Obama's New Wage and Hour Laws Worse For Our Company Than Rising Minimum Wages

Rising minimum wages are bad enough, but generally we can offset them with price increases (remember that, though, next time you get ticked off about your camping fees going up).  As an aside, not every business is in a competitive position that they can do this.

But the new Obama Administration rules greatly scaling back on our ability to have our managers be exempt employees is far, far worse.  Because its not just money, but it changes the entire relationship between me and my managers.  Most of my managers don't want to be hourly employees (you should see the complaint emails I am getting since I announced that this is likely coming) and have pride they have moved beyond timeclock punching.  Also, I think a lot understand they are not going to make more from this, and they may even make less.  To the extent they are working overtime today (and they all are) they will not be allowed to work overtime in the future.  So I will have to hire someone else to do those extra tasks, and that person's salary is likely to come in part from what the managers are making now.

These next few months I am having all of my salaried managers fill out time sheets just for analytical purposes.  I need to know how bad this is going to be.  If you run a business, you shouldn't be waiting for next year to do something, you need to be thinking and analyzing right now how you are going to handle these rules.

I wrote a long article on this here.  Stephen Miller has more in the same vein (via Overlawyered great wage and hour news roundup).  Here is a taste:

In McCutchen's view, the administration fails to understand that "it's still the same pot of money that's available to compensate the employee," whether a worker is classified as exempt or nonexempt. So if overtime pay is required, a likely result will be to strictly limit overtime hours worked, despite the adverse effect on productivity, rather than—as the administration expects—to increase the employee's annual compensation.

While many non-executive employees view themselves as professionals and react negatively when shifted to hourly compensation, "the DOL wants nearly everyone to be nonexempt, and to sign in and clock out as do unionized workers," McCutchen contended. "They don't believe that some employees prefer to be salaried, with guaranteed pay and the flexibility to adjust when they do their work."

Postscript:  I guess I just don't understand the vision that is in the head of Progressives.  How does it help their stated goal of empowering the average Joe to convert him from a valued, up-and-coming junior manager to a 40 hour a week timeclock puncher?  How will people ever be able to migrate from lower end jobs to management positions if there are not junior manager positions in which they can demonstrate their energy and dedication?  I suppose they must believe that junior managers will still be doing the same things and working the same hours, but just earning lots of extra overtime with these new rules.  If that is really what they think, they are completely divorced from reality.

  • http://vikingvista.blogspot.com/ vikingvista

    The belief is that it will create a larger base of potential unionization. Unions are the cronies of the politicians endorsing this change.

    Ideology is useful at times, but political action is usually easier to at least more immediarely explain through special interest vote buying.

  • Justin

    I thought salaried employees could already unionize?

  • Joe

    "Postscript: I guess I just don't understand the vision that is in the head of Progressives."
    Go to HuffPost to see what the progressives believe, You may not understand why the believe as they do - but at least you will see what the believe.

    Its a believe that it is us against the 1% mentality, class warfare, corporations are evil mentality.
    Read the comments in the Huffpost on any article regarding minimum wage - it is obivious that they have a very myopic view of labor markets - No concept of the law of supply and demand.

  • http://vikingvista.blogspot.com/ vikingvista

    Think who does, not who can. Outside government, unions have been progressively unpopular among workers of all sorts, but it is among time card punchers (e.g. at Walmart, McDonald's, etc.) that unions see themselves regaining their past glory.

  • Justin

    Okay, but I don't see why someone making $50k/yr today will suddenly want to join a union tomorrow when they start making $24/hr instead. Just saying most union members are hourly doesn't mean increasing the number of hourly workers will increase union membership. There are plenty of confounding factors, and I find it pretty hard to believe that anyone would change their opinion on unions just because they have been converted to hourly.

  • http://vikingvista.blogspot.com/ vikingvista

    I agree, and I'd point to the last 50 years of nongovernmental union history as evidence. You should raise the issue with union activists.

  • http://devilish-details.blogspot.com/ mesaeconoguy

    Yep, and absolutely frightening how far left they have lurched.

