September 2014

TABLE OF CONTENTS
ABOUT THIS REPORT................................................................................................................. 2
ACKNOWLEDGEMENTS .............................................................................................................. 2
EXECUTIVE SUMMARY ............................................................................................................... 4
Findings .................................................................................................................................. 4
Recommendations .................................................................................................................. 4
INTRODUCTION.......................................................................................................................... 5
DEFINITIONS AND TRENDS ........................................................................................................ 6
METHODOLOGY ......................................................................................................................... 7
Survey Design ......................................................................................................................... 7
Formulation of Questions ....................................................................................................... 7
Defining the Survey Population .............................................................................................. 8
Criteria for Study ................................................................................................................ 8
Sampling Methodology ............................................................................................................ 9
Limitations ............................................................................................................................10
RESULTS ...................................................................................................................................10
Respondent Characteristics ...................................................................................................10
Findings .................................................................................................................................12
CONCLUSION ............................................................................................................................16
Significance ...........................................................................................................................17
Next Steps and Recommendations ........................................................................................18

1

ABOUT THIS REPORT
This report documents the challenges facing low-wage workers who live in Chicago's 10th Ward.
Southeast Chicago's local economy heavily relied on the steel mills and other heavy industrial production
for employment. Decrease of manufacturing jobs reduced the availability of jobs with living wages and
collective bargaining, the traditional protection against labor violations and wage theft. The rise of
employment in service and retail industries brought rises of wage theft and other violations. Centro de
Trabajadores Unidos: Immigrant Workers Project (CTU:IWP) sought to investigate economic realities
facing often-overlooked workers. As local and national stakeholders discuss the minimum wage, that
conversation is incomplete without recognizing that wage laws are continually broken and impact entire
communities.

ACKNOWLEDGEMENTS
Thank you to the team of grassroots surveyors that engaged local workers despite the intimidation and
connected with workers. Thank you to workers who had the courage to speak up about daily struggles in
the journey for a better future for themselves and their family.

Critical academic advice was provided by:
Nik Theodore, Ph.D -

Professor, Department of Urban Planning and Policy
University of Illinois-Chicago

Co-Authors:
Arturo Carrillo, Ph.D. Candidate - Jane Addams College of Social Work, University of Illinois-Chicago
Eric Téllez, Lead Organizer -

Centro de Trabajadores Unidos: Immigrant Workers Project

Funding for this report provided by:
Chicago Community Trust

Unitarian Universalist Fund
for a Just Society

Woods Fund Chicago

Dominican Sisters Fund
Many thanks to additional foundations that generously support our ongoing work:
Abelard Foundation

Claretian Missionaries

Just Pay For All

Ben & Jerry's Foundation

Crossroads Fund

Latino Giving Circle

Claretian Social Development
Fund

Field Foundation

Latino Policy Forum

Hispanics in Philanthropy

Nuestro Futuro

2

ABOUT CENTRO DE TRABAJADORES UNIDOS: IMMIGRANT WORKERS PROJECT
In 2008, after experiencing labor abuses at a local factory and organizing in their defense, a
group of immigrant workers were determined to create a stable resource on Chicago’s
underserved southeast side. That resource would ensure low-wage immigrant workers would
have the tools, information, and support to understand and defend their rights. The founders'
vision was to support a continual stream of workers to develop their own leadership potential in
order to advocate for themselves, mobilize their community, and take action against injustices
they experienced in the workplace. Out of that impulse, they established Centro de
Trabajadores Unidos: Immigrant Workers’ Project (CTU:IWP), the first worker center in the
southeast side of Chicago. The establishment of the organization filled a void to support
workers of both the southeast side of Chicago and the adjacent southern suburbs.
The unjust culture of exploitation in low-wage industries contributes to continued widespread
labor violations against a vulnerable population, immigrant workers. In 2012, a pilot study
conducted by CTU:IWP of workers employed in the southeast side of Chicago found that 20.2%
of workers reported earning less than the minimum wage, 64.3% did not receive overtime pay
and 68.8% reported “off-the-clock” violations. Therefore, CTU:IWP’s primary focal points have
been to bring about economic justice and improve the interrelated immigration issues greatly
impacting our community. In addition to addressing the abuses workers face locally, we strive to
understand and change the unjust policies out of which our local problems arise. CTU:IWP
advocates for systemic change by working with legislators and government agencies to improve
labor and immigration laws. CTU:IWP's six years of experience fighting for workers' rights built
up anecdotal evidence that wage theft was concentrated in particular industries. Retail, service,
restaurants, and warehouse work were all major sources of work violations, including wage
theft.
CTU:IWP is a worker center dedicated to organizing and supporting marginalized communities
to interrupt cycles of poverty and injustice in the workplace. The mission of CTU:IWP is to have
a powerful immigrant run organization on the Southeast side of Chicago that will educate
workers on their rights, develop leadership within the immigrant community, and organize all
workers as they fight for their rights in the workplace. We fight to change policy that increases
standards for immigrant workers.

