So, Obama has recently proposed an increase in the minimum salary
required to bypass FLSA overtime regulations. The cap was around $23,000
and started in December, will be $47,000 or so. This is a measure that I
highly applaud, and would like to see much more of from democrats, but,
as you can expect, businesses are whining and moaning over it. They do
this with EVERY regulation, and every increase in wages, taxes, etc. I’m
not buying it.
What the problem was
Okay, so, salary works like so. Instead of working for an hourly wage, people work for a set amount of income no matter how many hours they work. This makes sense in some situations. High level executives often put their heart and soul into their company, and work long hours or inconsistent schedules. Their work becomes their life, which is okay in some of these situations because workers are really passionate about it and they make VERY good money (6+ figures). Or, imagine you have a software developer with inconsistent schedules. Some times, during off season, they work 20 hours a week, but then at crunch time, they work 60+. Basically, these guys earn the same pay regardless of how much they work, which makes sense since you need a consistent stream of money even if your work is not very consistent. These kinda of situations make sense.
However, employers were using the concept of salaried employment to skirt overtime regulations. Whereas rank and file retail and food service workers worked an hourly wage, managers often worked much, much longer hours while earning low pay. I’ve seen openings at places for managerial positions at retail and food service places that only wanted like $25-35,000 a year. It was ridiculous. Glassdoor and Indeed reviews would point out that these guys work like 60+ hours a week. This is effectively slave labor. These guys aren’t earning much, but they spend literally just about their entire waking lives working. Imagine putting in 10 hour days every day, or 12-14 hour days with only a day off here and there. Imagine not being able to plan any life outside of work because you may always be needed. This is the position these guys were in.
Basically, what Obama’s updated regulation would do is say, look, you wanna skirt overtime regulations? Then pay your workers. Period. Don’t pay them $23,000 a year, which is basically the equivalent of an $11/hour full time hourly position. Pay them GOOD money. $47,000 is even a little low to me. I would’ve liked to have seen it at $60-70,000, but $47,000 is still a respectable middle class salary if you’re in the tech industry or working middle management.
But but…muh profits!
Of course, employers are going to hee and haw over this. They oppose any regulations like a stubborn mule resists its owner. They discuss horror stories of layoffs and price increases. They make the idea of paying workers a decent wage and treating them like human beings as apocalyptic. Prices will rise, unemployment will go up, they might even shut down! And what about the small business owners! Think of the small business owners!
As someone who is very much a fan of FDR, my approach to this is the same to his. FDR thought that businesses that could not incorporate paying their workers a living wage into their business model did not deserve to be in business. Period, end of story. I’m going to take a similar approach here. You’ll live, 1%ers, you’ll live. Most wage increases, looking at history, are met with very little unemployment compared to the general boom and bust of the business cycle. We’ve raised the minimum wage dozens of times. I don’t think raising salaries for salaried workers is going to kill them. And yes, sometimes businesses increase prices a little, but let me put it this way, would you rather pay $2.50 for a hamburger and make $23,000 a year, or $3.00 and make $47,000? Is it bad to pay, say, 20% more in prices if your pay doubles? Heck no, you’re still way ahead. 200/120 would say that you still have 67% more money in your pocket. Price increases aren’t what matters as much as purchasing power in the economy, which is being able to get the most out of the number of dollars you have. And if you bust your salaried workers to hourly and pay them similarly, then they have so much more time for, you know, work life balance, which is a great thing.
All in all, I have to applaud these regulations, and I’d love to see more similar regulations that boost the power of labor and the living standards of the working class. We need more of this in Washington. More good regulations that make workers’ lives better.
What the problem was
Okay, so, salary works like so. Instead of working for an hourly wage, people work for a set amount of income no matter how many hours they work. This makes sense in some situations. High level executives often put their heart and soul into their company, and work long hours or inconsistent schedules. Their work becomes their life, which is okay in some of these situations because workers are really passionate about it and they make VERY good money (6+ figures). Or, imagine you have a software developer with inconsistent schedules. Some times, during off season, they work 20 hours a week, but then at crunch time, they work 60+. Basically, these guys earn the same pay regardless of how much they work, which makes sense since you need a consistent stream of money even if your work is not very consistent. These kinda of situations make sense.
However, employers were using the concept of salaried employment to skirt overtime regulations. Whereas rank and file retail and food service workers worked an hourly wage, managers often worked much, much longer hours while earning low pay. I’ve seen openings at places for managerial positions at retail and food service places that only wanted like $25-35,000 a year. It was ridiculous. Glassdoor and Indeed reviews would point out that these guys work like 60+ hours a week. This is effectively slave labor. These guys aren’t earning much, but they spend literally just about their entire waking lives working. Imagine putting in 10 hour days every day, or 12-14 hour days with only a day off here and there. Imagine not being able to plan any life outside of work because you may always be needed. This is the position these guys were in.
Basically, what Obama’s updated regulation would do is say, look, you wanna skirt overtime regulations? Then pay your workers. Period. Don’t pay them $23,000 a year, which is basically the equivalent of an $11/hour full time hourly position. Pay them GOOD money. $47,000 is even a little low to me. I would’ve liked to have seen it at $60-70,000, but $47,000 is still a respectable middle class salary if you’re in the tech industry or working middle management.
But but…muh profits!
Of course, employers are going to hee and haw over this. They oppose any regulations like a stubborn mule resists its owner. They discuss horror stories of layoffs and price increases. They make the idea of paying workers a decent wage and treating them like human beings as apocalyptic. Prices will rise, unemployment will go up, they might even shut down! And what about the small business owners! Think of the small business owners!
As someone who is very much a fan of FDR, my approach to this is the same to his. FDR thought that businesses that could not incorporate paying their workers a living wage into their business model did not deserve to be in business. Period, end of story. I’m going to take a similar approach here. You’ll live, 1%ers, you’ll live. Most wage increases, looking at history, are met with very little unemployment compared to the general boom and bust of the business cycle. We’ve raised the minimum wage dozens of times. I don’t think raising salaries for salaried workers is going to kill them. And yes, sometimes businesses increase prices a little, but let me put it this way, would you rather pay $2.50 for a hamburger and make $23,000 a year, or $3.00 and make $47,000? Is it bad to pay, say, 20% more in prices if your pay doubles? Heck no, you’re still way ahead. 200/120 would say that you still have 67% more money in your pocket. Price increases aren’t what matters as much as purchasing power in the economy, which is being able to get the most out of the number of dollars you have. And if you bust your salaried workers to hourly and pay them similarly, then they have so much more time for, you know, work life balance, which is a great thing.
All in all, I have to applaud these regulations, and I’d love to see more similar regulations that boost the power of labor and the living standards of the working class. We need more of this in Washington. More good regulations that make workers’ lives better.
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