In my latest column in the Pittsburgh Tribune-Review I address the Obama administration’s latest infliction of harm upon lower-skilled workers – namely, its effort to deny to many more of these workers the right not to be subjected to government-mandated overtime “protections.” Here are two slices; as you read these, remember that the administration claims that, by mandating extra, overtime pay for the affected salaried workers, the employers of these workers will mainly work these workers fewer hours and hire other workers to perform the ‘overtime’ tasks previously performed by these affected workers:
The Obama administration’s chief way of helping American workers is to shrink their abilities to bargain with employers. It is to strip from workers their rights to offer things of value to employers in exchange for things of value from employers.
The minimum wage is an example: By denying workers the right to offer to work at hourly wages below the minimum of $7.25, the government robs workers who cannot produce that much value per hour of the right to bargain for jobs by offering to work at wages below $7.25.
Another example, announced this past summer, is the administration’s scheme to expand the number of workers who are prohibited from working more than 40 hours per week unless they are paid time-and-a-half for every hour they work above 40. Currently, salaried workers with supervisory roles who earn more than $23,660 annually can agree to employment contracts under which, if they work more than 40 hours weekly, they get paid nothing extra.
If employers, to avoid paying overtime wages to salaried workers, reduce the number of hours these employees work each year, the amount of annual output that these employees produce for their employers obviously falls. These workers become less valuable to their employers. Many employers — operating in highly competitive industries such as food retailing and lawn-and-garden care — will have no choice but to lay some of these salaried workers off or to reduce these workers’ salaries. Either way, bargains struck voluntarily between employers and employees are upended by heavy-handed regulation, making both employers and workers worse off.