PROPUBLICA AND AMERICAN PUBLIC MEDIA’S MARKETPLACE LAUNCH EXCLUSIVE INVESTIGATION: TAKEN FOR A RIDE: TEMP AGENCIES AND ‘RAITEROS’ IN IMMIGRANT AMERICA

Contact: Jen Keavy

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Email: jkeavy@americanpublicmedia.org

Contact: Mike Webb

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Email: mike.webb@propublica.org

April 29, 2013

PROPUBLICA AND AMERICAN PUBLIC MEDIA’S MARKETPLACE LAUNCH EXCLUSIVE INVESTIGATION:
TAKEN FOR A RIDE: TEMP AGENCIES AND ‘RAITEROS’ IN IMMIGRANT AMERICA

INVESTIGATION UNCOVERS EXPLOITIVE SYSTEM OF LOW-COST TEMP LABOR FOR MAJOR CORPORATIONS

New York, Los Angeles, St. Paul, Minn. (April 29, 2013), Today, as Congress continues debating immigration and labor reform, ProPublica and American Public Media’s Marketplace announce an exclusive joint investigation into a largely secret underworld of temporary labor in the U.S. The investigation reveals how scores of immigrant workers are caught in a system that benefits some of America’s best-known companies and largest temp-agencies by providing low-cost labor – but that pushes workers’ pay below the minimum wage – and could violate wage laws.

Following in-depth investigative reporting, ProPublica’s Michael Grabell and Marketplace’s Jeff Tyler found that companies like Ty Inc., Sony, Frito-Lay and Smirnoff benefit from – and tacitly collaborate with – an underworld of labor brokers, known as “raiteros”. Through temp agencies like the Santa Barbara, CA based Select Remedy, the raiteros pack worker paychecks with a range of fees, pushing their pay below minimum wage, in exchange for transport to worksites, recruitment, providing paychecks, and handling of pay disputes. The temp agencies do not pay the raiteros. Instead, the low-wage workers pay the raiteros to drive them to and from the work site in vans and the investigation found that they control access to work from beginning to end.

ProPublica and Marketplace’s joint investigation found that van networks, paid for by workers, exist in temporary labor markets across the country from California, to Massachusetts, New York and New Jersey, but it is in Chicago’s Little Village, the largest Mexican community in the Midwest, where the “raiteros” have melded with temp agencies and their corporate clients in a way that might be unparalleled anywhere in America.

Grabell and Tyler’s investigation found that the ultimate beneficiaries of this system are large corporations like Westmont, Illinois based, Ty Inc., producer of the popular Beanie Babies toys. These corporations contract temp agencies, like Select Remedy, to source temporary labor from communities like Chicago’s Little Village. As these companies benefit from low cost just-in-time labor, the temporary workers they hire are seeing their paychecks sometimes stripped below minimum wage after fees are deducted by the raiteros.

Select Remedy and other temp agencies maintain that the raiteros are merely van drivers hired by the workers. They say they have no contract or connection to the temp agency. Yet, ProPublica and Marketplace discovered that the agencies provide applications so the raiteros can recruit workers and even call raiteros with the number of workers needed at each worksite. At the end of each week, the raiteros pick up the workers’ paychecks from the temp agencies and bring them to check-cashing stores, where workers are charged $3 to $4 to cash them. In some cases, the raiteros say, the temp firms even provide the vans they use to drive workers to their jobs, or lend the raiteros money to buy the vans.

In 2006, the state of Illinois made it illegal for temp agencies to charge workers for transportation or to refer them to van drivers who did. The law already outlawed temp agencies from forcing a worker to pay a fee for cashing a paycheck. Temp agency managers told ProPublica and Marketplace that, as a result, most staffing firms did away with official, paid relationships with drivers. Instead, they developed informal arrangements with the raiteros, which insulated the temp agencies from responsibility. The investigation found that van systems in other parts of the country, like New Jersey and Massachusetts, have clearer ties to the temp agencies and that the fees are legal in those states, with some restrictions.

The full story is online today at http://www.propublica.org/raiteros and at http://www.marketplace.org/raiteros. In addition to the full report from ProPublica’s Michael Grabell, Marketplace will air three companion radio reports from Jeff Tyler. The first feature airs later today on Marketplace, the second radio feature airs Tuesday on Marketplace Morning Report and the third airs on Marketplace on Tuesday afternoon on most public radio stations and at marketplace.org. In Tyler’s radio reports, listeners will hear first-hand from the temp workers, employment law experts and the raiteros themselves. A behind-the-scenes reporter’s notebook podcast, in which Grabell and Tyler discuss their investigation, is also available on both ProPublica and Marketplace‘s sites today.

This joint investigation is part of a partnership between ProPublica and Marketplace’s Wealth & Poverty Desk. ProPublica and Marketplace, along with PBS’ FRONTLINE, recently won an Investigative Reporters and Editors Award for “Big Sky, Big Money”, their multi-platform joint investigation into campaign finance in the post-Citizens United era.