More Begging For The President To Disrupt The Economy

The virtue of this New York Times editorial is that, even though it asks the President to exercise unconstitutional authority (nothing new there), this time the unconstitutional usurpation on society was done by Congress. They committed their crime in 1938 with the so-called “Fair Labor Standards Act.”

The act establishes that most workers, after 40 hours of weekly work, are entitled to be paid 1.5 times their regular wage — a.k.a., overtime. Hourly paid workers fall into this class, as do salaried workers who make less than a specified “threshold” amount. The idea is that employees in higher-status positions (executives, administrators, professionals) ought to be exempt from receiving the overtime premium.

But as with the minimum wage, which is not automatically adjusted for inflation and tends to lose real value unless it is raised, the overtime exemption threshold generally languishes. That means that many people who once would have been paid 1.5 times their wage when working overtime are not, violating the spirit of the law.

For decades, the Department of Labor periodically updated the overtime salary threshold. But today’s threshold, at $455 a week, is far below historical levels in real terms. And at just $2 a week more than a poverty-level income for a family of four, it is indefensibly low. I propose that President Obama raise the threshold to $970, equal in today’s dollars to the 1975 level of $250.

In keeping with the original purpose of the overtime rules, this increase would make overtime pay more expensive, creating an incentive for employers to spread work among other workers (an important goal in today’s low-job-creation environment). It would also more fairly compensate those who do work more than 40 hours.

The word “fairly” is a case study in arbitrary nonsense. Neither the President nor anyone in the Department of Labor has any idea what they mean by this. There is no reason to claim that 1.5 times is the “fair” amount for “overtime.” There is no reason to claim that the forty hour work week is normal and that anything more is “overtime.” There is no reason to think that whatever is a fair work week and whatever is proper overtime would be the same in Melbourne, Florida as in Auburn, Washington. There was never any reason to use a Federal agency to dictate the levels of pay rather than allow people to bargain with each other on their own and develop standards from all those interactions

These rules are all made up out of thin air and then imposed on employers by self-righteous bullies. And, despite his confident predictions, the writer really has no ideas how a sudden unilateral, executive change in overtime rules will affect businesses.

In fact, why hasn’t Obama already made this change? I suspect that he realizes that a sudden drastic change in the overtime rules might have an immediately negative effect on businesses. He would be directly responsible and would not be able to blame Congress or anyone else for the consequences.