Government tax subsidies go to construction contractors with labor abuse records – Minnesota Reformer

Subsidized labor abuse

North Star Policy Action, a union-backed Minnesota think tank, documented 33 construction projects that have received over $84 million in taxpayer subsidies while employing contractors tied to proven or alleged worker exploitation. 

For example, they look at Absolute Drywall, a contractor previously cited by state and federal labor regulators for violating child labor laws and misclassifying workers to avoid paying overtime and payroll taxes. The Reformer has previously reported on allegations against Absolute Drywall of wage theft and firing a female employee after she reported being raped and sexually assaulted by a supervisor while working at Viking Lakes in Eagan. 

According to the report, Absolute Drywall has worked on five tax-subsidized affordable housing projects across the Twin Cities, including Legends of Cottage Grove, Oaks Landing and Twin Lakes Family Apartments, all built by Dominium. 

The report’s authors do not tie Absolute Drywall — nor any other problem contractor in the report — to labor abuses on tax-subsidized projects. But labor laws, especially in non-union construction, are often violated and seldom enforced.  

Minnesota has passed several significant laws in recent years to combat labor abuses by making wage theft a felony, granting criminal investigatory powers to the Commerce Department and making general contractors liable for wage theft by their subcontractors. 

State and local governments also often take steps to ensure tax dollars don’t fund exploitative projects through setting a prevailing wage, which requires contractors to pay higher minimum wages on publicly funded projects. But those protections rarely extend to projects funded through two of the largest and oldest forms of tax subsidies: the low-income housing tax credit and tax increment financing. 

The report’s authors — Jake Schwitzer and Lucas Franco — recommend governments expand the use of prevailing wage and step up on enforcement; set contract terms to claw back funds from developers if labor laws are violated; and require developers to disclose their subcontractors and their track records. 

32,000 Twin Cities workers illegally paid less than minimum wage

Employers are illegally paying less than minimum wage to an estimated 32,000 workers in the Twin Cities metropolitan area, according to a new report from the Workplace Justice Lab at Rutgers University.

On average, workers were shorted $2,700 per year over the past decade, with violations concentrated in high-demand, service sector jobs in places like restaurants, preschools, hair salons and entertainment venues. 

The report’s authors — Jake Barnes, Janice Fine, Daniel Galvin and Jenn Round — praised the city of Minneapolis’ Labor Standards Enforcement Division for its proactive approach to enforcing minimum wage violations but say the city needs more investigators.

The hedge fund sucking the Pioneer Press dry

In 2006, the Pioneer Press’ editorial ranks exceeded 200 union news workers — reporters, editors, photographers. That year, New York-based hedge fund Alden Global Capital became a minority owner, ushering in a new era of disinvestment. Today, there are just 29 union news workers in the newsroom, plus a handful of managers, Racket’s Jay Boller reports in a deep dive into the hedge fund killing Minnesota’s oldest newspaper.

The past few decades have been bad for the entire newspaper industry to be sure, as tech giants have claimed the advertising revenue that used to support journalists in cities and towns across the country. 

But it hasn’t been as bad in the news business as it would seem by looking at the PiPress. You can tell by looking at Alden’s profits. In 2017, for example, PiPress produced a $10 million profit at a 13% margin, according to Nieman Lab. Alden earned enough

SDGs, Targets, and Indicators

SDGs, Targets, and Indicators

1. SDG 8: Decent Work and Economic Growth
• Target 8.7: Take immediate and effective measures to eradicate forced labor, end modern slavery and human trafficking, and secure the prohibition and elimination of the worst forms of child labor.
• Indicator 8.7.1: Proportion and number of children aged 5-17 years engaged in child labor, by sex and age group (relevant to the article’s discussion of Absolute Drywall’s violation of child labor laws).
• Indicator 8.7.2: Number of victims of human trafficking per 100,000 population (relevant to the article’s mention of worker exploitation).
2. SDG 10: Reduced Inequalities
• Target 10.4: Adopt policies, especially fiscal, wage, and social protection policies, and progressively achieve greater equality.
• Indicator 10.4.1: Labor share of GDP, comprising wages and social protection transfers (relevant to the article’s discussion of wage theft and labor abuses).
3. SDG 16: Peace, Justice, and Strong Institutions
• Target 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all.
• Indicator 16.3.1: Proportion of victims of violence in the previous 12 months who reported their victimization to competent authorities or other officially recognized mechanisms (relevant to the article’s mention of a female employee reporting sexual abuse).

Table: SDGs, Targets, and Indicators

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Source: minnesotareformer.com

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