    It is horrifying that an entire segment of the US population - larger than we currently understand - is against basic ideas such as private property, and right of self-defense.

    It's even more horrifying that there are Supreme Court Justices who also don't believe in those things, or in past applications of those concepts.

  • MB

    "Generally we can offset [minimum wage increases] with price increases." Isn't that evidence that your prices are too low to begin with? And that the consumer surplus is more or less coming directly from your employees' pockets? And why can't you raise prices to pay for this new employee to handle the overtime tasks? Your customers certainly don't care where the $$ are going, so I can't see why you'd be OK with the former but not the latter.

    Also, presuming an efficient market, your managers have already agreed to x (where x > 40) hours of work for y (their current salary). If you keep that same arrangement, how is anyone better or worse off (except the overhead of timeclock punching)? It's a simple algebra problem to determine the hourly wage here.

    If, on the other hand, you take the would-be OT pay and give it to your new employee, your managers at least get that portion of their day back. Since you're paying the new employee an hourly (not overtime) rate, which should be no more than the rate of your managers, they may be able to get a second job to make up the lost income as well (there's some overhead of second job logistics here, but to a first approximation, this is a wash as well).

    Yeah, they lose that coveted "junior manager" status. But, in most lower-wage positions, that's just a license for abuse and skirting around OT laws anyway (what theses regulations are trying to curb). Do your managers really qualify under the FLSA exempt rules anyway? I don't know the specifics of your business, but I know there's lots of other industries with rampant abuse of exempt employees. Common denominator? Low wages, "junior" management, and a belief that doing away with a timeclock is a sign of "respect".

  • Mike Powers

    "I guess I just don't understand the vision that is in the head of Progressives."

    What they believe is that all business owners are like Warren Buffet, absolutely dripping with cash, and the only reason that your employees don't have more money is that you're a stingy greedy meanie.

    "How will people ever be able to migrate from lower end jobs to management positions if there are not junior manager positions in which they can demonstrate their energy and dedication?"

    Well, this comes from union thinking. Everyone Is Exactly The Same, so promotion to higher levels is based entirely on time-in-grade. Working overtime means you're stealing money that another employee should be getting (or else your boss is just working you too hard; extra-pay-for-overtime is meant to be a penalty applied to employers for poor planning, not a bonus for employees for hard work.) Getting more work done in the same amount of time means you're cheating somehow; you're either getting someone else to do the work for you, or you're recklessly cutting corners instead of following procedure.

  • herdgadfly

    I don't think that you understand Warren's business. He runs much of his campsite business for government entities based upon contracts. That doesn't mean that he is always free to raise prices without consent.

    You also do not understand that his managers are older and older folks do not like to have to account for time. We old folks work on the theory that we have earned the paycheck when the work has been completed - but we do not want to be rushed. And if we have to take off every once in a while to go to the doctor, we would still like to be paid our salary.

  • joshv

    I am not entirely sure I see the noble empowerment and flexibility in cutting your effective hourly rate by being expected to work more than the normal 40 hour week without compensation. In fact, even as a manager I would prefer to be hourly. Want extra vacation? Simple, I don't get paid. Worked my ass off on a deadline project last month? Nice bonus.

    Fundamentally I see no connection between how you are paid and your dedication your work and your prospects for advancement. I know you come from Big Name consulting, where it was a mark of honor to bear up under a 70 hour a week workload for no extra pay - glad that worked out for you. Most other employers however are not in such high demand that they can expect self-flagellating masses of the 'up and coming' to work for free.

  • Jim Collins

    When it comes to the Obama Administration doing things like this, I always ask "How do the Unions benefit?"
    The push to raise the minimum wage is being sponsored by the Unions and at the same time they are pushing for the Unions to be exempt from it.
    The one thing that I can see happening here is all of those "middle management" workers are going to have to become Union members, unless they are in a "Right to Work" state. Even then they may have dues removed from their pay without their joining a Union.

