Overtime rules: Swan song in ‘fairness’ fiasco

By Jim Waters - Bluegrass Beacon

When President Obama first proposed new overtime rules last year, comedian Jodi Miller joked that “aides say after six and a half years in office, Obama feels he hasn’t killed enough jobs.”

He also feels some abstract notion of “fairness” is more important than actual consequences.

This is obvious in most of his policies – from tax hikes to Obamacare to environmental directives – where, in all fairness (pun intended), this president’s delusional ideas about forced equality offer unfavorable, even devastating, outcomes.

One of many examples occurred when Obama was asked by newsman Charlie Gibson in the early days of his presidency why he favored raising the capital gains tax when doing so would actually result in less revenue.

“Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness,” he responded.

So does this make actual consequence of a policy change irrelevant as long as some unrealistic notion of “fairness” is met?

Who cares, after all, if tens of thousands of coal miners are unemployed or health-care premiums skyrocket or young people lose out on opportunities as a result of the employment ladder’s first rung being cut off?

After all, we have fairer EPA regulations, fairer health-care policies and a fairer minimum wage – even if they all wrap a fragile economy in a straight-jacket.

Obama’s swan song in this whole fairness fiasco is changing labor rules designed to go into effect Dec. 1 that will make millions of more salaried individuals eligible for overtime pay by raising the threshold from its current $23,660 annually to nearly $47,000 per year.

While the stated reason for this change is ensuring management-level professionals are properly compensated for their work, the Department of Labor concedes that only one-fifth of the 5 million workers who suddenly become eligible for overtime pay will actually see larger paychecks.

Instead, many more workers are likely to be adversely harmed as retailers and small businesses, in particular, look for ways to cut costs and avoid lawsuits.

The Kentucky Chamber of Commerce warns the rules will cost commonwealth businesses nearly $20 million yearly and return 70,000 salaried workers to hourly pay.

Nationally, they will cost businesses an estimated $600 million just to review and implement.

Workers will pay for 80 percent of those losses through cuts in their base wages, according to a recent report by Anthony Barkume, senior research economist at the Bureau of Labor Statistics’ Office of Compensation and Working Conditions.

Potential consequences extend far beyond these dollars and threaten to impose an outdated assembly-line approach on the whole smartphone work environment.

Technology joined with flexible scheduling makes it possible for greater achievements in the workplace, especially for the 20 million Americans who telecommute at least once a month.

These usually are among the most productive workers looking for new technology and tools that can help them successfully complete projects that don’t fit into a 40-hour 9-to-5 time frame yet offer opportunities for promotion.

Michigan congressman Tim Walberg said the proposed new regulation amounts to a rule intended for the workforce known by Henry Ford being pressed down upon a workplace shaped by Bill Gates’ innovations.

“Unfortunately, it’s becoming increasingly clear that current federal labor standards have fallen short of the times,” Walberg said.

But they’re fair, right?

They’re also unconstitutional, according to a lawsuit filed by 21 states, including Kentucky.

Gov. Matt Bevin called the proposed overtime rule “an unfunded mandate by the federal government” that not only would “force many private sector employers to lay off workers” but also “encroach upon the rights of individual states” by forcibly increasing state and local governments’ employment costs as many more public workers – including 1,600 state employees in Kentucky – become eligible for overtime pay.

“Enough already,” Bevin rightly concluded.


By Jim Waters

Bluegrass Beacon

Jim Waters is president of the Bluegrass Institute; Kentucky’s free-market think tank. Reach him at [email protected] Read previously published columns at www.bipps.org.

Jim Waters is president of the Bluegrass Institute; Kentucky’s free-market think tank. Reach him at [email protected] Read previously published columns at www.bipps.org.

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