3

EXECUTIVE SUMMARY
The purpose of this report was to expose working conditions for low-wage workers in the
southeast side of Chicago, a community far removed from the economic center of the city which
deals with high levels of unemployment decades after the exit of the once opportunity-rich steel
and manufacturing industries.
In 2013, Centro de Trabajadores Unidos: Immigrant Workers’ Project (CTU:IWP) began to
conduct a formal assessment of the working conditions for low-wage workers of the area with
the assistance of Nik Theodore, researcher at University of Illinois at Chicago: College of Urban
Planning and Public Affairs. A total of 182 surveys were collected within the 10th ward of
Chicago. Our goal was to assess the prevalence of wage theft and perceived threat of
retaliation by front-line low-wage workers who were not managers, professionals, technicians, or
self-employed.
Findings

38% or roughly 2 out of 5 low-income workers experienced wage theft.

Wage theft rates were highest in Service (65%), Childcare (57%), Retail (44%),
Restaurants (33%), and Grocery stores(29%).

Women are more likely to experience wage theft than men, 43% to 31% respectively.

Wage theft occurred highest among those paid in cash (58%). However, those paid by
company check were not immune; 31% reported at least one form of wage theft.

76% of workers believe the employer would take negative action against the worker or
not do anything to solve the original problem.
Recommendations

Conduct workshops to educate community residents about their rights as workers and
distribute easy-to-understand materials for workers to assess whether or not they are the
victim of wage theft.

Conduct labor rights and responsibilities workshops for local employers and distribute
materials for businesses to know current labor law and how to operate business
responsibly.

Investigate problematic businesses who habitually steal wages and violate their workers’
rights to conduct enforcement to promote industry-wide improvements.
4

INTRODUCTION

Six years after the official end of the economic collapse, the recovery continues at a slow pace.
Lack of consumer confidence and lack of strong spending factor into this moderate recovery.
Another phenomenon is the record level of income inequality. A February 2014 national study
found the share of income captured by the top 1% climbed from 9.9% in 1979 to 23.5% in 2007,
a level not seen since years preceding the Great Depression.1
While the top 1% capture record levels of growing income, some low-income families' wages
are stolen and amplify this divide. Wage theft is responsible for $7.3 million being stolen every
week from workers in Cook County. On average, Chicagoland low-income workers lose 16% of
their paycheck to wage theft, or $2,595 out of an annual salary of $16,7532. If a worker has a
family of three, that family would be below the Federal Poverty Guideline of $19,790. Earning
below the poverty line and losing wages to theft means that family is lacking $5,632 to pay for
basic needs like groceries, utilities, and housing. Wage theft puts already struggling families in a
worse situation and stifles local economic activity.
Chicago’s southeast side shares a similar story of economic crash and limping recovery.
Beginning in the early 1900s and up until its peak in 1970s, the U.S. Steel South Works
employed 20,000 workers, but at the time of its closure in 1992 only 700 workers were left.3
From 2002 to 2011, 932 jobs were added to make 9,407 total jobs in the area.4 However, since
2000 the number of unemployed people in zip codes overlapping the 10th Ward increased by
19.01%, to roughly 6,924 people looking for jobs5. Economic opportunities are not enough to
meet the demands of the community. High local unemployment depresses overall economic
activity and keeps the local economy stagnant.

