June 8, 2015


Obama can't get the minimum wage hike that he wanted, so now he seems likely to try to pass a new overtime threshold that will cripple businesses and result in even more companies reducing employee hours to avoid paying time-and-one-half.

While I would agree that there are businesses, and specific industries that flagrantly abuse the designation of an exempt employee, there will be untold unintended consequences if this administration enacts a blanket adjustment to an overtime rule that has only been updated once since 1975.
One key concern about expanding overtime is that it could prompt employers to reduce the number of hours that individual employees work to avoid paying time-and-a-half. McDonald’s, reportedly, already uses its computer system to record the hours worked by individual fast-food workers, and sends alerts telling franchisees to send this or that worker home when he or she is about to exceed 40 hours. In many instances reducing employees’ hours worked may endanger their eligibility for benefits.
Obamacare was the impetus for the restaurant, and a number of other low-wage service industries, to develop new strategies that strictly limit their number of full-time employees.  Nearly doubling the current overtime threshold will certainly result in job loss, primarily those of middle income workers.
Aloysius Hogan, a senior fellow at the conservative Competitive Enterprise Institute, said it will have a “job killing effect.” Hogan said businesses will be incentivized to lay off higher-paid executives and replace them with lower-paid workers. The National Retail Federation, a likely leader in the battle against expanded overtime, last month issued a study that came to a similar conclusion. On its release NRF senior vice president for Governor Relations David French said the rule would “hollow out middle-management careers and middle-class opportunities for millions of workers.”
In typical Obama/liberal claptrap, the administration has said that this sort of job loss would simply result in more job creation, 'because somebody has to be hired to do the work', and for those companies, like McDonald's, that limit the number of hours worked:
Jared Bernstein, an economic adviser to Vice President Joe Biden during President Barack Obama’s first term, added that for many workers reduced hours would be a plus: “Their salary is the same but they have more time with their families.”
Sweet Jesus, do these people really believe the things that come out of their mouths?

Fisked from here.

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