  • CapitalistRoader

    Yeah, they lose that coveted "junior manager" status. But, in most lower-wage positions, that's just a license for abuse and skirting around OT laws anyway (what theses regulations are trying to curb).

    In most businesses the role of exempt and non-exempt employees are very different. Non-exempt employees' tasks are tactical: "Do these particular things and I'll give you $N for every hour you do it." Exempt employees' tasks are more strategic in nature: "Take care of this department/business unit/subsidiary in all respects and I'll give you $N a year."

    It's a fundamentally different mindset. Exempt employees have much more freedom and at the same time much more responsibility. Converting an exempt employee to non-exempt removes much of the strategic aspect from their job. They tend to revert to a "I'm just putting in my time" mentality.

  • NL7

    My guess, without reviewing their releases, is that they assume salaried workers are at risk of being pressured to work free overtime and respond to work emails on nights and weekends. If they must be on the clock to work, and get overtime, then employers will generally not pressure them.

    If they think at all about the salary and promotion effects, they likely assume that spreading the rule change over a wide swath of job classes will net out the same. Or that it will encourage employers to give raises to employees who are near the cutoff.

    Some may also be concerned with gender and parenting issues. If everybody in a job class is limited to 40 hours, then parents are at less of a disadvantage in scheduling. To the extent that women take a larger share of family duties, that effect would comparatively benefit women.

    I agree that this looks to be very frustrating for interacting with your own managers and that it's likely to result in managers working harder during their work hours, making less (to the extent they are less productive) and reporting more stress on the job. The ability to juggle your time, or even take off for an hour or two, is a big plus to being salaried at many workplaces.

  • Bruce Zeuli

    Though this discussion is about hourly, OT and salary, to me it all comes back to freedom of contract. How about we discuss our options and come up with what works best for both the employer and employee?

    Things have gotten so complicated legally and tax wise that it's hard to remember how things use to be. When I worked a factory job and was asked to work late, my OT was in cash. While in college I worked alone at night cleaning a fast food restaurant. I got paid for 8 hours even if it only took 4 (or even 1 hour if I had friends willing to help and that was OK). I have had a variety of jobs that were a combination of hourly, commission, bonus, Per-Diem and even trade of products and service.

    Did some of these options reduce the taxes burden on the business or the employee? Undoubtedly. But is that always a bad thing? The government doesn't think so. In our area, we had multiple cities fighting for a pro sports franchise. Each is out-bidding the other with zoning changes, tax moratoriums, regulation exemptions and labor concessions. Some of these breaks are for the next 20 years.

    The point is that things are so complex now, even for the smallest business, that we spend more time dealing with government mandates and less time growing our business. And that hurts both the employee and employer.

  • Jim Collins

    It may not be their choice. Some States still have the closed shop, where you either join the Union or you don't work there.

  • Mike Powers

    The issue here is that the Obama administration believes that the kind of lower-level management staff who'd be converted to hourly by this change are much more like the "do these particular things" employees than the "take care of this department" employees, and ought to be paid the same way.

    Which, y'know, given the amount of freedom and authority given to your typical shift manager at a McDonald's...it's not such a *wrong* thing to say. I mean, from what I see, a manager at a fast-food place is mostly just like any other worker except they're supposed to make sure people punch their time cards in the proper manner.

  • mx

    Exactly. At some level, there's basically no difference between the low-level salaried supervisor and the experienced worker who's been told to train the new guy except one gets overtime and the other gets fired if he refuses to work extra hours without additional compensation. Workers might feel better to be deemed "in charge," but at the end of the day, if the main difference in your day-to-day work is an extra sticker on your nametag, you're not performing strategic work.

  • joe

    NL7 - Some may also be concerned with gender and parenting issues. If everybody in a job class is limited to 40 hours, then parents are at less of a disadvantage in scheduling. To the extent that women take a larger share of family duties, that effect would comparatively benefit women.

