Let's Fix This Country

Overtime Pay at Last, But Judge Yanks It Away »

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.

the economy

Minimum Wage Deniers Still Fighting Reality »

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… Read More »

the economy

Congress Votes a Cut in the Minimum Wage »

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,… Read More »


Let’s Permanently End Minimum Wage Stupidity »

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… Read More »

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Biden Wants a $15 an Hour Minimum Wage. Good Idea? »

Feb 17 2021

With Republicans in control of the Senate for the last six years, and Mitch McConnell thwarting its consideration, raising the national minimum wage ceased to be a topic. That has left the minimum stranded at $7.25 since 2009, equating to… Read More »

Fast Food’s Profit & Loss »

How the minimum wage translates Aug 4 2015

Anthony Puzder, CEO of CKE Restaurants, the parent company of Hardee's and others, provides some data to work with in this Wall Street Journal op-ed. His typical franchised restaurant employs 25 people and earns about $100,000 a year in pretax profit—about 8% of the restaurant’s $1.2 million annual sales. To the 24 employees other than the manager, he attributes 75% of the profit — about $3,125 an employee. If minimum-wage crew members working 25 hours a week received a 40% raise, they would earn an additional $3,705 a year. That is $580 more than what the employee contributes to the restaurant’s profits.

First, let's point out that the $3,125 works out to be 52 weeks; no one gets time off, apparently. At minimum wage Mr.Puzder's part-timers make $9,425 a year. At a 40% increase (to $10.15 an hour) that would become $13,195. One can only hope that they have second or third jobs. Even at full-time they'd only earn $21,200.

These are unlivable wage rates that force people into public assistance. So what Mr. Puzder is really telling us is that we're fooling ourselves to think cheap food is a bargain, because we're paying the rest of its true and hidden cost to the government.


Wikileaks Exposes Trade Deal You’ve Never Heard Of »

50 countries are plotting in secret Jun 30 2014

In February, in “Corporations Press for Power Grab in Pacific Trade Pact”, we reported details of the Trans-Pacific Partnership (TPP), the most wide-reaching trade pact in history, the terms of which have been decided in secret. We showed that only 5 of its 29 covenants are concerned with typical trade rules such as tariffs and quotas and that the rest are designed to hand multinational corporations powers greater than held by their own… Read More »


Applying the Brakes to Super-Fast Trading »

We said it before: A tax would restore market sanity Apr 15 2014

“The United States stock market, the most iconic market in global capitalism, is rigged”, said Michael Lewis on “60 Minutes”. The perennially best-selling author was promoted his latest book, “Flash Boys”, which tackles the subject of high-speed trading.

It’s a topic we dealt with a year and a half ago in this article, when inadequately vetted code at trading firms or exchanges had caused a trio of market plunges such as the 2010 “Flash Crash” in which a market drop… Read More »


Food Stamps, Meet the Minimum Wage »

One high, the other low. Congress never makes the connection Feb 24 2013

Food stamps come in for particular ire from some. Over 46 million Americans pay for their groceries with federal food stamps. Half of the mouths that food stamps feed belong to children. It is a 40-year-old program (renamed “Supplemental Nutrition Assistance Program” or SNAP) but only in recent years has it ballooned to one in seven people, currently costing taxpayers $72 billion a year.

The rapid increase owes partly to the weak economy that has followed the financial crisis of 2008, but also to a loosening of the eligibility rules to… Read More »

the economy

A Changing World Says Inflation Is Here to Stay »

Apr 4 2022

"Make no mistake, inflation is largely the fault of Putin”, blurted President Biden. Perhaps he meant only gasoline. "These are not Putin gas prices. They are President Biden gas prices", retorted House Minority Leader Kevin McCarthy, as if the president… Read More »


White House Acts to Thwart Overtime Abuse »

Making good on a pledge of two years ago May 31 2016

Changes in overtime rules announced by the Obama administration have businesses in an uproar. Currently, they are required to pay extra for overtime only to workers who are paid a salary of less than $23,660 a year ($455 a week). That threshold is set to soar to $47,476 ($913 a week). Come December 1st, anyone earning less than that doubly high threshold becomes eligible for time-and-a half pay for work in excess of 40 hours a week. The rule does not apply to those whose work is classified as executive, administrative or professional.

Businesses complaining the most are those paying little more than the current $455 threshold while requiring more than 40 hours of work for no extra pay. In the… Read More »

the economy

How the Sharing, Gig Economy Is Taking Its Toll on America’s Workers »

Aug 18 2015

American workers are under siege, battered by mercenary business practices, eroded legal protections, and even new laws meant to help
but hurting instead. The long decline of unions has left the worker standing alone, powerless against employers that, over an equally long span, have come to be all-powerful corporations rather than shops on Main Street.

That leaves fighting back to grass roots, such as the demonstrations demanding pay raises from fast food businesses that began in New York City. Campaigns to raise the minimum wage have met with success in states and now cities are boosting the minimum (see "Minimum Wage Mania..."), but there are a number of other forces that are squeezing… Read More »

the economy

Minimum Wage Mania, As Reactionaries Argue Against Any Change »

Aug 7 2015

$15 an hour minimum wage laws have suddenly sprouted all over the country. What began as an experiment, limited to a couple thousand employees at the Seattle area airport, spread to Seattle itself last year, recently to the enormity of Los Angeles, and is now close to happening to major fast food chains across all of New York State. Chicago and Kansas City are adopting wages of $13 an hour. Other cities are considering. The sudden surge is a profound grass roots triumph.

The leap to $15 an hour — instead of the $10.10 President Obama has lobbied for —… Read More »


New Republican Thinking Would Overhaul Safety Net »

Approach focuses on increasing upward mobility Mar 20 2014

After gaining the majority in the House of Representatives in the 2010 election, Republican strategy has been to gridlock every Democratic initiative, enough to earn them the sobriquet of “The Party of No”.

But think tanks on the right and some of the more prominent figures in the Party have come to realize that simply accusing the left of “class warfare” every time the subject is raised will not quell the growing anger over income and wealth disparity and stranded mobility.

But their solution is certainly not to amplify current government programs. On its 50th anniversary, they point to Lyndon Johnson’s “War… Read More »

the economy

What’s Come Over America? »

Is it tough love or genuine contempt for our fellow citizens? Jan 13 2014

It would seem that Americans have suddenly adopted a stern view of our own people as irresponsible and indolent and that we've decided to exact harsh measures, all at once, that are causing widespread economic hardship.

Congress stripped food stamps from the farm bill and the House wants to cutUpdate: The 5-year farm bill, just signed into law, trimmed the $40 billion proposed food stamp cutback to $8.6 billion

back the program by $40 billion across 10 years, estimated to bump 3.8 million families off the rolls.

House Republicans unanimously rejected an increase in the minimum wage last March leaving it over 30% below what it was in 1968. Pressure mounts to raise the hourly rate… Read More »

the economy

Socialism? They Must Be Kidding »

Mar 17 2013 This riveting video turns the income and wealth of all strata of Americans into a vivid set of graphics that is nothing less than astonishinng in showing how badly skewed is America in favor of a small segment of our society.

Not to be missed (sound on). This is one case where we all really should forward this to everyone we know to get rid of the nonsense we hear about creeping socialism. We are in the midst of the extreme opposite.