Pay threshold for managers to rise to 50K

[LongTimeListener]

If minimum wage is set at a certain threshold and the job requires a certain amount of overtime, there's no way to get around it.

Your belief seems to depend on the idea that these businesses (a restaurant in this specific case) are overstaffed to a degree that they can simply cut back on the workforce. That would not be my impression of any restaurant I've been to (and very few places of business). Cutting frontline service would be a pretty bad way to keep the business going.

 

[doctorquant]

For the hypothetical 60-hour-a-week, $26K "manager," his/her hourly rate (in a regular time/overtime hourly setup) is about $7.14 per. That's the manager who's currently employed -- i.e., working 60 hours a week -- at that rate. There is no way in heck that he/she is suddenly going to start making $39K a year just because it's forbidden to now simply pay him/her a lump sum per week. No way.

 

[bigpern23]

You guys are being foolish. The currently salaried manager is going to be put on an hourly payscale that roughly approximates (factoring in overtime) what his/her total compensation currently is. For the hypothetical $26K a year "manager," his/her hourly wage might go up a bit ... about $7 a week, since he/she currently doesn't make the minimum wage. It's entirely possible that his/her total annual compensation might actually go down, because he/she will actually have to be at work to be earning. But even if the latter is not the case, the idea that firms are going to suddenly pay $45K for what just yesterday was worth (and could easily be acquired at) $26K, absent anything other than a change in overtime rules, is simply silly.

So, you think that the $26K/year manager, who's current pay rate is $13/hr, is going to continue working for a company that slashes his or her hourly rate to $7.50/hr, basically the federal minimum wage? Also given the current momentum to increase the federal minimum wage, businesses probably won't even have that option in the near future.

I don't think many of us believe the manager is going to see his or her wages increase. Personally, I think in most cases the manager's hours would decrease and he or she will be asked to complete the same (or nearly the same) amount of work in less time.

In the case of restaurant workers, again, it won't really matter because most restaurants are staffed by hourly-wage employees anyway. A restaurant has a set number of hours it needs to have staffed every week, so they'll staff those hours however they feel is best. At the restaurants I've worked at, they always preferred to pay good workers overtime because it was more cost efficient to retain a good employee than it was to constantly train new employees to avoid paying overtime.

 

[LongTimeListener]

We will see how it adjusts. But there are other factors at play -- including, pointedly, the floor set by unemployment/welfare/the student-loan game etc. If it isn't a $13,000 raise, maybe it's $3,000 or $6,000.

This is very similar to the discussion around the minimum wage since its inception and with each subsequent increase. The doomsday predictions don't pan out there.

 

[Baron Scicluna]

You really believe that manager, whose current 60-hour week commands $26K in cash compensation, will, absent anything other than this regulatory change, continue to make that for a 40-hour workweek? Or that if that manager continues to work a 60-hour workweek, he or she will now be compensated to the tune of $45.5K (which would be $26K for the regular time and $19.5K)? You really believe that?

Or, the restaurant pays them $20K per year to manage minimum wage workers for 40 hours.

Then, if the manager has a burning desire to work 60 hours a week, they get a part time job at $8/hour, which is $160/ a week, for a total of $8K for 50 weeks, and they end up making $28K instead of $26K.

 

[Baron Scicluna]

You guys are being foolish. The currently salaried manager is going to be put on an hourly payscale that roughly approximates (factoring in overtime) what his/her total compensation currently is. For the hypothetical $26K a year "manager," his/her hourly wage might go up a bit ... about $7 a week, since he/she currently doesn't make the minimum wage. It's entirely possible that his/her total annual compensation might actually go down, because he/she will actually have to be at work to be earning. But even if the latter is not the case, the idea that firms are going to suddenly pay $45K for what just yesterday was worth (and could easily be acquired at) $26K, absent anything other than a change in overtime rules, is simply silly.

"Actually be at work to be earning." That's cute. Like those managers have all the flexibility in the world to tell their bosses that they're only working 30 hours that week because they'd worked three straight weeks of 60.

 

[bigpern23]

For the hypothetical 60-hour-a-week, $26K "manager," his/her hourly rate (in a regular time/overtime hourly setup) is about $7.14 per. That's the manager who's currently employed -- i.e., working 60 hours a week -- at that rate. There is no way in heck that he/she is suddenly going to start making $39K a year just because it's forbidden to now simply pay him/her a lump sum per week. No way.

You're looking at this wrong. The hypothetical 60-hour/week $26K manager is technically only getting paid for 40 hours per week. That manager sees an hourly rate of $13/hr on his or her paycheck. That manager is not going to stay on when his paycheck now reads $7.50/hour.

You're right, most managers are not going to earn more money with the company that currently employs them. They're more likely going to work fewer and more demanding hours, which will allow them to focus the rest of their time elsewhere.

 

[doctorquant]

We will see how it adjusts. But there are other factors at play -- including, pointedly, the floor set by unemployment/welfare/the student-loan game etc. If it isn't a $13,000 raise, maybe it's $3,000 or $6,000.

This is very similar to the discussion around the minimum wage since its inception and with each subsequent increase. The doomsday predictions don't pan out there.

Oh, I'm making no doomsday prediction here. This isn't the same as the minimum wage. I'm simply saying this likely won't do anything (other than raising compliance costs).

 

[cranberry]

We will see how it adjusts. But there are other factors at play -- including, pointedly, the floor set by unemployment/welfare/the student-loan game etc. If it isn't a $13,000 raise, maybe it's $3,000 or $6,000.

This is very similar to the discussion around the minimum wage since its inception and with each subsequent increase. The doomsday predictions don't pan out there.

Yep, there's a pretty big difference between the theoretical world -- where employers pay exactly and only what's necessary because market efficiency -- and the real one where there are many additional factors that come into play.

I'd also point out that the people warning workers about what a catastrophe this will be for them, as with minimum wage, happen to be the people who are on the side of paying workers as little as possible.

 

[doctorquant]

So, you think that the $26K/year manager, who's current pay rate is $13/hr ...

The hypothetical was a 60-hour workweek ... of which 20 hours were compensated at a regular rate rather than an overtime rate. At a constant hourly rate, that works out to $8.33 an hour. In a 40-at-regular time and 20-at-overtime setup (which is what you and others are saying it should be), that would translate to a regular-time rate of $7.14.

 

[LongTimeListener]

I disagree with that. For businesses that are getting away with paying as little as they can, this will make it more difficult.

When people are working overtime, it's because there's more work than can be handled by one person working 40 hours. The work will still be there -- which is a good thing for the business. It's just a smaller share of profit (though still a profit).

 

[doctorquant]

For businesses that are getting away with paying as little as they can, this will make it more difficult.

No, it'll just make it slightly more costly (compliance costs being what they are).

It's just a smaller share of profit (though still a profit).

Yes, but the slice of the profits affected won't be going to those workers.