    A couple of points - I work in an industry that it is relatively easy to measure productivity and to provide compensation based on productivity. As a general rule, women with child care duties have much lower levels of productivity than men or women without child care duties and as such receive commenserate lower compensation.
    Secondly, there is a very high marginal cost for having the lower earning spouse work continue to work when there are child care costs. From the higher tax rate, child care expenses, additional work related expenses commuting, clothing etc and the reduction earning capacity of the higher earning, the effective take home pay for the lower earning spouse is generally in the range of 20-35%.

  • MB

    "I don't think that you understand Warren's business. He runs much of his campsite business for government entities based upon contracts. That doesn't mean that he is always free to raise prices without consent."

    I didn't claim he was free to raise prices - he (generally) did. Perhaps there's contract language allowing him to raise prices in the event of minimum wage hikes, but not FLSA changes? I really don't know - that'd be pure speculation.

    "You also do not understand that his managers are older and older folks do not like to have to account for time. We old folks work on the theory that we have earned the paycheck when the work has been completed - but we do not want to be rushed."

    I'm not necessarily disagreeing (though I think you're painting with a pretty broad brush), but not sure how this pertains to whether $23k/year is a reasonable salary for a bona fide executive, administrative, or professional employee. If you want to argue for an FLSA exemption for older folks who don't like to account for time and don't want to be rushed, go for it. Or, just sit down with Warren and set your hourly wage to be equivalent to your salary now. If both parties are truly agreeable to the current arrangement, then it's just a math problem.

    In the meantime, I think it's abundantly clear to anyone who's read the FLSA exemptions and spent any amount of time in the retail or service industry that the current system is actively abused.

    " And if we have to take off every once in a while to go to the doctor, we would still like to be paid our salary."

    Presumably, Warren is only going to continue paying you your salary if you work > 40 hours a week. I suppose it's *possible* that you can get your work done in < 40 hours, but since *all* of his managers work overtime - I'd say it's unlikely.

  • CapitalistRoader

    Respectfully, I think you have a shallow grasp on a manager's duties. In addition to keeping the money rolling in, a manager's second most important job is keeping the checkbook closed, most of which includes staying within the law. On the federal side you have OSHA regulations, EEOC regulations, and Department of Labor regulations These regulations are onerous and time consuming. A manager—even the lowliest McDonald's shift manager—has to stay on top of those federal regs. Then there are state and sometimes local regulations too. Add in the rules by the corporation and I guarantee you that poor junior manager can cost the franchisee or owner a ton of money if he/she drops the ball on any one of them. Maybe even the business.

    Do a web search on the terms failure to supervise and McDonalds's for a fuller view of how a lowly shift supervisor can wreck a McDonald's restaurant.

  • James

    "Do a web search on the terms failure to supervise and McDonalds's for a fuller view of how a lowly shift supervisor can wreck a McDonald's restaurant."

    Did the search, didn't find anything interesting...care to share some links?

  • MB

    It's the larger corporations that have to be careful, as if they end up owing back wages for 20% of their workforce it's a serious chunk of change. Small businesses are either exempt from the FLSA ($500k in revenue), fly under the radar, or even if caught the penalties aren't going to be too severe - so there's a lot more flexibility at Ma's Diner than McDonald's. I don't know if that's a feature or a bug of the system.

  • NL7

    Note that I didn't say it would work or be beneficial. I just suggested motivations for such a bad policy.

    I think the people designing this system, to the extent gender equity issues were on their mind, envisioned a typical office setting where goals and productivity are less concrete and tend to focus more on hours worked than units produced. Most of these rules are more or less cookie cutter until certain industries complain for special variances. So yeah, I'm sure the rule is really bad at capturing all the different permutations of work. It's also going to look bad when it prevents some women from out-working their colleagues as a way to get ahead (a common strategy for ambitious young workers, including many women who may be angling to become CFOs and CEOs).

