Wage theft, or an employer’s failure to pay a worker for completed labor, has emerged as a serious danger in the 21st century labor market.  According to a 2011 report by the National Employment Law Project (NELP), wage theft is widespread. It is not limited to a specific industry or employer, and it is frequently deliberate.  It can take many forms, including “being paid less than the minimum wage, working off the clock without pay, getting less than time and a half for overtime hours, having tips stolen, and seeing illegal deductions taken out of paychecks.”

Despite basic protections guaranteed to workers by minimum wage and overtime laws, waning resources for enforcement make these protections inadequate.  Ever-changing forms of employment, including outsourcing to subcontractors and classifying workers as independent contractors, have moved growing numbers outside the protection of the law. All workers are at risk, but the most vulnerable groups are women, immigrants, and people of color.

The Fair Labor Standards Act establishes a nationwide minimum wage floor of $7.25 an hour, as well as record-keeping requirements and child-labor protections.  States are not allowed to weaken federal standards, but they may enact stronger standards or cover more workers.  Minimum wage has been set higher than the federal level in 17 states and the District of Columbia. Nine states provide for automatic minimum wage increases to keep pace with inflation, so its buying power does not go down every year. Oklahoma is not one of those states.

Even if we don’t increase the minimum wage above federal levels, we should make sure that it is enforced. The National Employment Law Project outlines the importance of enacting additional wage theft policies at the state and municipal level, such as:

raising the cost to employers for violating the law; making government agencies effective enforcers of the law; providing better worker protection from retaliation; ensuring workers are paid for all hours worked; ending exclusions in minimum wage and overtimes laws; putting an end to independent contractor misclassification and holding subcontracting employers accountable; and guaranteeing that workers can collect from their employers.

One troubling gap is that Oklahoma denies minimum wage and overtime protections to domestic workers, a category that lumps in teenage babysitters with full-time home health care aides. Comprehensive protections for all workers in the state, and especially for vulnerable groups, are critical to make sure workers are paid what they deserve.

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After completing his sentence two years ago, Linder moved to Pawnee with his wife. He bought a local restaurant, volunteered with the Chamber of Commerce and as a baseball coach, and joined the First Baptist Church. He was elected mayor in April, beating out the incumbent and another former mayor. The felony became public during the campaign, but a plurality of voters believed he was the right person to lead the city anyway.

What they didn’t know was that Oklahoma law prohibits anyone convicted of a felony from holding a public office for 15 years after their sentence is completed. Linder applied for a pardon after learning about the law, but Arizona turned him down.

The problem is not unique to public officials. Oklahoma law puts up barriers to ex-felons pursuing a long list of professions, even when the job has no connection to their crime. Professions requiring a state license in Oklahoma include cosmetologists, funeral directors, athletic trainers, pawnbrokers, and marital and family therapists, among others. For all of these, a state-appointed board can deny a license to anyone with a felony conviction, regardless of what their crime was or how long ago it was committed.

Senator Harry Coates (R-Seminole) sponsored a bill last year that would have changed the restriction to only apply if the crime “substantially relates to the practice” of the profession or poses a reasonable threat to public safety. It was initially approved in both the House and Senate but in the end not taken up by the House Conference Committee.

Even for jobs not restricted by the state, the situation is little better. An investigation by the National Employment Law Project found numerous companies applying blanket exclusions against workers with a criminal history.

Oklahomans are especially affected since our state has one of the highest incarceration rates in the nation, and 8.5 percent of all Oklahomans have a felony conviction. Rev. Tony Zahn, executive director of the The Education and Employment Ministry (TEEM),  said the need for jobs among ex-felons is so great that even felon-friendly employers “don’t necessarily like to be included on a felon-friendly list,” because they will be inundated with applicants.

This is counterproductive for several reasons. First, if a person commits a crime and completes their full sentence, we should want them to find a way to support themselves and rejoin society. They will be less likely to re-offend and more able to contribute their talents to the economy. Just as it is undemocratic to not allow the voters of Pawnee their choice for mayor, it is contrary to free markets to prevent a qualified person who is not a threat to public safety from taking a job.

It is also counter to a rational justice system, where punishments should fit the crime. A blanket prohibition makes no distinction between someone sentenced to three years or thirty. As Julie DelCour wrote in The Tulsa World, “is it fair to exclude an applicant from being hired to work, say, the airline ticket counter because he or she was convicted of shoplifting at 18?”

We made good progress this year with some initial corrections reforms, and House Speaker Kris Steele says that “this is only the first step.” As we consider those next steps, giving ex-felons a fair chance at decent jobs should be high on the list.

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“There’s no excuse for states to let 100 percent federally funded jobless support just die on the vine,” said Christine Owens, Executive Director of the National Employment Law Project. ”This is a no-brainer for states to help their workers, businesses and economies.”

The no-brainer Owens refers to is an unemployment insurance extension known as Extended Benefits approved by Congress and waiting to be used by states.

