Wage theft! A recent report by ProPublica and NPR well documents a new form of wage theft being carried out the major banks and corporate creditors.
One in ten workers age 35 to 44 had their wages garnished for consumer debt last year. The most affected workers were those who make between $25,000 and 40,000 a year (in other words some of the workers LEAST able to afford it).
It’s not hard to guess when this phenomenon began to heat up. The Great Recession. That’s right. The banks, in a classic tale of the heady capitalist rush to make ever-greater profits, expanded the credit market so people could buy more homes. They chopped up mortgages and created new so-called financial tools, all with the expressed purpose of making a greater rate of profit.
And it blew up in their faces—the speculation brought on a huge bust, what we call the Great Recession. It was their fault. Workers didn’t cause that bust. The owners of the banks and corporations and their minions caused it. Then the government that represents their interests bailed some of them out—not all of them but a good section of them—with PUBLIC money, with our money.
Now, workers are seeing their wages taken from them at exorbitant rates for debt—credit cards and student loans mostly but also medical debt. And this process has spiked in the last ten years, during the Great Recession.
The blame our society heaps on people with debt—despite the fact that this describes a majority of the population—is intense. We are taught and the words are written in the media and elsewhere so that we perceive people struggling with personal debt or having their wages garnished as having been irresponsible or done something wrong. It can be easy to read the news or hear the stories and blame the person.
But this is entirely the opposite of reality. The numbers on wage garnishment shape a story of regular people who tried to get an education, of people who tried to stay afloat during years when millions lost their jobs and homes and healthcare but still had families and themselves to take care of.
Now the credit companies are punishing them. High interest rates mean the amount owed just rises and rises. For personal debt, the companies take people to court and bamboozle them. They hire expensive lawyers who railroad and confuse people, most of whom have no representation whatsoever. According to the ProPublica article, the “most common outcome of a debt collection lawsuit in Missouri (and any other state) is a judgment by default.” For student loan collection, they don’t even have to go to court. They just appeal to their friends, the federal government.
These corporations aren’t taking tiny amounts. They often take as much as 25 percent of a worker’s monthly pay. Imagine trying to live on your income cut by a quarter—it’s hard to imagine. For those already making difficult choices between medical bills, education and more, it’s utterly devastating. For all workers, it’s a severe blow. That’s just wrong.
In a just world, there would be an immediate moratorium on debt payment for working people. In a just world, being healthy, taking care of your kids and getting an education wouldn’t mean racking up debt so that the creditors can steal it from your wages later on.
