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Wage Theft vs. Shoplifting: Guess Who Goes to Jail?

If you want to get a light penalty for committing a crime, you’re better off cheating employees of their earned wages than stealing a pair of designer shoes or the latest electronics off the shelf at your local retailer. That’s what a recent report shows in the Demos research brief, The Steal.

The research study looks at how the American justice system is biased in favor of power and privilege, giving much more leniency to crimes of powerful and wealthy individuals (like stealing from employees’ paychecks) than crimes more typical of those with less power, like shoplifting.

Using data from a comprehensive new study of minimum wage violations by David Cooper at the Economic Policy Institute, the Demos brief compares the monetary value of shoplifting with the total amount of minimum wage violations, and shows that they are roughly comparable. Between 2013 and 2015, businesses lost about $14.7 billion to shoplifting every year, while employers stole an estimated $15 billion through one form of wage theft alone: paying workers at rates lower than the legal minimum wage.

Minimum wage violations and shoplifting are crimes of similar scale. But the similarities end there. Regardless of the serious consequences of wage theft — including harm to working Americans and their families, keeping hundreds of thousands of people stuck in poverty, cheating states and cities out of important tax revenue, and putting law-abiding businesses at a competitive disadvantage — studies show that significantly more resources are dedicated to deterring and catching shoplifter than preventing wage theft.

When wage thieves are found guilty, they also face vastly different consequence in comparison to shoplifters. A shoplifter who steals more than $2,500 in merchandise can face felony charges in any state in the U.S. Many states impose felony charges for stealing much less valuable merchandise. But criminal penalties of any kind are exceedingly rare for those guilty of wage theft. Even when they steal millions of dollars from employee paychecks, they face only mild civil penalties under federal law.

The result is unsurprising: unprincipled employers see that the reward of stealing wages outweighs the risk of a slap on the wrist for getting caught. And so not only are many large corporations serial violators of wage laws; many even continue to be awarded lucrative federal contracts after being penalized.

The gap between crimes of the powerful and those with less power is intimately linked to who the victims and perceived perpetrators are. Women, people of color, and immigrants — especially undocumented workers — are disproportionately among the victims of wage theft. And these violations often have much greater impacts since fewer resources are devoted to deterrence, investigation, and enforcement compared to shoplifting. Also, the punishment itself is typically. In contrast, despite the fact that shoplifting is done by people of all races and ethnicities, it is overwhelmingly people of color — and above all African Americans — who are profiled as shoplifter suspects, exacerbating racial and ethnic disparities across the criminal justice system.

Efforts to develop a more just future need to focus on both sides of the picture. Our society must eradicate retail profiling and bias in the criminal justice system, but there’s also much to do in the realm of deterring and penalizing the crimes of the powerful — including wage theft.

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Emery Reddy