Oklahoma is one of 9 qualifying states – along with Arkansas, Iowa, Louisiana, Maryland, Mississippi, Montana, Utah and Wyoming —that has not taken advantage of the Extended Benefits provision that NELP estimates would provide 13 additional weeks of assistance for over 29,000 long-term unemployed Oklahomans and inject $101 million in federally-funded benefits to help support Oklahoma families and businesses.

A defining feature of the Great Recession has been the large number of people who have been out of  work for very long stretches through no fault of their own. The national unemployment rate has now been above 6.5 percent since October 2008, while Oklahoma’s unemployment rate has topped 6.5 percent since May 2009.  As the Economist noted in December:

For much of this population, weekly Unemployment Insurance (UI) benefits have been the thin net keeping them and their families from plunging into full financial chaos.

The Oklahoma Employment Security Commission, the state agency that administers the UI program, officially declined to comment on this subject but has so far not pushed for legislation that would allow Oklahoma to qualify for Extended Benefits. The Legislature could still take action this session to ensure that workers who are exhausting benefits without finding new jobs will qualify for the additional help. Even if, as hoped and expected, job growth picks up over the coming year, high levels of unemployment are likely to persist for the foreseeable future in Oklahoma and across the nation. Making Unemployment Insurance benefits available to the long-term jobless population for an additional 13 weeks is the right thing for Oklahoma to do.

Update:  For an update on these Unemployment Insurance benefits, see Where Are They Now? Bills we kept our eye on

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For many of these jobless workers and their families, weekly Unemployment Insurance (UI) benefits provide an essential safety net allowing them to recoup a portion of their lost income – about $290 per week on average – and  pay the bills without additional public support or a full-blown financial emergency. As in past national recessions, Congress has responded to high levels of unemployment by approving federally-funded extensions of UI benefits that go beyond the basic 26 weeks of state-funded benefits. Under the main temporary program of federal jobless benefits, called Emergency Unemployment Compensation (EUC),  qualified unemployed workers who are actively seeking work receive an additional 34 to 53 weeks of UI benefits, depending on the state’s unemployment rate. NELP reports that so far, in 2010 alone, nearly 9.5 million workers collected federally funded benefits, contributing an estimated $68 billion to the nation’s economy.

However, unless the returning Congress takes action soon, temporary federal UI benefits are set to expire on November 30th. The expiration of benefits would affect unemployed workers in two ways: those currently receiving federal benefits would be cut off as soon as they reach the end of their current benefit tier, and those reaching the end of their 26 weeks of basic state benefits would become ineligible for an extension. NELP calculates that in Oklahoma, 7,590 long-term unemployed workers will be affected in December by the termination of federal benefits: 4,060 who will lose EUC benefits they are currently receiving and an additional 3,533 who are expected to reach the end of their state benefits at the 26-week cut-off.

The National Employment Law Project points out that allowing cutting off extended UI benefits with unemployment at such high levels would be unprecedented:

Never in the history of the program have unemployment benefits been eliminated, or even reduced, when unemployment rates were so high. The only other time in the past 60 years that the unemployment rate has remained so high for so long was during the early 1980s. At that time, Congress did not cut federal unemployment benefits until the national unemployment rate had fallen to 7.2 percent—a far cry from our current rate of 9.6 percent.

The impact of losing benefits would be felt over the coming holidays not only by workers and their families but by the retail sales industry, grocery stores, utility companies, lenders, and others in the private sector whose customers would be even more severely pinched. The overall loss to the economy would be approximately $6.8 billion each month.  And as more people lose federal benefits, the impact would be felt both by community-based safety net providers and by our financially-squeezed state government, as more of the unemployed turn to TANF cash assistance, Medicaid, and other state-supported services.

The outgoing Congress has only a few days left  in session in which to approve an extension of UI benefits before the program expires. Preventing increased hardship for thousands of Oklahoma families who are struggling with long-term joblessness should be the very top priority for Oklahoma’s Congressional delegation in the days ahead.

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The most striking and challenging numbers concern the continued rise in the number of unemployed. Oklahoma’s seasonally-adjusted unemployment rate in August reached 6.8 percent. That is still substantially below August’s national rate of 9.7 percent, but represents an increase of 2.9 percentage points compared to August 2008. Oklahoma’s unemployment rate is now at its highest level since January 1988, when the state was at the tail end of its long post-oil boom economic slide.  The number of Oklahomans officially designated as unemployed hit 117,600 in August, a 75 percent jump from the same month last year. Meanwhile, some 47,000 Oklahomans received continuing Unemployment Insurance (UI) benefits on average each week in August, a number two and one half times that of a year prior.

As the national recession drags on, increasing attention is focusing on the problem of workers experiencing long-term unemployment. A recent report from the National Employment Law Project (NELP) found that a total of 6 million Americans have been unemployed for 6 months or more, an all-time record since data started being recorded in 1948. An unprecedented one in three unemployed workers has been out of work for 6 months or more.  NELP has also found that since December 2008, the number of jobless workers who find themselves unemployed for at least six months has increased three times as fast as joblessness overall.

