Challenging Exploitation and Abuse: A Study of the Day Labor Industry in Cleveland (text version)

In 1999, the National Law Center on Homelessness and Poverty estimated that over 700,000 people are homeless on any given night and up to 2 million people experience homelessness during one year in the United States. Homelessness is a nationwide result of a lack of decent affordable housing; however, Cleveland has its share of unique problems when it comes to homelessness. Cleveland is ranked by the National Law Center as one of the most unfriendly cities toward homeless people in the U.S.; it is estimated that in Cleveland in 1999, 3,080 people are homeless each night. Homeless people include those who stay in shelter, on the streets or in abandoned buildings. Cleveland’s existing problems are expected to worsen due to changes in the welfare system--over 4,000 households will lose their eligibility for cash assistance by the end of 2001. In addition, the number of affordable housing units lost in the community increases every year.

Multiple factors are responsible for making up this large population; however, the lack of affordable housing and lack of employment opportunities are two major reasons. HUD estimated that Greater Cleveland needs 45,000 affordable housing units in order to overcome the city’s current housing crisis. Currently, a person who earns minimum wage would have to work 80 hours a week to afford the average apartment rent in Cleveland. The Clinton Administration HUD secretary declared the growing crisis in affordable housing locally and nationally the most serious in American history.

In addition to the lack of affordable housing, there is also a lack of proper training and permanent employment opportunities for homeless individuals who may have little or no job skills but do have a desire to work. With the loss of cash assistance to single adults, there is no safety net for those that cannot find a job that pays a decent living. Cuyahoga County has also found over the last two years that families who are using up their eligibility have many barriers to employment. These barriers include lack of skills, education, chemical dependence, and mental health issues. Furthermore, existing job training programs in Cleveland require a commitment of at least 6 weeks and take place during the day. Most people cannot afford this much time away from work, and if they have children they do not have sufficient means for daycare or a baby-sitter. Due to this lack of accessible job/life skills programs in Cleveland employment is not accessible to those who need it most.

Most people attempt to overcome these employment barriers by seeking work at temporary labor employment companies. The Council of Economic Opportunities in Cleveland estimates that 10,000 people in the city use temporary employment companies (day labor companies). The City of Cleveland and religious organizations in the community contract with the downtown temporary labor companies to utilize temp. workers. The County has even contracted a day labor service to provide emergency jobs to those families previously on welfare who find themselves without income. Temporary employment day labor companies appear to be an appropriate solution for those who are looking to get back on their feet; however, in reality, day labor companies help keep people stuck in the cycle of poverty. Part of the reason for this stagnation is that temporary employment companies are profit based rather than service based. This for-profit mentality leads to the exploitation of many temporary workers. After holding many forums with the homeless population who use these companies, we found:

1. Temporary workers are paid low wages (in some cases once fees are accrued they make below minimum wage).
2. They are sent into dangerous work conditions without proper training.
3. They are denied proper overtime pay.
4. They are treated with disrespect. Some have alleged sexual harassment and a racial bias.
5. They are never extended any benefits, including health benefits.
6. The placements rarely lead to a permanent position.
7. The downtown companies are run much like a plantation.

NEOCH has staged several meetings with the homeless to discuss conditions of temporary employment companies since 1997. These meetings have taken place in facilities such as the Bishop Cosgrove Center (a meal site), 2100 Lakeside (Emergency Men’s Shelter), Salvation Army PASS Program, and Project Heat Site A (overflow shelter and current women's shelter). In addition to these meetings, a Case Western Reserve doctoral student stages meetings with low wage workers every Thursday to collect testimonies and plot a course of action. The overriding issue that arose out of these meetings was perpetual low wages. Numerous people complained that most jobs pay the day labor companies between $10.00-$15.00 an hour, but the workers are only paid minimum wage or at most $6.50 an hour. Often the workers wages fall below minimum wage due to day labor fees. Workers are charged for the use of uniforms (steel-toed boots, masks, glasses and other safety equipment), and mandatory transportation fees to and sometimes from the work site are also charged ($2-$6). Another fee between $.50 to $1.50 is charged to cash paychecks. On top of these fees, workers also complain about pay deductions for insurance that they never receive and deductions for expenses that they are unaware they are paying to support. Workers rarely receive overtime pay for overtime work. After all of these fees have been accrued, the worker is left with approximately $25.00-$30.00 for a full days work--a non-livable wage that is well below the legal requirements for minimum wage.

In addition to low wages, several other complaints against the temporary employment companies are listed. One of these complaints is regarding "favoritism." Certain people are always sent out for jobs even if others are there before them waiting. Favorites are sent out even if they do not have the appropriate skills. Those who are not "favorite" employees have to wait for long periods of time --even several days to be sent to a job without pay. If the staff doesn’t like an individual they won’t send him or her out no matter his or her skills. There were also cases where staff has accepted bribes from people waiting to be sent to jobs. Several workers also stated that sometimes they have been sent out on a job and when they arrive they are told that there is no work. They thus waste several hours of the day with no work and no pay.

