker center holds workshops to train members to prevent wage theft; or a local domestic workers’ organization holds a rally to call for an end to deportations. In none of these cases is a worker organization “seek[ing] to negotiate with employers on behalf of employees,” as the WFI report asserts.²⁶

It is unsurprising that the corporate Right should want to fight on familiar ground. The loud “union front” accusation represents a clever bit of bait: an invitation for community groups to deny the charge of being unions (as if that were a bad thing) and thereby enter into a potentially endless cycle of defending themselves from that charge. In fact, the relationships between traditional unions and low-wage/immigrant worker organizing groups vary greatly: some have no working relationships with unions, some work occasionally and amicably with unions, and others engage with unions quite frequently and even openly aspire to become more union-like.

But the broad-brush labeling of “worker centers” could have potential legal and regulatory consequences, too. The U.S. Chamber is using its reports—plus attack ads, articles from right-wing think tanks such as the Manhattan Institute, and op-eds in major newspapers echoing similar refrains—to persuade the public and the government that all low-wage and immigrant worker organizing groups should be subjected to the same financial reporting and internal structuring requirements that unions face. They aim to impose severe restraints on charitable contributions and to limit or ban secondary boycotts (among other activities). If their opponents are successful, the low-wage worker sector—including groups with no active relationships with unions—could be hobbled.

The Chamber is not only recycling anti-union tactics. In one particularly revealing statement in its first report, author Jarol Manheim compares the loose network of worker centers to the anti-poverty network ACORN, which was targeted and ultimately broken apart by right-wing attacks in the mid-2000s. Manheim names a foundation (Needmor) that supports “organizing to achieve social justice, and was once a major contributor to ACORN chapters in several communities. Between 2009 and 2011, its grantees included, among others, the Koreatown Immigrant Workers Association (KIWA).”²⁷

This comparison of worker centers to ACORN may be a dogwhistle to business leaders that low-wage worker groups are vulnerable to the same take-down tactics, including pseudo-journalistic video exposés, congressional hearings, and public defunding. As Lee Fang pointed out in an April article in The Nation, the case of ACORN, which dissolved its national structure in 2010 in response to this onslaught, could be seen as a sort of cautionary tale for immigrant and low-wage worker organizing efforts: to avoid the same fate, they will need to recognize and strategically respond to this national threat.

Chamber of Secrets

The U.S. Chamber of Commerce’s stated mission is “representing the interests of more than 3 million businesses of all sizes, sectors, and regions,” but watchdog groups say the U.S. Chamber represents the interests of a select few big industry groups that want to crush worker organizing.²⁸ In some states, where the local Chamber of Commerce and local business leaders tend to operate from the same playbook as the U.S. Chamber, anti-worker campaigns tend to proliferate. The California Chamber of Commerce, for example, has been actively lobbying to prevent the state legislature from passing a bill that would help to prevent wage theft. Watchdog groups such as ChamberWatch have had some success in persuading smaller Chambers of Commerce and even a few big corporations to leave and/or denounce the U.S. Chamber for its history of opposition to any regulation of corporate behavior, including environmental and safety regulations.²⁹

But identifying who is—and isn’t—part of the U.S. Chamber can be a challenge. Unlike many local Chambers of Commerce, the U.S. Chamber keeps its member and donor lists secret. Despite its claim to represent three million businesses, watchdog groups have documented that its actual membership hovers around 300,000. What’s more, local chambers of commerce have publicly denounced or left the U.S. Chamber by the dozens in recent years. U.S. ChamberWatch reported that nearly 60 Chambers have done so since 2009. Though it does not disclose its donors, OpenSecrets has been able to track major donations to the U.S. Chamber from industry groups such as the American Petroleum Institute, the Associated General Contractors of America, and the Freedom Partners Chamber of Commerce, itself a hard-line, right-wing business association.³⁰

These and other industry groups are funding a broader, coordinated push to preserve the low wages and exploitative working conditions that now characterize many industries. Their targets include groups such as ROC United, which is a national network of worker centers that is challenging the American model of low-wage service sector employment.

ROC United “really carefully looked at the restaurant industry and thought about what it would take to improve wages and working conditions and standards,” said Janice Fine, a scholar of labor studies and worker centers at Rutgers University. “They are doing a number of interesting innovative things.”³¹ These include surveys of restaurant workers to find out what their wages and working conditions actually are; a code of conduct that employers can adopt to take the “high road” and treat workers better; picketing bad-actor employers; and promoting “high road” employers to socially-conscious diners.

For their efforts, ROC United has been subjected to consistent and intense attacks from industry, and has fought back doubly hard. A January 16 New York Times article exposed the restaurant industry’s PR campaign against ROC: “A prominent Washington lobbyist, Richard Berman, has run full-page ads attacking the Restaurant Opportunities Center, accusing it of intimidating opponents,” according to the piece. “He has even set up a separate website, ROCexposed.com, to attack the group.”³² Restaurant owners have also filed frivolous lawsuits against ROC, aiming to force ROC to spend money and time fighting in court instead of organizing.

In one 2005 case involving ROC’s New York chapter, reports the National Employment Law Project (NELP), “Three restaurants filed a charge with the National Labor Relations Board claiming that ROC-NY’s activities made it a labor organization subject to the National Labor Relations Act. If ROC-NY were subject to the Act, it would also be subject to a series of requirements… and potentially jeopardize its tax exempt status. The restaurants said that ROC-NY’s filing of litigation, and seeking settlements that provided for improvements in working conditions…, such as promotion policies or language access policies, made ROC a labor union.”³³ Such lawsuits are another attempt to shut down new worker formations by calling them unions and seeking to restrict their activities accordingly.

