by McGuire | June 2, 2016 4:50 pm
If you take a hard look at the numbers, there is really only one person that makes good economic sense for President. Here’s the breakdown.
Via William Teach:
We’ve already seen the news that Team Obama plans on changing OT rules for salaried private sector employees, utterly failing to understand that things do not stay the same in response to government regulations. Today, O speaks on this
(White House) Things like the 40-hour workweek and overtime are two of the most basic pillars of a middle class life. But for all the changes we’ve seen in our economy, our overtime rules have only been updated once since the 1970s. Just once. In fact, forty years ago, more than 60 percent of workers were eligible for overtime based on their salaries. But today, that number is down to seven percent. Only seven percent of full-time salaried workers are eligible for overtime based on their income. (he mixed in two different metrics)
That’s why this week, my Administration took a step to help more workers get the overtime pay they’ve earned. The Department of Labor finalized a rule to extend overtime protections to 4.2 million more Americans. It’s a move that will boost wages for working Americans by $12 billion over the next 10 years. We’re more than doubling the overtime salary threshold. And what that means is, most salaried workers who earn less than about $47,500 a year will qualify for overtime. Or, their employers can choose to give them a raise so that they earn more than $47,500. Or, if employers don’t want to raise wages, they can let them go home after 40 hours and see their families or train for new jobs. Any way you slice it, it’s a win for working families. And we’re making sure that every three years, there will be an automatic update to this threshold – so that working families won’t fall through the cracks for decades at a time ever again.
This is the single biggest step I can take through executive action to raise wages for the American people. It means that millions of hardworking Americans like Elizabeth will either get paid for working more than 40 hours, or they’ll get more time with their families. Either way, they win. The middle class wins. And America wins.
Except, things won’t work out the way this guy, who has never had to actually run a business, thinks, as Andy Puzder, CEO of CKE Restaurants and a member of the Job Creators Network, tells us
(Forbes) The real world is far different than the Labor Department’s Excel spreadsheet. This new rule will simply add to the extensive regulatory maze the Obama Administration has imposed on employers, forcing many to offset increased labor expense by cutting costs elsewhere. In practice, this means reduced opportunities, bonuses, benefits, perks and promotions.
Perhaps the biggest consequence of the rule is that it will cause some employers to reclassify salaried employees as hourly, and set schedules so they can more easily track hours worked and avoid excessive claims for overtime. For example, taking a manager’s current salary and allocating it across 45 hours (with 5 hours of overtime pay) will result in no increased labor expense or increased salaries. However, it would mandate five hours of overtime, rather than allowing managers to take advantage of the flexible schedules they currently enjoy.
Flexible schedules, you say?
For example, he testified that there were times when “local events – such as conventions – provided significant business opportunities with significantly higher customer demands.” Williams was able to allocate more time to his restaurant and “take advantage of that opportunity” because he managed his own schedule unconcerned about getting approval for working the overtime hours the business required. On the personal side, there were also “times when business was slow” and he “was able to spend additional time with [his] family, raise [his] three daughters, attend school functions, work with [his] church, and take vacations.”
That kind of flexibility will go away. These people will be on the clock. The salaries will be reduced to cover the OT potential, and perks will disappear. As Puzder ends “you cannot regulate your way to economic prosperity.” This will hurt Middle Class folks.
Crossed at Pirate’s Cove. Follow me on Twitter @WilliamTeach.
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