In essence, the employee might work the equivalent of a full-time job but receives no health insurance, no vacation time, no sick or maternity leave and no job security.
This dreadful scenario is compounded by the fact that the contract employee is given an hourly salary slightly more than the minimum wage for which he or she must pay 13.3 percent in federal taxes, 10.5 percent in Social Security taxes and 2.9 percent in Medicare taxes.
When it comes time to file income tax forms, the perplexed contract workers learn that they owe the federal government a great deal of money, in spite of the fact that their gross incomes for the year may be at or below the poverty level.
But the exploitation does not stop there. The federal government has instituted a policy to “reward” the working poor. It is called Earned Income Credit. All low wage employees who file and have a W-2 form qualify for an “incentive” refund check from IRS.
The Earned Income Credit can be as much as $5,751. However, this does not apply to contract employees. They do not receive a W-2 form. Their incomes are reported on form 1099.
Even when the contract employee files as head of household and with minor children, he or she does not qualify for this credit.
Tax payers under 25 and over 65 are also excluded from receiving EIC – even if they receive a W-2 and file as head of household. This is a clear case of age discrimination.
While I single out health care corporate exploitation, that is not to say that they are the only culprits. The construction industry has found a great deal of profit-making opportunities by using this scheme. They have a trend towards hiring people who are willing to work “part-time” or “temporary” for which there are no company benefits. Because there is a great surplus of labor, the companies know that there will always be available and willing workers, no matter what they offer or refuse to offer.
The exploitation of the poor is so easy to achieve. They have no voice. In a democracy, if you ask for nothing and do nothing, you get nothing. Those of us who advocate for the poor stand alone — not even the poor themselves augment our efforts.
It is not that society is unaware; it is that society does not care. Several famous people have said that the knavery of the rich justifies the thievery of the poor. This is my position also.
Gilbert L. Raiford is semi-retired after a career in teaching and working for the U.S. Department of State. He may be reached at firstname.lastname@example.org
Photo: Gilbert L. Raiford