Since the Fair Labor Standards Act of 1938, it has been established that if you’re an hourly paid worker and you work more than 40 hours per week, you should get overtime pay equal to time and a half, meaning 1.5 times your base wage. For three-quarters of a century, that standard has both rewarded people with a wage premium for working overtime, and provided an important incentive for employers to hire extra workers if they want to avoid paying the overtime premium to their existing work force.The New York Times:
But the law did not stop there. It recognized that certain salaried and white-collar workers should also benefit from overtime pay, as neither their relatively low salaries nor their duties at work should exempt them. So the law created a salary threshold below which salaried workers must get overtime and a set of “duties test” to establish whether salaried workers earning above the threshold were truly engaged in exempt duties for most of their time at work, including supervisory, managerial and executive tasks.
Unfortunately, these parts of the overtime rules have eroded, meaning that millions of workers who should be eligible for overtime are not. Fortunately, President Obama has proposed to update these rules, and double-fortunately, he does not need congressional approval to make this type of regulatory change.
McDonald’s and several franchise owners were hit this week with seven lawsuits brought by workers in California, Michigan and New York. The details differ, but all the cases charge “wage theft” — the violation of federal labor laws, including failure to pay the minimum wage and time-and-a-half for overtime, denial of meal periods and rest breaks, and mandatory unpaid work.More on the day's top stories below the fold.
The cases, filed in state and federal courts, are a bold escalation in the battle by fast-food workers for better pay and the right to unionize without retaliation, which has involved widespread strikes and protests. The lawsuits argue that both the corporate parent and the independently owned franchises where many of the plaintiffs work are jointly responsible for illegal pay practices carried out by the franchises. That strikes at the heart of the low-wage fast-food business model. [...]
McDonald’s, an industry leader, says it is reviewing the allegations. If it is found liable, change could come to a notoriously low-paying field. Still, legal action is only one of the ways to try to effect change. The proliferation of low-wage work in America demands policies to lift wages, including a higher minimum wage. In the meantime, let the courts decide.
Meanwhile, Paul Krugman looks at the elite panic over movements to increase wages:
Four years ago, some of us watched with a mixture of incredulity and horror as elite discussion of economic policy went completely off the rails. Over the course of just a few months, influential people all over the Western world convinced themselves and each other that budget deficits were an existential threat, trumping any and all concern about mass unemployment. The result was a turn to fiscal austerity that deepened and prolonged the economic crisis, inflicting immense suffering.Timothy Noah at MSNBC:
And now it’s happening again. Suddenly, it seems as if all the serious people are telling each other that despite high unemployment there’s hardly any “slack” in labor markets — as evidenced by a supposed surge in wages — and that the Federal Reserve needs to start raising interest rates very soon to head off the danger of inflation. [...]
Is wage growth actually taking off? That’s far from clear. But if it is, we should see rising wages as a development to cheer and promote, not a threat to be squashed with tight money.
If we were to raise the minimum wage to $10.10 per hour, as Iowa Democrat Sen. Tom Harkin and California Democrat Rep. George Miller have proposed and President Obama supports, you wouldn’t just be boosting income for the 17 million workers currently making between $7.25 an hour (or a bit more in some states that have their own minimum wage) and $10.10 an hour. Indirectly, you’d also be boosting, to a fairly predictable extent, income for another 11 million workers making slightly more than $10.10, for a total cohort of 28 million. And the average worker in this larger group provides fully half of his or her family income.The Associated Press:
Let me say that again. The average worker who’d be affected by President Obama’s proposed increase in the minimum wage from $7.25 to $10.10 per hour is currently responsible for half of his or her family’s income. By definition, that’s not “pin money,” and it isn’t money being saved up to purchase a pre-owned Dodge Caliber. It’s money the family is counting on to pay the mortgage and put food on the table.
Who are these low-wage earners? Well, not quite one-third are unmarried with no kids, which in most cases will mean they live alone and provide 100% of their “family” income. Do all these single people skew the data? Sure, a little (though it’s important to remember that childless singles have to eat, too). But almost as many – 27% – are married, which presumably means two incomes. The remaining 29% are single parents, which means their low wages must provide 100% of a family income that supports an actual family. [...] What this means is that it’s simply wrong to dismiss the beneficiaries of a minimum-wage hike to $10.10 as frivolous folk on whom families don’t rely economically. Quite the contrary. These low-wage family members bring home the bacon – what little there is to be had. Time to give them a little more.
For years, many Americans followed a simple career path: Land an entry-level job. Accept a modest wage. Gain skills. Leave eventually for a better-paying job.And what will happen if there is a jump in the minimum wage? Lynn Thompson at The Seattle Times sums up one study:
The workers benefited, and so did lower-wage retailers such as Wal-Mart: When its staffers left for better-paying jobs, they could spend more at its stores. And the U.S. economy gained, too, because more consumer spending fueled growth.
Not so much anymore. Since the Great Recession began in 2007, that path has narrowed because many of the next-tier jobs no longer exist. That means more lower-wage workers have to stay put. The resulting bottleneck is helping widen a gap between the richest Americans and everyone else.
Ten years ago, San Francisco raised its minimum wage from $6.75 to $8.50 an hour, a 26 percent increase. Since then, it has gone up at regular intervals to its current $10.74 an hour, the highest big-city starting wage in the country.Finally, Andrea Purse at CNN argues the Republican Party needs to support a minimum wage hike:
The city has slapped other mandates on businesses, including paid sick leave and a requirement to provide health-care coverage or pay into a pool for uninsured residents.
What have the effects been on employment?
Almost none, according to economists at the University of California, Berkeley, who have studied San Francisco, eight other cities that raised their minimum wages in the past decade, and 21 states with higher base pay than the federal minimum. Businesses absorbed the costs through lower turnover, small price increases at restaurants, which have a high concentration of low-wage workers, and higher worker productivity, the researchers found.
Minimum wage is poised to be a driving issue this year. Given how it polls among women, Republicans should seize the chance to enact good policy and good politics with a group of voters they've been alienating. [...] The GOP's policies don't just harken back to the "Mad Men" era; Fred Flintstone could be their architect. They don't really consider women as the powerful economic agents they are. [...] Failing to raise the minimum wage might be a boondoggle for the current set of Republican lawmakers, in that almost two-thirds of minimum wage earners are women, and women care about this issue deeply.A good point, but the Republican Party doesn't really have a good track record of listening to voters, does it?