How Goldman Sachs and Other Companies Exploit Port Truck Drivers
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And that's not all. He does not have an employer that is paying into Social Security for him, as an employee would, nor does he get health coverage. If he is hurt on the job, he's not eligible for workers' compensation, and if he gets laid off or is unable to work (which can happen if drivers own trucks that are not compliant with health or safety laws, and they can't afford to fix their trucks), he is not eligible for unemployment.
"We believe the drivers are misclassified," said Valerie Lapin of the Coalition for Clean and Safe Ports. "Government regulators should crack down on these companies and bring them into compliance so drivers can receive the rights they are entitled to."
Of course for companies, it all comes down to the bottom line. By privatizing profits and socializing losses, they lining their own pockets at the expense of workers — and the rest of us. "I know of a driver who was a 20-plus-year veteran, professional driver," said Lapin. "His truck wasn't compliant, and now he has been unemployed for two years and ended up on welfare. His company should have been paying into the unemployment for him, and now we taxpayers are paying for him to be on public assistance, which is tragic, because all he wants is to be driving."
And we lose out in other ways, too. According to The Big Rig:
Unpaid income taxes, payroll taxes, unemployment insurance, and workers' compensation premiums mean that misclassification contributes significantly to the nation's tax gap, currently estimated by the Treasury Inspector General at $345 billion. A recent government estimate put the loss from just unpaid Social Security, Medicare, and Unemployment Insurance taxes due to misclassification at $15 billion. Similarly, as much as 20 percent of workers' compensation premiums in New York — $500 million to $1 billion — go unpaid each year due to misclassification. Total tax loss in California due to misclassification has been estimated to be as high as $7 billion.
In the port trucking industry, independent contractor drivers, or "owner-operators," as they are also known, bear the costs of truck ownership, operation, and maintenance. One estimate put those costs at 60 percent of drivers' gross incomes."
As Andrew Leonard writes for Salon, "Mejia is part of the shadow economy, though not in the sense that that term is commonly understood: as an autonomous netherworld entirely off the books and underground, invisible to the taxman and mainstream society. Mejia's shadow economy is something a little different; purposefully created from the top down, its growth driven by employers increasingly eager to shed costly, legally mandated commitments to their employees."
Not only does this shadow economy rip off taxpayers and hurt workers, it's also extremely dangerous. In 2009, Felipe Curiel, a 42-year-old truck driver was nearly crushed to death when an SSA Marine crane operator dropped a cargo container on his rig. A week earlier, port driver Pablo Garcia was killed at an SSA Marine terminal, when a forklift driver hit his truck, pinning him between two chassis.
Basic health and safety laws do not apply to contract drivers. "If you see a hazard in your work place, and you want to report it to OSHA [the Occupational Safety and Health Administration], there is no recourse. You are not covered, because you are not an employee," said Lapin. "Drivers are asked to do things that are not safe a lot of times, and they feel like they can't fight back and let their bosses know, because then they won't renew their contracts. I hear this all the time — they ask them to carry loads that are too heavy. The federal government sets limits on how much a truck can carry, and they are required to go and stop at scales that the Highway Patrol mans. Sometimes a company will tell them to avoid the scales — the driver knows it is an overweight load. They should be able to say, "No, I'm not going to take that," but as an independent contractor, they feel pressure if they do, they might not get dispatched the next day."