By Dan Calabrese ——Bio and Archives--June 8, 2015
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His cheerleaders at the worst web site in the world call it "the most ambitious government intervention on wages in a decade," and since this is the Obama Administration we're talking about, you surely won't be surprised to know it's happening without any involvement from Congress.One key concern about expanding overtime is that it could prompt employers to reduce the number of hours that individual employees work to avoid paying time-and-a-half. McDonald’s, reportedly, already uses its computer system to record the hours worked by individual fast-food workers, and sends alerts telling franchisees to send this or that worker home when he or she is about to exceed 40 hours. In many instances reducing employees’ hours worked may endanger their eligibility for benefits. Business groups carry that reasoning further, saying the rule will reduce employment. Aloysius Hogan, a senior fellow at the conservative Competitive Enterprise Institute, said it will have a “job killing effect.” Hogan said businesses will be incentivized to lay off higher-paid executives and replace them with lower-paid workers. The National Retail Federation, a likely leader in the battle against expanded overtime, last month issued a study that came to a similar conclusion. On its release NRF senior vice president for Governor Relations David French said the rule would “hollow out middle-management careers and middle-class opportunities for millions of workers.” But Hamermesh said that to whatever extent employers reduced hours to avoid overtime the result would be more job creation, not less, since someone else must hired to perform that work. Jared Bernstein, an economic adviser to Vice President Joe Biden during President Barack Obama’s first term, added that for many workers reduced hours would be a plus: “Their salary is the same but they have more time with their families.”Every time the federal government does something like this, it demonstrates its own complete lack of understanding of labor and employment relationships. They think it's a good thing because companies, being less inclined to use overtime, would hire more people. Voila! They created jobs! But what they're really doing is taking away a company's ability to make strategic decisions about how to deploy their workforces. Overtime is usually not the result of everyday demand. It's the result of a spike in orders that reqires a short-term uptick in production. Hiring a bunch of new people to take care of a short-term uptick makes no sense, because you won't be able to afford those new, permanent workers on an ongoing basis. The use of overtime makes it possible to handle those short-term spikes without adding permanently to your labor-related overhead. With this one administrative action, the Labor Department under Obama's direction is making that maneuver much more expensive for lots of companies. And there's no reason for it. The employees who work the overtime are still getting paid for the extra hours. They're just getting their usual hourly wage, a condition to which they agreed when they took the job. This is a "solution" to a non-problem, and it's another example of the Obama Administration making it harder for American businesses to prosper. Congratulations to all of you who elected these fools. I hope you're happy with your choice. The rest of us are paying a heck of a price for it.
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