1

Sommeiller, E. and Price, M. (2014). The Increasingly Unequal States of America. [online] Economic
Policy Institute. http://www.epi.org/files/2014/Income-Inequality-by-State-Final.pdf [Accessed Aug 8,
2014].
2
Theodore, N., Auer, M., Hollon, R. and Morales-Mirque, S. (2010). Unregulated Work In Chicago.
[online] Center for Urban Economic Development.
http://www.urbaneconomy.org/sites/default/files/Unregulated%20
Work%20in%20Chicago%204_7_2010%20FINAL%20REPORT_0.pdf [Accessed May 13, 2014].
3
Sellers, R. (n.d.). South Chicago : U.S. Steel. [online] Orion.neiu.edu.
http://orion.neiu.edu/~reseller/scussteel.html [Accessed Aug 7, 2014].
4
Onthemap.ces.census.gov, (2014). OnTheMap. [online] http://onthemap.ces.census.gov/ [Accessed
Aug 6, 2014].
5
American FactFinder. (2014) [online] Factfinder2.census.gov.
http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml [Accessed Sep.10, 2014].

5

DEFINITIONS AND TRENDS
Violations of wage laws are commonly referred to as wage theft. It occurs through the various
following forms: failure to pay minimum wage (i.e., paid less than $8.25 per hour in Illinois for
non-tipped workers), failure to pay overtime (i.e., paid less than 1.5 times the regular rate of pay
for all hours over 40 per week), “off-the-clock violations” (i.e., work not compensated before or
after regular shift), meal break violations (i.e., work during break without compensation), or other
illegal deductions taken from workers' pay.
One popular example is when a worker is paid cash and not reported on the businesses'
payroll. Often referred to as “under the table.” Employees will work for 40 hours or more for a
rate that is less than the established state or federal minimum wage rate. This is often done by
employers to avoid paying overtime rates or hiding minimum wage violations, as well as not
paying all tax obligations.
The issue has drawn significant attention due to its pervasiveness and disproportional impact on
low-wage workers. A study released in 2010 identified the industries in the Chicagoland area
with the highest rates of wage theft as measured solely by minimum wage violations included
private households (61.3%), personal and repair services (60.1%), retail and drug stores (32%),
grocery stores (25.9%), home health care (22.5%), restaurants and hotels (22.3%), residential
construction (21.2%), manufacturing, transportation and warehousing (21.1%), and security,
building and ground service (19.7%). There also appears to be a marked difference in minimum
wage violations by demographics; foreign-born Latinos had an especially high minimum wage
violation rate of 32 percent, nearly triple the rate of U.S.-born Latinos and more than 24 times
the rate of U.S.-born whites. Race plays an important role among U.S.-born respondents, where
African-American workers had a violation rate 27 times that of white workers (and triple that of
U.S.-born Latino workers).6
The law protects workers from employer retaliation if they complain to their employer or to a
government agency about their working conditions; retaliation against workers who attempt to
organize a union is also illegal. Threatening to fire a worker, actually firing or suspending
workers, cutting hours or pay, harassing or abusing workers, or giving workers a worse work
6

Theodore, N., Auer, M., Hollon, R. and Morales-Mirque, S. (2010). Unregulated Work In Chicago.
[online] Center for Urban Economic Development.
http://www.urbaneconomy.org/sites/default/files/Unregulated%20
Work%20in%20Chicago%204_7_2010%20FINAL%20REPORT_0.pdf [Accessed May 13, 2014].

6

assignment — all are illegal forms of employer retaliation if they occur as a direct result of a
complaint or union organizing effort. The explicit or perceived threat of employer retaliation
coupled with the limited job market can be a serious obstacle for workers to address injustices
in the workplace.

METHODOLOGY

Survey Design
The survey was designed with the support of researcher Nik Theodore of the University of
Illinois at Chicago: College of Urban Planning and Public Affairs. The 20-item survey was
designed to collect information on the rate of pay, method of payment, workplace conditions,
available benefits, perceived threat of retaliation by the employer, employment by staffing
agency, union membership, race, sex, and nation of origin. Given the plan to collect surveys in
public with respondents willing to respond without incentives, the survey was designed to be
easy to understand, simple to administer, and comprehensive. Most of the questions were
designed to be answered with a simple yes or no response. Multiple choice questions included
an option for an “other” response in order to capture other possibilities beyond the defined
answers. Surveys were designed to be conducted in 5 to 7 minutes.