The ballooning numbers of long-term unemployed has given increased urgency to implementing a further extension of Unemployment Insurance benefits. For those who qualify for benefits, weekly UI payments provide a vital source of financial support helping to keep families afloat and reducing the pressures on public assistance programs, such as food stamps, and private safety net providers.  Back in February, Congress approved a 13-week UI extension as part of the American Recovery and Reinvestment Act. However, NELP estimates that by December, over 1.3 million of the long-term unemployed are at risk of exhausting their unemployment benefits. This includes just under 6,000 Oklahomans.

Last week, Senate leadership introduced a measure that would extend UI benefits by 14 weeks in all states, along with an additional 6 weeks for long-term unemployed workers in states with the highest unemployment rates. Even as increasing indications emerge of an economic recovery, unemployment is expected to remain at high rates for a long time to come.  Maintaining access to unemployment benefits will not solve the nation’s job challenge but will provide vital support to cushion the blow of joblessness for hard-hit families and communities. We hope Oklahoma’s Congressional delegation will join in supporting the Senate extension of UI benefits and that Congress will take quick action to get the bill passed.

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Across the nation, the deep, prolonged economic recession is putting great strains on state Unemployment Insurance (UI) programs. Oklahoma is hardly immune from these challenges, but our problems are less severe than elsewhere. The combination of having entered the recession with our UI program in good fiscal health, the relative mildness of the downturn in Oklahoma, and the Legislature’s willingness to do what needed to be done to get the boost of available federal stimulus dollars should help  allow the state’s UI program to continue to provide a temporary source of income until employment prospects improve.

As everyone knows, the June jobs report was brutal – the nation lost an additional 467,000 jobs, the unemployment rate reached 9.5 percent, and the total number of unemployed Americans hit 14.7 million, an all-time high. State-level figures for June have not yet been released, but May did bring relatively good news for Oklahoma, as the state’s 0.1 percent increase in the unemployment rate (from 6.2 percent to 6.3 percent) was far less severe than in prior months or in the nation as a whole. Still, the state saw its number of unemployed hit 111,700 for the month, an increase of nearly 50,000 compared to a year prior. The unemployment rate has now topped 7.5 percent in 19 counties, led by Hughes County, whose jobless rate reached 10.9 percent in May. The number of Oklahomans claiming Unemployment Insurance (UI) benefits rose to just under 50,000 in May, a 208 percent increase compared to May 2008. Almost 10,000 long-term unemployed workers in the state who have already exhausted their initial period of UI eligibility have now become eligible for an additional 13 weeks of benefits.

Such developments are putting enormous stress on state unemployment insurance systems. Every state has an Unemployment Insurance Trust Fund which collects revenues and pays out benefits. When fewer workers are employed, states pay out more in benefits while taking in less in UI tax collections. Yet while Oklahoma’s Trust Fund balance has declined over the past year, we are in a much stronger situation than most states.

According to a study by the National Employment Law Project, the UI Trust Funds in eight states had already reached insolvency by the end of 2008, while another 16 states faced certain or serious risks of insolvency over the course of 2009-10, leaving them dependent on federal loans to continue operating their UI programs. By contrast, Oklahoma entered the downturn with our UI Trust Fund in excellent shape. At the end of 2008, our Trust Fund had reserves equivalent to 51.5 months of average monthly benefits, the third strongest situation in the nation.

At its peak in August 2008, before the first onset of the economic downturn, the balance in Oklahoma’s UI Trust Fund was $863.3 million. At the end of June, it had fallen to $717.0 million, a decline of $145.6 million. The drop in the Trust Fund’s balance would have been much more precipitous but for the injection in June of $75.8 million as part of the federal stimulus package.  Oklahoma became eligible for these new federal dollars as a result of the Legislature having approved some minor reforms to the state’s UI program that make more formerly part-time and low-income workers eligible for benefits (see our Issue Brief on the subject and one from the National Employment Law Project on what other states have done).

The expansion of unemployed benefits to additional laid-off workers during the downturn is not the only advantage of having adopted these reforms. More significantly, perhaps, by propping up the Trust Fund balance, the $76 million in new federal dollars are expected to avert an automatic trigger, known as conditional factors, that would have increased UI taxes on businesses and reduced UI benefits for the unemployed beginning in 2010. Such a situation would have impacted businesses and laid-off workers at precisely the time when they are already facing economic hardships.

There remain chronic weaknesses with the UI program: its benefits levels fall far short of replacing lost income, many people risk exhausting eligibility before finding work, and for various reasons, a majority of the unemployed, including some 60 percent of  unemployed Oklahomans, do not qualify for UI in the first place. However, for Oklahomans who do qualify, the  health of the state’s UI Trust Fund will be one less thing to worry about.

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