    I'm not sure what your comment is with regard to double-income families. Are you saying that they shouldn't write a rule to encourage both spouses to work, because it makes bad financial sense? I imagine the sort of center-left or progressive mindset that came up with this policy is probably more interested with increasing female empowerment than with strict financial improvement. I think you may also be ignoring the variability within families (e.g. job scheduling or home situations that allow for easy child care) and the possibility that working may satisfy other goals (such as employee benefits or personal fulfillment). If a job provides the family with health care or reduced tuition, then its value can be substantial. I know that partners in a partnership pay through the nose for health insurance, so an employee spouse with cheap coverage can save a tremendous amount of money.

  • Joe

    We are already seeing tremendous job creation numbers in the face of sluggish economic growth. This will probably exasperate that trend. Maybe the economy will slow further while job creation sees an additional boost. The Progressives' war on productivity continues.

  • herdgadfly

    Gosh, I hate it when people think they are smarter than anyone else. Had you read the job advertisements on Recreation Resource Management you would find that his "junior managers" are Camp Hosts, working seasonal jobs at remote campground location locations living in their own RV. Retired folks seek these jobs and come back year after year. Remote retail locations requires work weeks to vary based upon time of year, holidays and other special circumstances. You are the host day and night along with your spouse who also works for Warren. RRM has to establish a give-a-little-take-a-little trust relationship with employees because they obviously do not all live in Phoenix.

    Warren hides nothing about his not-so-normal business and has explained why one-size-fits-all rules are not always functional such as the Obamacare rules that come into play despite the majority of employees that are already eligible for Medicare.

    You say that that abuse occurs in service businesses and I say some not all. It is almost universal that Chinese and Mexican restaurants pay under the table and hire illegals. Warren wants to comply with regulations but remember that bureaucratic control of society begins and ends with impossible rules that can never apply. When you hold all the power, rules are meaningless. When rules get in the way of the Obama regime, they simply change or ignore them.

  • NL7

    I worked a number of clock jobs in my life, both retail/service and office. I prefer my off the clock jobs.

    I think you're assuming that it will be simple to arrange the new scheduling, but in many cases, particularly large corporations, there will be compliance measures. Many companies will hurry you out on time. Companies with serial problems may lock you out of computers and phones at end of shift. Company cell phones may have to be confiscated or at least modified to avoid getting work calls or emails off the clock.

    In principle, you could take as much unpaid vacation as you want. But how many jobs have you worked where that was the case? In my experience, even retail jobs expected you to show up a certain amount of time. An office job might have little patience for you taking seven weeks vacation, even if five weeks were unpaid. In practice, your boss still sets your schedule. I had a couple hourly office jobs; they expected you to come to work and unpaid vacation was not handed out freely. Your absence costs the company, even unpaid (note also that if they are paying for your health coverage, then "unpaid" vacation is not entirely true).

    In theory, you get more money to work overtime. But in practice, companies will have a budget of overtime (often zero) and won't want to let you go over. Overtime rules may mean that junior people on the clock are kept out of certain big assignments, since the company finds it easier to use slightly more senior people off the clock. So in some contexts, this may be a demotion. Of course, in many workplaces, this will also mean that clocked people must finish their same duties in 40 hours, with no flexibility to tarry at lunch and stay a little late, or to pop on the system from home to finish up. You have the same work, but fewer hours to do it.

    For some people, no doubt, this will be great. Their bosses will slack off and expect the same pace of work but for only 8 hours a day; their unpaid vacation policy will let them kick off any time; the overtime will be free flowing for any who want it; and no benefits, salaries or workplace perks will be cut even one thin dime. But for the people in that situation, with relaxed bosses and spendthrift accountants, why do we need this rule?

    If we accept the presumption that bosses and companies are untrustworthy and trying to nickel and dime employees, then shouldn't we expect that they would use this rule to reduce flexibility for junior managers, and squeeze either their compensation or productivity? If bosses suck, then why do we want to make more work rules?

  • MB

    Thanks for the refresher - I'm well aware of Warren's business, but was determined to give him the benefit of the doubt considering his talk of "junior managers" proving they are "worthy of promotion".