Formulation of Questions
The first two questions were designed to screen out respondents that do not fit the criteria of
being employed in the 10th Ward. Capturing the industry in which the respondent was employed
was done by listing the categories that were expected within the 10th Ward; it was also clear
that the list was not comprehensive enough and therefore the option for “other” was left as a fillin. Respondents were asked to fill-in the type of work conducted. This question served to screen
out managers, professionals, technical workers, or the self-employed.
In order to measure overtime violations a two-part question was included asking respondents if:
1) they “worked more than 40 hours for this employer during your last work week?” and 2) “If
yes, were you paid time and a half for all of the hours you worked over 40?”. The questions
were designed to not depend on the respondent to understand the requirement of overtime pay
in the state of Illinois. Similarly in order to capture minimum wage violations the question asked,
“Last week, including any tips you earned, did you get paid less than $8.25 per hour?”
Measuring off-the-clock violations were done by asking, “Last week, did you work without pay
before your official shift started or after your official shift ended?”
7

Measuring perceived threat of retaliation by employer was done by the following multiple choice
question, “What do you think your employer would do if you want to complain about your pay,
hours and/or work conditions? (Check all that apply)” The options were: 1) I would get fired 2)
My hours would get cut 3) My wages would get reduced 4) Nothing will happen 5) My boss
would fix the problem 6) Other (fill in).

Defining the Survey Population
Criteria for Study
Participants had to meet the following criteria:

Have been employed during the previous work week

Be employed within the City of Chicago’s 10th Ward

Be a “front-line” worker (Not a manager, self-employed, professional, or technical
worker)

Working in a low-wage industry as their primary job

Excluded within this criteria were professional workers in education, health,
social services, religious institutions, insurance and financial services; however,
low-income workers within these industries remained part of the survey

Defining the Occupation Categories:

Child care: Those employed for daycare businesses, those operated out of a business or
home business. This category includes workers such as drivers and others employed by
child care businesses.

Construction: Laborers, trade workers, or anyone defining their work as being as a part
of the construction sector.

Factory: Production of goods, including food processing for commercial sale.

Grocery Stores: A sub-segment of retail which sells a variety of produce and food
products for off-site consumption. Community concentration of this industry merited
distinct categorization.

Restaurant: Cooks, busboys, waitresses and other jobs related to restaurants, both dine
in and carry out.

Retail: Businesses selling commercial goods, including pre-packaged food not meant to
be consumed at the point of sale.

8

Services: Includes home/professional cleaning services, laundry/dry cleaning services,
car wash, auto shop workers, landscaping, and entertainment.

Warehouse and Trucking: Laborer, drivers, operators and delivery.

Sampling Methodology
The worker population of interest is considered a “hard-to-reach” population due to their
vulnerable employment position, including oftentimes lack of immigration status. They may be
reluctant to participate in a survey on workplace conditions due to fear of retaliation by the
employer. In order to obtain such sensitive information, safety was prioritized and trust
established with the respondents.
In order to achieve trust, all surveyors, except the organization staff, were local community
residents. This decision helped improve the possibility of contacting “hard-to-reach” workers by
utilizing existing social networks. As most surveyors were local community residents, there were
opportunities for surveyors to run into local workers in everyday casual settings. Surveyors were
encouraged to open conversations with workers outside of the workplace, without immediately
asking questions from the survey. Some conversations would begin with the service offerings of
CTU-IWP. Other conversations would start with general conversations about neighborhood
current events. Teams of surveyors would go out together to social areas in the community
where workers were comfortable and relaxed. Another method to reach workers was to ask
workers to refer family members or social acquaintances to also complete a survey. This was
most successful when surveys were gathered in large social gatherings, like children sports
leagues and community festivals, where just-surveyed workers could immediately point out
other workers.
Once the person was identified as a worker and interested in completing a survey, the surveyor
was equipped with a map of the 10th ward to confirm their work place location was within the
ward. No financial incentives were given to participants. Surveyors were instructed to assist in
filling out the surveys with the respondents in order to address illiteracy or any possible
confusion with questions. Even where respondent wanted to independently fill out the survey,
surveyors were instructed to review all information to guarantee legible writing, clear indication
of response, and completion of all survey questions.

