Dego (Day-go) is a term used to refer to people pf italian descent, because when italians immigrated to the united states and worked under the irish they wanted to get paid as the "day goes" by intstead of at the end of the week, so you get dego.
The word 'dego' stemmed from Diego, who was Christopher Columbus' son. The actual spelling, that no one uses any longer, is D'ego. It is not derogatory, if you are educated and realize from where and why that terminology originated. It has NOTHING to do with being 'paid as the day goes.'