    If those "go-getters...impress[ing] management with their diligence and dedication" are actually Camp Hosts, I can't see how they would qualify under the *existing FLSA exemptions*. I also don't see how a retired Camp Host would prove his mettle and dedication and work his way up to a promotion - but that's a different topic.

    There's three main exemptions:

    - an executive[1] who's primary duty is "managing a customarily recognized department", who "customarily and regularly directs the work of at least two or more FTE", with "the authority to hire or fire other employees"? It seems a stretch, but not out of possibility, to call a campground a department. I doubt the 2 FTE test could be met though.

    - a professional[2], whose "primary duty is the performance of work requiring advanced knowledge which is predominantly intellectual in character", "in a field of science or learning", "customarily acquired by a prolonged course of specialized intellectual instruction"? Can't see how this is even close.

    - administrative[3], whose "primary duty must be the performance of office or non-manual work", "including the exercise of discretion and independent judgment". Seems the non-manual work would disqualify this one.

    I'll skip the outside sales and computer exemptions, as I think we can agree those aren't applicable.

    I would also note that there's revenue, seasonal, irregular hour, and independent contractor carve-outs that seem like a more natural fit here - but I don't see how the proposed rule change would affect any of those so they must not be available to Warren for some reason or other. I'd also note that there have been at least some FLSA violations alleged by camp hosts, who seem to normally be classified as non-exempt.

    Now, if you disagree with the premise of the FLSA to begin with, that's a different topic. Here, we're discussing the proposed salary threshold change from $23k/year to ~$50k/year and the impact to Warren's business and employees (and, by extension, to other businesses and employees).

    [1] http://www.dol.gov/whd/regs/compliance/fairpay/fs17b_executive.pdf
    [2] http://www.dol.gov/whd/regs/compliance/fairpay/fs17d_professional.pdf%5B3%5D http://www.dol.gov/whd/regs/compliance/fairpay/fs17c_administrative.pdf

  • NL7

    Working variable hours is not "working for free." If you call a company to complain about a product or service they delivered that was somehow sub-par, is that "for free" or is good customer service part of what you expect when you paid the purchase price? Just because multiple components are bundled together under one price doesn't make them "for free."

  • Mike Powers

    Oh, he's got *responsibilities*. But does he have *authority*? Like, does the shift manager get a say in the business decisions about which menu items to carry, what advertising to put up, whether to get new furniture or just re-paint the place? Does he make hire/fire decisions, or set schedules?

  • mlhouse

    The real answer to why this is a problem FOR THE EMPLOYEE is that the hours that you are putting in "for free" are the hours you will earn even bigger money on once you move up the ladder of an organization. This decision is just eliminating your chances of earning distinction to gain those opportunities and making them all clock punchers.

    Lastly, my guess is that this is the feature that attracts the progressives to this issue. By turning the entry level management talent into clock punchers they are eliminating the meriticocracy that they despise and improving the affirmative action balance of the corporate workforce.

  • CapitalistRoader

    Burford v. McDonald's Corp.: failure to supervise
    McDonald's Corp. v. Ogborn: failure to supervise
    Lewis v. Golden Hawk LLC: failure to supervise

    For every lawsuit there are probably one hundred others settled out of court.

  • CapitalistRoader

    Does a lower level accounting supervisor at Nissan's Smyrna factory get to decide what engines will be offered, what social media outlets to advertise on, and when to put in a new assembly line? That's ridiculous. Those are staff level decisions, not low level supervisors'. But I'm guessing low level McDonald's supervisors have quite a bit of say over hiring and firing, and almost certainly set other employees' schedules. See, there's no HR manager down the hall when working the third shift at McDonalds. You're there all by yourself, supervising two or three or five employees. An idiot and/or untrained supervisor could get you into a whole lot of legal trouble.

  • tex

    I'm for ya, Josh. I just don't want the gov making rules that disallow me to choose otherwise. I've always sought satisfying work in total, remuneration, conditions, the work itself, etc. I think all, including you, should seek the work that floats your boat too, and not force others to toe your line, my line, or anyone's line but betwixt themselves & one who might engage them.