Favoritism is not the only complaint regarding agency staff; workers also accuse the staff of disrespect and even illegal behavior. It is not uncommon for staff to use profanity to denigrate workers; many temporary day workers state they feel they are treated like children. Some workers have charged racial bias and sexual harassment. Day labor companies are also infamous for false advertisement and breaking promises. Companies tell workers they will be earning $7.00 an hour but when workers show up to service, there is nothing available except minimum wage jobs. There are also promises of being hired after 90 days, but after the 90 days have lapsed workers report never even being considered for permanent employment. Some workers accuse companies of prohibiting them from continuing work after hearing that a worker was promised full-time, permanent employment. Workers feel this has occurred because day labor companies do not want to lose the money that they are earning from each warm body. Some companies have also advertised health benefits or bonuses after the individual worked so many hours, but these promises are never fulfilled.

The current temporary employment companies are not meeting the needs of the homeless population; those who use these services are not given the chance to move on to permanent employment and self-sufficiency. Instead temporary day labor companies are using the plight of homeless people as an avenue to earn profit by trapping workers into permanent, low-income servitude. A plantation mentality has developed in that homeless and very low income individuals have no where else to get money or stable employment so they will endure long hours of waiting, excessive "fees," and management abuse in order to be sent out to a job. In August 2000, The Plain Dealer ran an article about the temporary workers who clean Jacob’s Field for $30.00 a night. One of those interviewed stated: "Instead of pickin’ cotton bolls, we’re picking trash from under the seats...it’s the same thing. Look. Have you ever seen pictures of people pickin’ cotton? Take a picture of me pickin’ cotton in the city."

NEOCH believes it is possible to establish a non-profit temporary employment worker center or community hiring hall that could uphold promises to its workers and be governed by those using the service. This non-profit worker center would pay a living wage, teach life skills, and help temporary workers find employment at the end of a 12-week program, called the Fifth Day. A non-profit community hiring hall would provide a decent living wage ($8-$10.00 per hour) and at the same time prepare people for permanent employment. We intend this organization to operate as a cooperative in which homeless and low-income workers influence the policies and procedures of the organization. This organization would also work in collaboration with organized labor. The community hiring hall would not undermine current collective bargaining contracts and would invite members of the union into the hiring hall to instruct workers on the benefits and advantages of an organized work force. We intend to partner with organizations that can provide training, social service providers, religious organizations and other partners in the community to organize the community hiring hall.

1. Objectives

• Construct a worker center that serves low-income workers but will not result in a permanent state of poverty.
• NEOCH will bring together union, religious, social service organization and training entities to serve low income, homeless, ex-felons, those graduating from cash assistance and other populations currently exploited by the downtown day labor companies.
• The community hiring hall will solicit socially conscious businesses and those with a public image to hire temporary workers that are paid a decent wage. We will sign contracts with these companies in exchange for providing employees.
• Recruit a small number of people at first, growing as the organization grows, to serve as the labor pool.
• With the workers, the hiring hall staff will develop a policy and procedure manual to best serve the community.
• The community hiring hall will offer all the advantages of the current day labor companies like pay every day if requested, transportation, equipment, and banking services without the exorbitant fees currently charged. These will all be voluntary programs and not requirements as currently exist.

2. Start a 12-week job/life-training program: The Fifth Day

• The community hiring hall will enroll fifty people and start them on a 12-week job/life skills training program. After four weeks, we will enroll another 50 workers and start them on the same program. This will give the worker center a yearly total of 600 workers.
• Of the 50 people employed, it is estimated that 25 will finish the program and move on to permanent employment. This will give the worker center a yearly success rate of 300 previously unemployed and underemployed people with new jobs.
• The other 25 workers will be extended the opportunity to remain with the non-profit temporary service.

• Research shows that most for-profit employment companies in the Cleveland area pay $6/hour for every $10/hour they earn--this is not a living wage or enough to secure stable housing.
• Our worker center, being non-profit, will pay $7.50-$9.00/hour for every $10.00 an hour we earn allowing workers to become self-sufficient and find permanent housing.
• We will regularly recalculate the salary structure to maximize funds going to the workers.
• Our worker center will also provide health insurance as well as workers compensation for all laborers.

• On the fifth day of each workweek, workers will receive one full day of paid counseling or training. Job coaches will refer workers to companies that can help them overcome their employment barriers and they will receive training that will enhance their employment skills.
• Volunteer mentors will be on hand to assist workers in community building exercises which will help them develop a support network in addition to their formal training and counseling.
• Workers will take an active part in governing the Fifth Day. This influence on management will empower workers and also ensure that the program continues to effectively address their needs.
• All workers will be encouraged to join a union upon moving into permanent employment.
• Provide an arbitration board made up of workers, staff, and outside observers to handle complaints by the workers.