“It’s a sign of their effectiveness,” Fine said.³⁴ And, indeed, the workers’ groups are winning in court. The National Guestworkers Alliance, a network that advocates for guestworkers who are brought in from other countries to work for a specific employer, won more than $200,000 in back wages and damages for a group of McDonald’s employees who had been forced to live in a manager’s basement and were paid sub-minimum wages and denied overtime. ROC United, according to an issue brief from the United Workers Congress, also has had a significant track record of court victories on behalf of workers: “The Restaurant Opportunities Center has won 18 campaigns against exploitation in large, high-profile restaurant corporations that resulted in higher wages and better benefits for these workers, as well as $9 million in recouped wages.”³⁵

Even if these numbers don’t significantly affect the bottom line of mega-corporations such as Walmart or Darden Restaurants (which owns the Red Lobster and Olive Garden chains), Fine said, the undeniable power of workers winning back their rightfully earned wages is pulling public opinion over to the workers’ side. “Before, they might have been irritants, but not enough to raise the ire of big, corporate dark-money groups like the National Restaurant Association and the U.S. Chamber of Commerce.”³⁶

Another approach that worker organizers have taken, following the U.S. Supreme Court’s 2002 Hoffman Plastic decision—which stripped undocumented immigrants of the right to win any back pay that is withheld during a unionization campaign—is to seek relief from workplace abuses under international human rights law. The Hoffman decision has had real consequences for workers trying to organize themselves into unions to combat wage theft and other abuses. “Workers have abandoned trade union organizing campaigns because of the fear instilled by the Hoffman decision,” wrote Human Rights Watch in a 2005 report on human rights violations in the meat-processing industry.³⁷

In addition to the attacks from the corporate sector, some worker organizing efforts have been under constant assault from nativist anti-immigrant groups. These include groups like FAIR, JudicialWatch, and NumbersUSA. Other vectors of attack have come from cultural conservatives such as the American Life League, which has used smear tactics to pressure faith communities and congregations into withdrawing their support for the Interfaith Worker Justice coalition of worker centers.

A Gathering Storm

If halting low-wage and immigrant worker organizing efforts is the goal, then it appears corporations and industry groups are testing out a variety of strategic models for achieving this goal.

Previous attacks have generally targeted specific worker centers or specific organizing campaigns through legal strategies or PR campaigns. The pattern of recent attacks against new worker organizations suggests not only a growing frequency and intensity but also a kind of nationalization of the attacks. The flurry of op-eds, attack videos, legal briefs, and state legislative interventions draw on a broad range of right-wing infrastructure and tactics (see PRA’s related timeline of attacks on low-wage workers).

One example is the U.S. Chamber of Commerce’s recent series of reports purporting to “expose” worker centers as being well-funded efforts to unionize low-wage workers.

So far, it appears that the organized opposition to the resurgence in low-wage and immigrant worker organizing has not landed on the kind of PR, legal, and policy package (e.g. “right-to-work,” “paycheck protection,” anti-public employee collective bargaining) that has proven devastating to unions and other anti-poverty groups such as ACORN. But the Chamber, NRA, and others are moving aggressively to box in and take down any challengers to their corporate dominance.

Meanwhile, big businesses are finding that former campaign managers for Mitt Romney and other GOP candidates are willing to act as PR attack dogs to spread rumors that worker centers are corrupt, or “commies,” or fronts for unions. “Picking fights with restaurant workers has been good business for out-of-work GOP operatives,” writes Lee Fang in a recent article in the Nation.³⁸

And so the battle is joined. The U.S. Chamber of Commerce’s Workforce Freedom Initiative is staffed with lobbyists who, along with consultants like Kefauver, visit local and state-based industry associations, presenting worker centers as a threat to business. Meantime, members of Congress use their subpoena power on Capitol Hill to advance the anti-worker organizing cause.

In September 2013, Reps. Phil Roe and John Kline, two Republican House committee and subcommittee chairs, convened a hearing of the House Subcommittee on Health, Employment, Labor and Pensions titled “The Future of Union Organizing,” which featured speakers from lobbying groups claiming to represent small business owners, as well as anti-union lawyers. Speakers called on Congress to subject worker centers to same restrictions as unions.

Earlier in the summer, Roe and Kline had also penned a letter to Labor Secretary Tom Perez, requesting that he designate six specific worker centers as labor organizations under the Labor Management Reporting and Disclosure Act (LMRDA). Perez refused; but had he fulfilled their request, legal experts say it could have resulted in worker-organizing groups losing the right to picket bad-actor employers, loss of their tax exempt status, and other restrictions.

And should additional industry groups and big companies decide to join the U.S. Chamber’s campaign to squash worker organizing, recent events have made it clear they will find eager friends in high places. At that April 16 U.S. Chamber event hosted by staff at the Workforce Freedom Initiative, the chief of staff for Steve King (R-IA), a right-wing representative who carries the flag for anti-immigrant groups, took the microphone during the Q&A period. He asked a question that low-wage worker organizations and the foundations that fund them might view as a chilling signal that the recent wave of attacks may be mere prologue to an intensified onslaught. “Is there something on Capitol Hill,” the Congressional aide asked the panel of industry lobbyists and lawyers, “we could be doing?”³⁹