Street Corner, Incorporated

Keith Savage survives day to day on sheer strength. "I specialize in hard physical labor," says Savage, a muscular man in his early 40s who makes his living knocking down buildings by hand. For years he got most of his jobs through Labor Ready, the nation's top employer of temporary manual labor, often sleeping across the street from the company's hiring halls so he could be first in line when the doors open at 5:30 in the morning. While most temp agencies deal in "white shirt" office work, as Savage puts it, "Labor Ready is the brutal jobs, the gut-busting jobs. I tell them to give me the hardest work they have."

Here at the very bottom of the American economy, Labor Ready makes a good living dispatching day laborers like Savage to perform the dirty, dangerous jobs that no one else will do. Founded 13 years ago in Spokane, Washington, the company rakes in $1 billion in annual revenues by recruiting workers from unemployment offices, homeless shelters, and drug-rehabilitation centers, and then peddling their labor to private companies and public agencies.

Every weekday at dawn, workers line up outside some 800 Labor Ready branches in the United States, Canada, and Puerto Rico for a chance to dig ditches, toss boxes, and scrub toilets for minimum wage. They have temped for Wal-Mart and Home Depot, cleaned up flood-damaged communities in North Dakota, and cleared rubble near the World Trade Center. Lured by the promise of "Work Today, Cash Today," some 700,000 workers pass through the company's doors each year -- a workforce surpassed by only a handful of U.S. firms. The company's annual report brims with upbeat depictions of its "emphasis on worker safety" and how it "treats workers with respect," making it the undisputed leader in a day-labor market that now totals $16 billion a year. "What we do is put people to work," notes Tim Adams, the firm's general counsel. Workers earn enough money to "make a real difference in their lives," he says, "and that's gratifying."

But a raft of lawsuits brought by workers and government agencies, dozens of interviews with laborers and former managers, and thousands of pages of public records paint a far different picture. Workers are often sent out on dangerous jobs with little or no training; company records indicate that 10,000 Labor Ready employees are hurt on the job each year. Nearly two dozen states are investigating whether Labor Ready has shortchanged taxpayers by underpaying premiums to state insurance funds that compensate injured workers.

In addition, the U.S. Department of Labor has repeatedly fined the company for breaking minimum wage laws and illegally charging workers for gloves, goggles, and other essential safety gear. The firm has even patented a machine to profit from cashing paychecks for employees. "If you take all the money they deduct and all the time they are not paid for, workers are definitely making below the minimum wage," says Mary McQuain, a West Virginia attorney who represents workers in a class-action suit against Labor Ready. "I've seen a lot of pay stubs, and people have ended up with $11 for a day's work after all the deductions."

But subsistence wages and risky jobs don't deter workers on the lowest rung of the labor market from filling Labor Ready's hiring halls in poor urban neighborhoods. "They prey on people who are low-income, homeless, drug-addicted -- people who don't have things to get a regular job," says Fred Stevenson, a 54-year-old homeless man who had a brief stint packing boxes for Labor Ready.

The company got its start in 1989, when two small-time restaurateurs in Spokane hit upon the idea of selling blue-collar workers like fast food. Glenn Welstad and John Coghlan were running a burger joint called Dick's Hamburgers when the inspiration hit them: Couldn't the principles they had developed to manage the flow of burgers be applied to units of human labor?