• After a worker has completed The Fifth Day program, our worker center will find him or her a full time job. The worker center will first try to find the worker employment with the employer that he or she was working with during The Fifth Day program. If the company can’t/ won’t hire the worker full time, we will find him or her another skilled position.
• The Community hiring hall will not have any obstacles to the employee receiving permanent employment. There will be no fees to the contract employer that would act as a barrier to the temp. worker becoming a permanent employee.
• Because participants in The Fifth Day program will have completed a very in-depth training course, we estimate the companies we work with will hire 65 percent of our graduates.

• After our workers find full-time employment, they will remain in contact with our agency and continue working with volunteer mentors for community development and support for a minimum period of six months. After that time they will no longer have formal contact with the agency.
• Those who do not desire full time employment will remain as contract help with the non-profit temporary service.
• The community hiring hall will strive to offer training and access to the benefits of a union for all of its employees.
• The key to the success of the community hiring hall is that employees will move to a stable job when they are ready.
• We will ensure that all employees have an adequate opportunity for improving living skills, education, access to technology and work preparation.

Our plan is to establish a temporary employment worker center or community hiring hall that is socially responsive. We will also construct a training program (The Fifth Day) that will allow the trainee to work four days a week and receive one full day of paid counseling/training day on the fifth day of each week. The worker center will be non-profit and will pay its workers a living wage and provide adequate health insurance. The ultimate goal of the worker center will be to place as many people as possible into permanent employment. Since the organization is non-profit, there is no motive to encourage workers to continue using the temporary employment services, so they will be encouraged to graduate from the Fifth Day program and move on to permanent employment and self sustainability.

Staff will recruit workers from local shelters and drop-in centers. The community hiring hall will also be open to accepting referrals from companies. Workers who wish to use the additional services offered will commit themselves to work for the organization for twelve weeks. Workers will work four days a week and receive one paid, full day of training/counseling depending on the individual’s needs. This training aspect of the program is really the only part of the program that will not be able to sustain itself. The other aspects of the hiring hall will be self sustaining in that the hiring hall will have contracts with local businesses who will pay for the workers sent out every day.

The worker center will work to recruit businesses that want to hire workers not being exploited by day labor companies. Employers will also benefit from using our services because we will allow our workers to take an active role in government, ownership and development of the agency. We anticipate that workers that are not being exploited will be better workers than those of the other for-profit temporary day labor companies. Employers will also benefit by using our services because it will be viewed as a social investment. The situation of temporary workers in the United States is much like the situation of sweatshop workers abroad. Comparatively, temporary workers make a much higher wage, but when the cost of living proportions are drawn, the reality is the same—workers are exploited and are not paid a living wage. Businesses which contract with the community hiring hall will be publicly viewed as a socially conscious company that is committed to implementing solutions to poverty.

We will employ two Job Coaches who will make assessments of each worker and refer them to any needed services such as day care, court problems, health problems probation and parole problems etc. Job Coaches will also ensure that each worker receives the appropriate job skills training they require (resume writing, computer skills etc.). Each Job Coach will have a caseload of 25 persons for twelve weeks (five each day). In addition to Job Coaches, we will have volunteer mentors to help facilitate community building and peer counseling among participants in The Fifth Day program. Volunteer mentors will also maintain contact with workers after they have secured permanent employment to ensure that they remain employed and continue to have a support network. A volunteer trainer and coordinator will recruit, train, and assign mentors to the workers, and an overall coordinator will coordinate the work of the job coaches.

We will be able to gain contracts from employers because we will be able to offer them higher quality workers than the for-profit day labor companies for the mere fact that they are treated better. Our workers, who will receive a living wage, will have a better attitude toward their work than those who are exploited by other day labor employment companies. The Fifth Day can also promise employers that workers will receive job skills training once a week and have support services available to them the entire time they are enrolled in the program. These are two factors that dramatically increase a worker’s chances of success that other day labor companies currently do not offer.

Since The Fifth Day program will pay workers between $7.50 and $10.00 an hour, our community hiring hall will earn between $1.00 and $3.00 an from the workers to cover costs. This profit will help cover the administration costs of the program as well as medical insurance and workers compensation for the Fifth Day participants; however, we still need foundation support to start the project. We anticipate foundation support to start this program, and local county and city funds to cover the on-going training costs. We are currently seeking public funding as well as private foundation to begin this program. The Coalition will work on developing sustainability of this project.

1. Create competition for the exploitative labor organizations that prey on unskilled workers.
2. Train workers to be better prepared for full time employment.
3. Provide living wages and health benefits to workers with lower skill levels.
4. Provide a forum for influencing the management of their source of income.
5. Break the cycle of poverty for those who are currently exploited by the downtown temporary day labor companies.
6. Work in collaboration with organized labor to train workers and become familiar with the benefits and advantages of a union.

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