9

Limitations
Limitations existed within the sampling of low-wage workers in the 10th Ward specifically
workers who were employed in the 10th Ward but resided outside the community since the
outreach focused exclusively within the 10th Ward. Resources were not available to conduct
surveys outsides the community. Certain sectors of the low-wage workforce were underrepresented in our sample such as construction workers and landscapers, due to the fact that
they typically work outside the 10th Ward. Identifying low-wage workers employed in
businesses that do not directly interact with the general population were not as easy to access
as those in businesses serving the general population, such as restaurants and grocery stores.
As such, factory and childcare workers were harder to access for the survey. Other reasons for
lack of participation in the survey included: general skepticism, distrust of where the surveys
would end up, fear of retaliation, or publicly acknowledging off-the-books employment.
Given that the survey was designed to be administered in a brief manner, this research project
did not include open-ended in-depth questions or interviews that could identify a wide variety of
workplace violations or a financial measure of the wage theft. As a result, the data collected
was limited to the responses given on the survey and we could therefore not extrapolate the
amount of wage theft occurring in the community.

RESULTS
Respondent Characteristics
Through extensive outreach of the community we were able to collect 182 surveys of workers
employed within the 10th ward of Chicago beginning in April 2013 and ending August 2014.
After screening the responses to ensure they met the criteria, 70 surveys were excluded.
Leaving our total sample for this survey at 112 respondents. The sample was made up of 61
men (57%) and 46 women (43%). Respondents were predominantly Latino (93.7%, n=104),
foreign-born (71%, n=76), not temporary workers (88.9%, n=98), and non-union employees
(95.3%, n=102). Given the lack of diversity in the sample, with the exception of sex,
comparisons between groups were not able to be conducted.

10

Count of Respondents According to Gender

The industries selected for this study meant to capture the low
low-wage
wage industries of the area (see
Criteria for Study). Respondents were spread throughout the various industries selected for the
study. The highest percentage worked in Restaurants (26.7%, n=30)
=30) followed by Services
(15.1%, n= 17), Retail
etail (14.2%, n=16), Factories (13.3%, n=15), Grocery stores (12.5%, n=14),
Warehouse and Trucking
rucking (8%, n=9), Childcare (6.3%, n=7), and Construction
onstruction (3.6%, n=4).
Given the variance of the number of surveys colle
collected
cted for each industry, the findings are not
equally representative of the working conditions of their respective industry.

Count of Businesses Included in Survey According to Business Type

11

Findings
The rates of wage theft, as measured by this study include minimum wage violations, overtime
violations, and off-the-clock
clock violations. The overall rate of minimum wage violation across
industries were at 21% (n=23). Overtime violations totaled 18% (n=20) of the sample. While
12% (n=11) of those that responded to the question reported off
off-the-clock
clock violations. When
viewing the aggregate of wage theft violations, by the total respondents reporting experiencing
at least one form of wage theft, 38.4% (n=43) of our sample experienced wage theft in the
previous work week. A higher percentage of women (46%, n=21) experienced wage theft in our
study than men (31%, n=19).

Percentage of Wage Theft Among All Workers in Survey

12

a.

iolations
Minimum Wage Violations

The rates of violations varied widely in the study. Among the highest violators of minimum wage
were employers in the Service
ervice (53%), Childcare (43%) and Retail
etail sectors (31%).

b.

Overtime Violations

The highest rates of overtime violat
violations
ions were in the service (53%), construction (25%), and
grocery (21%) sectors.

13

c.

Off-the-clock Violations

Off-the-clock
clock violations were seen in similar rates in childcare (14%), restaurants
restaurant (13%), retail
(13%), and factory (13%) sectors.

d.

Combined

Overall, the rates of wage theft were highest in Service (65%), Childcare
hildcare (57%), Retail (44%),
Restaurant (33%), and Grocery stores (29%).

14

The rates of perceived retaliation varied among respondents when viewing the responses
separately. Yet when viewed in total, 43% of respondents feared some form of retaliation if they
complained to their employer, 33% felt nothing would happen, while 23% ffelt
elt the problem would
be fixed.

