Earnings

“Our works are too heavy, but our wages are too small.” 
— Arkansas poultry worker [55]

Workers in Arkansas poultry processing plants often do not earn enough to support their families. The average wage for Arkansas poultry workers ($13.84 per hour) is slightly above the national average for poultry workers ($12.50 per hour). However, as noted in Chapter 2, this is not considered a livable wage in Arkansas for a two-earner household with one or two dependents. [56] The majority of workers, who work as slaughterers, cutters, trimmers, and meatpackers, earn closer to $10.89 per hour. [57] Furthermore, the high incidence of wage and hour violations reported by surveyed workers suggests that take-home pay may be significantly lower than the averages captured in official census data.

Many of the Arkansas poultry workers interviewed for this report felt that their wages were not enough, especially considering the difficulty of the work that they do. One worker described feeling like the workers were treated like animals, because the volume of work expected of them is so exhausting. “I don’t think they [the bosses] would let their children, mother, and father do these kind of work and pay them [so little],” the worker said. [58]

The method by which workers are paid can have a negative impact on their earnings as well. Employers in Arkansas’s poultry industry reportedly distribute pay to workers in a variety of ways. According to survey results, the payment formats vary significantly based on worker nationality and by whether or not workers have access to a bank account. The relatively new, but increasingly common, payroll card (prepaid debit card) system has both advantages and disadvantages for workers.

Form of payment

Among workers surveyed, 37% were paid through direct deposit, roughly onefifth were paid in check or in a combination of cash and check (23% and 22%, respectively), and 17% were paid with prepaid debit cards known as payroll cards. These formats have distinct benefits and costs for different groups of workers, most notably those born within and outside of the United States, and those with and without access to a bank account.

The most common method of pay varied significantly by nationality. Nearly 8 out of 10 U.S.-born workers surveyed received their pay through direct deposit into a bank account, compared to only 1 in 10 foreign-born workers. Foreignborn workers were much more likely to be paid in one of the other formats: 37% of foreign-born workers were paid in a combination of cash and check, 31% in check alone, and 21% through a payroll card (see Table 4).

Direct deposit is an easy and straightforward way of receiving and tracking pay for many workers, but is not an option for those who do not have access to opening or maintaining a bank account, either because of low credit ratings, minimum balance requirements, or insufficient identification. Opening a bank account is typically more difficult for low-income people and for undocumented immigrants, who may lack the necessary identification or fear that their information will be used by law enforcement to target them for deportation. [59]

Distributing worker pay by check is commonly used and longstanding format, but workers without access to a bank account in which to deposit their checks are frequently subject to high check-cashing fees and fees for other financial transactions. [60] Payment in combination of cash and check, while not illegal, may present an opportunity for employers to conceal wage and hour law violations. In a large-scale 2009 study of low-wage workers and labor law violations, researchers found that workers paid in cash or personal check experienced much higher violation rates than those paid with a company check or direct deposit. The report concluded that informal pay systems such as payment in cash “may facilitate minimum wage and other violations, while making it harder for workers to claim their rights under the law.” [61]

Payroll cards were also a common format of pay, especially for foreign-born workers surveyed. One out of five (21%) foreign-born workers reported being paid with a payroll card, compared to one out of ten U.S.-born workers. Payroll cards typically function as a pre-paid debit card, in which a worker’s wages are deposited into a payroll card account, which can then be accessed by the worker through ATM cash withdrawals, point-of-sale purchases, and other transactions such as fund transfers. [62] Nationally, use of payroll cards as a method of paying wages is becoming more common. The format offers some clear advantages for employers, such as lower processing costs as compared to paper checks. It has some advantages for workers as well, such as immediate access to wages on payday rather than waiting to retrieve a paper check. Payroll cards can be especially beneficial for workers without a bank account, because it grants them access to banking-like activities, such as paying bills and making purchases online, without requiring the credit history, minimum balance, or identification necessary to open most bank accounts. [63]

Payroll cards can also have a number of downsides for workers. Many payroll cards have user fees, such as fees for withdrawals, balance inquiries, or transfers. [64] Nearly 70% of poultry workers surveyed who are paid with payroll cards reported being subject to fees for withdrawal, and many reported other types of fees as well. These fees can be difficult to track, especially for workers who speak limited English, and result in reduced overall take-home pay. Over half of workers surveyed (53%) who are paid with a payroll card said they were not offered a complete explanation of how to use the card, how the card differs from a bank account, and what fees the card includes. In addition to those who reported withdrawal fees, 38% of payroll card users reported that they have had money “disappear” from the card, most of which was never recovered (74%).

Not all payroll card companies impose heavy fees, and some are viewed as beneficial for expanding financial access and even as tools for increasing financial literacy. [65] However, in many cases workers are not given a choice about which card vendor to use or whether or not to accept payroll cards as their format of pay. About half of workers surveyed who use a payroll card report that they had been given the option of using a bank account instead, and only 12% of workers report that there was a vote among workers whether to accept the payroll card instead of some other form of payment.

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