  • Another_Brian

    I guess I just don't understand the vision that is in the head of Progressives.

    The bit you quoted explains exactly what is the vision:

    "the DOL wants nearly everyone to be nonexempt, and to sign in and clock out as do unionized workers," McCutchen contended.

    If you can't get WalMart employees to unionize, then you create legislation that effectively unionizes WalMart employees.

  • Mike Powers

    "I'm guessing low level McDonald's supervisors have quite a bit of say
    over hiring and firing, and almost certainly set other employees'
    schedules."

    You're guessing. Meaning, you don't *know*. Having worked in that area, I can tell you that the shift manager position only exists because corporate management doesn't feel that hourly workers can be trusted with keys.

  • CapitalistRoader

    You're right, Mike, I don't know. I've never worked at McDonald's. I progressed from hourly to low-level supervisor to mid-level management in medical device manufacturing and I can only tell you about my own personal experience.

    Someone else pointed out in this thread that low-level supervisor jobs are the the first rung of the ladder in corporate America, and converting those jobs to hourly will tend to cut off that path to advancement. I'd carry that sentiment further by theorizing that low level managers, having had a taste of responsibility and success, eventually go on to start a big percentage of new businesses. Considering that the number of business startups is at an historical low, Obama's new rules are just another nail in the coffin of the economy.

  • Mike Powers

    The thing you need to remember here is that the Obama administration is not thinking about people like you when they make these laws. They're thinking about shift managers at McDonald's.

  • bannedforselfcensorship

    or reddit.

  • bannedforselfcensorship

    Anytime you raise prices you risk losing business.

  • bannedforselfcensorship

    When I worked fast food, the shift manager was in charge of you, the hourly worker.

    "Go clean the toilets, then start the frier."

    A bit more than just being trusted with keys.

  • CapitalistRoader

    The Obama administration is pandering to the unions, just as minimum wage laws pander to the unions. Unions throw hundreds of millions of dollars at Democrats and they expect a return on their investment. That great Progressive, Woodrow Wilson explains:

    If the government is to tell big business men how to run their business, then don't you see that big business men have to get closer to the government even than they are now? Don't you see that they must capture the government, in order not to be restrained too much by it? Must capture the government? They have already captured it.
    The New Freedom (1912)

    Of course, the AFL wasn't much more than a collection of guilds back then, not nearly as powerful as they were later, and the CIO didn't even exist, but what Wilson said about big business back then certainly also applies to unions today. Unions have captured the Democratic Party.

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  • sailor116

    Well, you end up with two competing groups:
    1) People who would vastly prefer to be hourly, but who are salaried because the employer is doing it to save money. Which, let us say, is usually the goal. Those include the typical low-level manager who gets a salary of $30k for working 60 hours/week with potential (but no guarantee and probably a low possibility) of advancement. This may be an opportunity to earn more than the $24k/year employee who gets $12/hour... but on the other hand, there's something a bit difficult about the concept that said manager would end up making LESS on an hourly basis.

    Anyway, group 1 would benefit from the change.

    2) People who would really like to do management level work, on their own time, on their own schedule. Also known as "people who work for unusually good employers." group 2 will be hurt by the change.

    I'm not so sure that the harms to group 2 outweigh those from group 1.

    That said, though, I think that you could get partway there through other means.

    Here's a better goal: "Below a certain earning threshold, and with some apprppriate averages and wiggle room, people shouldn't be earning less per hour than the folks who they supervise."

  • Not Sure

    Here's a better goal: "Below a certain earning threshold, and with some apprppriate averages and wiggle room, people shouldn't be earning less per hour than the folks who they supervise."

    Even easier- don't take a job if you don't like the conditions and terms of employment.

  • markm

    "How does it help their stated goal of empowering the average Joe to convert him from a valued, up-and-coming junior manager to a 40 hour a week timeclock puncher?"

    The actual goal is the opposite of the stated goal, as usual with progressives.