Jan 9 2017
President Obama had announced his plan almost three years ago, as we recounted then. He would update a long-neglected labor law to equitably improve the lives of an estimated 4 million American workers. It almost happened.
The 1938 Fair Labor Standards Act sets a wage threshold under which employees are paid an hourly rate and are owed extra pay for overtime work. Above that threshold, they are considered administrative or managers to be paid a fixed salary no matter their hours. Clearly, the intent of the law is to prevent exploitation of low-paid workers.
Trouble is, no adjustment whatever has been made to that threshold since 1975. So the threshold below which overtime pay is due has been stuck at a meager $455 a week $23,660 a year. Everyone earning more than that is a "manager". Employers are free to extract extra hours from them without paying a nickel. Refuse and they may find themselves on an unemployment line.
In the 1970s, some 65% of workers were entitled to overtime. With the manager threshold driven downward by inflation, only an estimated 7% are paid so low that they qualify for overtime pay. It should be clear that the other 93% are not members of management.
So Obama decreed that the threshold should become $913 a week $47,476 a year and the Labor Department's inflation calculator says that the level should be higher still. Everyone under that must be paid for overtime work.
The change was to have taken place December 1, but a Texas judge stepped in only 10 days before, calling a halt in answer to a consolidated lawsuit from the attorneys general of 21 Republican-led states, business groups, and the business lobby the U.S. Chamber of Commerce. The judge ruled that the Obama administration had overstepped its authority, that overtime eligibility cannot be decided by the wage level alone. The law does not agree. The wage level unequivocally controls whether overtime is due, says this source.
The injunction is temporary as the court reviews the case further, and the Labor Department would certainly appeal, but with the Trump presidency taking over, and a new labor secretary who is against raising even the minimum wage, Obama's initiative is as good as dead. An intriguing question is how this will be met by those who voted for Donald Trump on the promise of his improving their livelihoods.
Obama's regulation may have done a small amount of good even though it never took effect. Expecting the law change December 1, employers had gone ahead to instituted changes. They have been inclined to elevate to $47,476 the paychecks of employees already paid anywhere near that so as not to have to pay them overtime. Walmart did so, for example.
Almost all other workers remain stranded earning a fixed salary. It will still even be possible for an employer to force enough unpaid overtime that a "manager" is paid less than the minimum wage when that salary is divided by hours worked. Incoming Labor Secretary Andrew Puzder, whose annual compensation as CEO of a restaurant chain is thought to have been around $4 million, thinks workers prefer the low overtime cutoff; it's worth giving up the extra money, he says, for the prestige of being viewed as a manager.
"If you want to end poverty, just give people money"
Jun 17 2016
With growth stalled at 1.5%, with wages flat for decades and household income $4,000 less than when Bill Clinton left office, with a Federal Reserve survey finding
that 46% of Americans could not cover a $400 emergency expense without borrowing or selling something, here's an idea that's often floated. How about the government just paying everyone a basic income every year?
That surely must top the list of nutty ideas that bleeding-heart liberals have come up with.
Except they didn't. It's a Republican scheme, going back at least to Richard Nixon and Milton Friedman before him. Nixon proposed in a 1969 address on domestic programs that "the Federal Government build a foundation…
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Mar 10 2016
Another seventeen states either increased their minimum wage at the start of the year or are scheduled to do so during 2016. That's in addition to 22 states last year, with an overlap of 14 that are ratcheting up their rates two years in a row.
With the American public strongly in favor of giving America a raise, as Obama has put it, one would think Republican candidates would be declaring their support for bigger paychecks to gain votes, yet they and conservative editorial pages staunchly argue to keep the minimum where it is at $7.25 an hour, unchanged from 2009 and with no concern that inflation has already taken $.75 out of its buying power in the years since.
Marco Rubio called raising the minimum wage "a disaster". Jeb Bush says leave it where it is. Ben Carson at first was in favor of raising it an unspecified amount, then joined the pack saying it would be misguided to raise the wage. "Every time we raise the minimum wage, the number of jobless people increases", which ignores the…
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May 11 2014
Members of Congress go to Washington pretending that they represent us. They are instead effectively hirelings of lobbyists and industry who pay for their campaigns. Thus, do polls show that close to 90% of Americans want background checks before a gun can be sold, but Congress refused to act.
And so it is with the minimum wage. A January Pew Research poll said that 73% of Americans (including 53% of registered Republicans) favor raising the base wage, but Senate Republicans used the filibuster to block even debate and a few Democrats voted with them. For that matter, if the 60-vote filibuster hurdle had been surmounted, the bill to raise the wage to $10.10 an hour stood not a chance against the Republican majority of the House.
The minimum wage law has never tracked inflation. So what Congress has let stand by its inaction is a decline in the minimum wage. Since 2009,…
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Jul 29 2013
Workers at fast food chains have been rebelling against their low wages. There have been demonstrations and one-day strikes in seven cities against McDonalds, Burger King, Taco Bell and Domino’s Pizza, with employees typically demanding that wages rise to $15 an hour. The movement is growing and has attracted financial support from unions, even though organizing the nation’s four million fast food workers is not an expressed plan.
In Washington, D.C., Wal-Mart threatened to cancel building six stores when this July the city council passed a “living wage”measure that would require the giant chain to pay wages of $12.50 an hour.
Wal-Mart Wins Again: Sept 11: The D.C. mayor vetoed the bill that would have required Wal-Mart to pay $12.50 an hour calling it a "job-killer".
Workers are reminded constantly of the huge pay increases awarded the heads of their companies, but have seen no upward movement in their own paychecks for years.
Their plight is now made worse by the growing practice of fast food and other retail businesses putting payroll on plastic cards to save money on printing checks. The research firm Aite Group says that in 2012, dozens of major companies filled 4.6 million payroll cards with $34 billion in 2012 and expects those counts to double by 2017. In order to get their…
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