New Overtime Rule is a Huge Boost for the Fight for $15

New Orleans        The Department of Labor has formalized a new rule on overtime that will go into effect on January 1, 2020.  Any salaried workers making less than $35,308 annually, will be automatically eligible for overtime.  The standard in effect for the last fifteen years, since 2004, set the bright line for mandatory overtime at under $23,660 per year or $455 per week.  The new standard is a 50% increase to $679 per week.

There was some disappointment in some quarters that the final rule is less than the Obama DOL proposal that would have paid workers making under $47,000 overtime, roughly doubling the former standard, but the Trump DOL still estimates that this will allow 1.3 million additional workers to be eligible for overtime, which isn’t nothing.  Perhaps it is time to take the lemons and make lemonade by looking at the impact this change may drive in wages for lower waged hourly workers?

The existing overtime requirement, calculated for fulltime annual employment at 2080 hours per year, meant that workers making less than the equivalent of $11.38 per hour were eligible automatically for overtime, but not so much if they were over that level, salaried, and could establish discretion in job performance.  The Obama proposal equivalent would have paid overtime under $22.60 per hour, more than three times the federal minimum wage of $7.25, and predictably an overreach that brought employers, large and small, out of the woodwork to oppose such a leap.  The new standard figured at fulltime hours is equal to $16.98, meaning essentially that a salaried worker would have to be paid roughly the equivalent of more than $17.00 per hour.

Now, $17 an hour is a very interesting number for both living wage campaigners and businesses near that level who want to protect themselves from potential overtime claims.  I couldn’t find a DOL estimate of any multiplier effect from this new overtime rule, and given the Republican regime, and its putative claim to still be seen as the party of small-town businesses rather than the Wall Street superrich, they may not have been willing to offer one.  Nonetheless, there is a multiplier in reality, whether in fast food, small shops, or even nonprofits, who are unwilling to take a chance, so will raise the pay of lower level and front-line supervisors over the $35,300 and $17/hour standard wanting to be safe rather than sorry against future disgruntled employee claims.  Maybe it’s another million workers?

Once this $17 per hour seeps in, it also should finally give a huge boost to the claim of reasonableness for those still fighting for $15 per hour.  Sure, it is more, but only a couple of thousand more, so not from another planet, making paying $15, and meaning it, easier for employers to swallow. Furthermore, this overtime rule is national, effecting red and blue states, the South as well as the West, equally.  That’s a line that the Fight for $15 has largely not been able to cross in a lot of the country that lacks local option rules or the ability to bring wages forward through initiative and referendum procedures.

This won’t win the fight, but it sure might give it a boost as the new rule sinks into paychecks in 2020.

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It’s Their Happiness, Stupid!

Source: The Economist

Gulf Shores  James Carville’s quote in the Clinton campaign “war room,” that “it’s the economy, stupid!” will be in his obit.  I’ve read one report that argued that Trump would be re-elected, regardless of his polling numbers and approval ratings, if growth was above 3% in 2020 before the election.  The notion that economics drives politics has an almost ideological weight no matter what the form of government and whether in the USA and India or China and Russia.  One could argue that in this area, inarguably, Marx was right.

What explains the support for radical, far right politicians and parties all around the world even when economies have improved?  Some now argue it’s as much, if not more, about happiness and personal perspectives on well-being, as it is about economic security and expectations.

The Economist really took on this question.  They started by referencing a study by George Ward of MIT, where he,

“…confirmed the political significance of happiness. He looked at what best explains the variation in the incumbents share of the vote in 15 European elections between 1973 and 2014.  Life satisfaction, he found, was twice as important in explaining how incumbents did as the unemployment rate and about 30% more important than GDP growth.  Ward also found that…almost half of those who were very satisfied with their lives said they would vote for the incumbent while less than a third of those who were not at all satisfied would.  Research from America suggests that happiness has as big an effect on voting patterns … as education.”

Now that’s interesting.  It aligns to some degree with the increased importance pollsters and pundits have placed on right track versus wrong track surveys of popular opinions about the direction of the country that are also decoupled from pure economics.

The Economist, being a conservative-leaning, business-supporting journal, is worried about this, especially in the face of one rightwing party after another in Europe and politicians like Trump and Ford in North America being elected despite improving economies.  Additionally, they, and others like-minded, are confused that older people rather than becoming more settled and satisfied after reaching the age of 60, are raving mad and throwing their votes into this same radical fire.

They raise the distinction between “evaluative” versus “hedonic” happiness being important.  Evaluative looks at how you view your life today.  Hedonic responds to how you felt yesterday.  Measures including the World Happiness Report see an upswing towards hedonic happiness confronting politicians that have always assumed evaluative happiness was the ticket to ride.  Some US polling indicates that the results of basketball and football scores for favored teams can alter voting patterns in this way.  In Switzerland, rain can throw governments under the bus.

Maybe this isn’t new, because the real deal may be how unhappy people feel when they feel things are getting better, but that they are being left behind, which is certainly part of what Trump is banking on.  The Economist notes that would not be new.  Seymour Martin Lipset noted the contradictory surge for the Ku Klux Klan during the boom times of the 1920s in the US.  More contemporary work from economists in the Netherlands found growing support for the radical right in Europe from those feeling slighted.

Maybe it’s not enough for politicians to just line the pockets of the rich, and then for them to tweet and Instagram their good times.  If looking differently at happiness makes politicians look at all of the folks left behind, not just the rightwing shouters, it would be a great thing for all of us on the bottom.

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