Spinning Overtime

Democratic politicians are accusing the Labor Department of cutting overtime benefits for American workers by modifying the rules on overtime compensation. Under the Labor Department’s new rules, 1.3 million low-income workers will now benefit from overtime protection.

One would think this would be a lauded by the supposedly "pro-labor" Democratic Party. Of course, that isn’t true.

The Democrats are touting a flawed study by the union-financed hard-left Economic Policy Institute that claims that 8 million workers would lose overtime under the plan. The study is based on the assumption that every single employee who would no longer be covered under federal overtime rules. However, this assumption is patently false. These rules would specifically not apply to union members, who are contracted under collective bargaining agreements, nor would many employers necessarily terminate overtime benefits. Employers are concerned with the bottom line, and the costs of training new workers would far overshadow the costs of maintaining current overtime benefits for most workers.

Furthermore, these rules primarily effect workers making more than $65,000/year. By the Democrats’ reckoning, it is perfectly acceptable to sock these same people with confiscatory tax rates because they make too much money, but potentially cut their ability to make money above and beyond that salary and suddenly these people are members of the Poor and Downtrodden(tm). The double standards and contorted logic of this position are beyond all belief.

The changes to the Fair Labor Standards Act are badly needed to preserve worker’s flexibility and their ability to negotiate better contracts for themselves. These rules changes would extend overtime benefits to low-income service workers that badly need such benefits. This is a move that should have the self-proclaimed champions of the "working poor" celebrating. Yet the reactionary nature of the Democratic Party trumps both common sense and consistency.

5 thoughts on “Spinning Overtime

  1. The rabidly anti-labor Bush administration would not be proposing these overtime changes if they didn’t stand to benefit the usual constituency blocks that just spoon-fed him $34 million in six weeks, and the spokeswoman for the retail industry would not be embracing the legislation if they thought it would increase their overtime costs. Sensible people can smell a rat when it’s climbing their pant leg, as the unions and Congressional Democrats recognize by opposing this assault on the 40-hour workweek.

    The only one spinning here is you by suggesting that the bone thrown to low-wage employees is the main goal of this order instead of limiting the overall overtime cost burden for business, which would clearly be the new reality if $23,000 a year employees can be declared executives. It’s curious how two weeks ago you were lauding the oppressive hand of government devastating the small business climate, but now are supporting new overtime regulations which would supposedly impose added labor costs to these businesses and their low-wage employees. Talking out of both sides of your mouth isn’t gonna go undetected with me around.

    Clearly, this is a means to an end for Bush’s corporate constituency, much like free trade agreements were a decade ago. The exodus of jobs overseas didn’t happen overnight, but the painlessness of the trade laws make it so much more cost-efficient to take advantage of the situation that it becomes the natural long-term direction of the business culture. The same can be said about this law. When hiring a new employee that would otherwise qualify for overtime compensation, it just makes so much more sense for the employer to declare them an “executive” to avoid paying overtime for their 55-hour workweeks. Before we’ll know it, overtime will be obsolete for anyone making over $23,000 a year….and if the least bit of whining of “oppressiveness” from the retail and fast food lobby ensues, expect the $23,000 threshold to be lowered or erased as well.

  2. You do realize that you can use that brain for something other than rehashing talking points from the DNC?

    Your argument essentially boils down to "if Bush does it, it can’t be good". That sort of thinking is exceptionally simplistic.

    There will probably be some cost to the new rules. However, those costs are offset by the streamlining of regulations as well as the increased flexibility it brings to workers. (For example, in many of the cases workers can choose to use flex-time or comp-time rather than taking overtime.) Most employers do offer some kind of overtime simply because the market demands it, and it’s unlikely to effect most small businesses. What it will effect are people working in the service industry who badly need overtime protection. In terms of a cost/benefit analysis, this legislation’s costs are outweighed by its benefits in terms of increased productivity.

  3. I understand that most states have laws against improper classification of employees as “manegement” or “executive” specifically to avoid overtime payment.

    If you’re not doing the work of an executive, you’re not one, no matter what your company calls you. Even if they say you’re a “trash collection executive”, you’re still a garbage man (or woman) and you must be paid overtime for hours over 40 a week.

    What it does do is confuse employees and prevent them from seeking the overtime payments their legally entitled to under the law. Even if there’s not a law per se in your state you can still sue for owed overtime.

  4. The Bush administration is going to protect the interests who butter his bread, recently to the tune of $34 million in six weeks. Bush would not take all this money from the business lobby and then burden them with an onerous overtime burden if that burden wouldn’t ultimately work to their advantage. Clearly, the rest of my argument went well beyond criticizing the plan based on the fact that Bush supports it.

    Companies do not offer overtime because the market demands it, they dodge overtime costs through market forces such as numerous loopholes that help them avoid biding by the 40-hour workweek for all workers. It was the work of unions to establish the 40-hour workweek and compulsory overtime compensation….and the decline of these institutions has directly coincided with the decline of union affiliation. The “flex-time” and “comp-time” provisions give even more leverage to water-down this institution that provides necessary balance to the market forces that would work everyone into the ground if they didn’t have organized labor obstacles preventing them.

    And therein lies the truth of why this policy has your backing. Even though you respond with a yawn and a shrug when reminded of the plight of the working class in terms of job erosion and increasingly regressive tax burdens, you expect your readers to believe that you actually view them as more than warm bodies on the storeroom floor when it comes to overtime compensation…that the devastating costs of doing business you claim are squeezing small businesses into pulp can take on these extra labor costs without any problems. I’m not buying it.

    Your true intentions were revealed in your final sentence, indicating that you believe increased peasant work hours will “increase productivity”, which reduces them right back to the sets of hands you normally see them as. In other words, you perceive that lower-wage retail employees even on time-and-a-half are still gonna make their bosses more money than if they run their stores full staff and hire more employees. This entire arrangement creates a disincentive to abide by a 40-hour workweek, putting “productivity” on a level of greater importance than human life in a very slick and calculated manner. However, I suspect many of the supporters of this policy will be the first ones howling about the moral bankruptcy of the younger generation who are being improperly raised by parents who are on “mandatory overtime” every week of the year.

  5. I’d be more concerned about overtime if American jobs weren’t heading right overseas. That’s what companies are doing with their tax breaks, apparently – finding new ways to cut costs by outshoring jobs.

    So much for lower taxes stimulating the economy, I guess. All it seems to be stimulating is unemployment for Americans.

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