Analysis according to industry showed that Retail and Service workers, specifically in Grocery
Stores and Restaurants, take a major risk in reporting an abuse. Workers most likely to suffer
from wage theft overwhelmingly know that reporting any labor violation
ion will most likely harm
them or be met with indifference.

Rate of Retaliation or Problem Not Solved
According to Industry
Retail

87%

Services

86%

Restaurant

85%

Grocery

79%

Warehouse & Trucking

71%

Childcare

67%

Factory
Construction

54%
33%

15

The findings also indicate that wage theft is occurring at a higher rate among those being paid in
cash (58%). However those being paid by company check are not immune with 31% reporting
at least one form of wage theft.

CONCLUSION
In the 10th ward, 38% of low-income workers experienced wage theft. Considering that wages
should be fully paid to those who earned them, this number is staggering. 10th ward workers
who were paid with cash experienced the highest levels of wage theft, 58%. Documentation
serves as a protection against wage theft. As workers turn to informal arrangements without
written conditions, it becomes more difficult to enforce those agreements.
Data from our survey shows the top four industries rife with wage theft are: Services (65%),
Childcare (57%), Retail (44%), and Restaurants (33%). These jobs are accessible to most
people within the community and do not have collective bargaining. This reduces the leverage
of workers to negotiate and protect their rights.
Women are more likely to experience wage theft than men, 43% to 31% respectively. Industries
where women make up most workers merit investigation since gender discrimination against
women still exists in the workplace.

16

Workers who challenge wage theft and other labor rights violations face retaliation. 43% of
respondents reported they would experience retaliation if they spoke out. Further still, 76% of
workers believed that their employer would take negative action against the worker or not do
anything to solve the original problem. Industries with the highest amounts of wage theft, Retail
and Service, are the industries where workers most believe they cannot address wage theft or
other labor violations. The most likely outcome of workers taking action still leaves the injustice
uncorrected and could cost the worker their source of income. Combined with local
unemployment rising 19% from over the last 12 years, the economic environment discourages
workers from standing up for their rights.

Significance
Survey gathering across industries was varied and provided insight into local working conditions
more so for some industry than others. In restaurants and services, a robust amount of surveys
reflected the reality of workers and showed significant levels of wage theft. For construction and
child care, the small sample of surveys showed lower amounts of wage theft even though
anecdotal third-person reports indicated these industries also experience wage theft regularly.
Overall, the survey process exposed the organization to more cases of labor violations than
previously known in the 10th ward and helped to identify particularly problematic industries that
need education and outreach about Illinois labor and wage laws.
All community residents have a stake in wage theft. Local workers are also local consumers.
When part of a worker’s paycheck is stolen, that money to meet basic needs does not circulate
in the local economy. Low-road businesses are rewarded and given an illegal advantage
against its competitors who play by the rules and treat their workers with respect.

17

Next Steps and Recommendations
Our organization will continue the work in the 10th ward and surrounding areas to protect
workers’ rights. Armed with this new information, we can focus our resources where they are
needed and reach struggling workers.
As part of our new project, Community Alliance for Economic Growth, we intend for this
research to help assess the current economic realities and build strategies that create a strong
local economy from the grassroots level, based on strong, self-sustaining working families.
Workers are surprised by protections under labor laws and different schemes utilized to steal
wages. Workers need personal tools and education to know how to protect themselves in the
workplace and how to obtain the proper documentation if they find themselves in unfair working
conditions. Protections that government agencies can provide for workers facing retaliation
make agencies, like IDOL, indispensable partners to worker centers.
In an effort to proactively take on wage theft in the 10th ward and based on the findings of this
study, Centro de Trabajadores: Immigrant Workers’ Project recommends the following actions in
partnership with the Illinois Department of Labor:

Conduct workshops to educate community residents about their rights as workers and
distribute easy-to-understand materials for workers to assess whether or not they are the
victim of wage theft.

Conduct labor rights and responsibilities workshops for local employers and distribute
practical materials for businesses to know current labor law and how to operate business
responsibly.

Investigate problematic businesses who habitually steal wages and violate their workers’
rights to conduct enforcement to promote industry-wide improvements.

18

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