MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT
As reported over and over again on BuzzFlash at Truthout, worker wages have essentially remained stagnant - when adjusted for inflation - over more than two decades, while the top 1% have increased their share of the newly growing economy by 95%.
On top of that, many of those who have become unemployed due to the recession caused by banks too big to fail, must now work at miniminum wages jobs - if they are lucky enough to find employment.
Furthermore, it appears businesses and banks are continually coming up with new ways to reduce take home pay - whether it is paying for uniforms and equipment needed on the job or replacing permanent workers with part-time ones or temps. For a few years now, in addition, there has been a growing trend to pay workers not with checks or direct deposits to their banks, but essentially with what are commonly known as gift cards (but are more generally, in essence, pre-loaded electronic transaction cards).
Of course, while a few companies don't charge extra fees, many do. The businesses save by not cutting checks, but as with many gift cards, the workers are saddled with paying per transaction and other fees to use their own money because of costs levied on the utilization of electronic pay cards.
The banks love it, because they get a cut of the "swipe" fee or charge for withdrawing money via an atm when the payroll card is used. It is another way of fleecing workers, many of them who will use their electronic pay cards to help pay off debt necessitated by receiving such low salaries -- and now they have to pay fees to pay off loans.
The Chicago Tribune ran an article about this latest gouging of workers by companies and banks on April 13, covering pending legislation in Illinois:
Nationwide, an increasing number of employers, especially those in low-wage industries like retail and fast food and including companies like McDonald's and Wal-Mart, are turning to payroll cardsin lieu of paychecks. Businesses prefer the cards because they save $2.75 each time they electronically load the card instead of cutting a check, according to Aite Group, a Boston-based research and consulting firm.
But workers say using the cards means getting socked with fees, including some that aren't disclosed, for everything from accessing their money to checking balances. Some workers have quickly run up fees of several hundred dollars over a year's time.
"(The cards) make someone who is already financially vulnerable even more vulnerable," said Lucy Mullany, a senior policy associate at Heartland Alliance, a Chicago-based nonprofit seeking to reduce poverty.
The office of Illinois Attorney General Lisa Madigan, which found that fees on payroll cards range from 50 cents to $5, is pushing the General Assembly to pass a law that would limit fees and add protections for workers.
"We don't want people to have to pay to get their pay," said Assistant Attorney General Erik Jones.
Other states are also considering reducing, but not necessarily containing, fees on the new payroll cards. Action, however, is imperative to restore the integrity of the pay a worker receives for his or her labor.
"In fact, in Illinois, currently the amount that you receive on a gift card has better protections than the wages that you would receive on a payroll card," [Illinois State Attorney General Lisa] Madigan said.
Of course there are strong forces profiting off of the reduce net pay to workers by compensating them with electronic cards. "Illinois Bankers Association said it is opposed to regulating payroll cards but declined to elaborate," the Tribune reported. That's because banks will make money by getting transaction fees that come out the pay of employees. Businesses save by reducing the costs of cutting checks -- and one can only speculate highly favorable contracts from the pay card vendors and financial institituions.
Legislation in many states is aimed at actually increasing the ability of employers and banks to take bites out of salaries through the cards. For instance, on March 31, The Florida Current reported: "Legislation allowing employers using worker pools hiring day laborers to pay their workers using debit cards or electronic transfers passed through the Senate Commerce and Tourism Committee on Monday by a unanimous vote."
As electronic payments become more and more prevalent, it is true that checks and cash will become used less by everyone. However, the reality is that electronic payments cost banks and stores, in particular, less to process than checks. In fact, we were sold ATM machines on how they would be free and reduce teller and check processing costs -- and withing a few years banks started imposing a relatively high per transaction fee if you used an ATM that was not from your bank.
If the ATM experience is a precedent, expect the pay card electronic transaction fees to get worse not better, despite some current legislation in some states to provide payment options and reduce fees.
The US worker is a walking target for predatory gouging and lower salaries.
The electronic transaction card treats hard-earned pay as a gift card (with all the fees and restrictions you read on the back of most gift cards). An earned salary should not be payable with essentially a gift card that reduces income, however paltry it might be.
A day's work deserves a day wages, not a banks too big to fail shakedown -- with the collusion of the Chamber of Commerce.
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