Pay threshold for managers to rise to 50K

[Ace]

I don't quite understand the math on that. In this theoretical situation, you have your choice of paying one person $30K or two people each $15K. Why is one "more expensive," somehow, than the other?

Because you still have to offer some benefits. You have to pay worker's comp for two, instead of one.

You will have to spend money to train replacement workers at least twice as often, probably much more, since a 25-30 hour a week making $15,000 is not the most desirable job int he world.

 

[The Big Ragu]

The world doesn't work that way. You produce a product. In a competitive market place, you can sell the product for $X dollars. You need to keep your total costs below $X, or else you operate at a loss, and presumably don't stay in business.

Benefits, training employees, salary, materials, etc. ... They are all the inputs that cost you to make the product. If you spend more on one input -- let's say benefits are costing you more because of some regulation -- you need to find that money someplace else. Or some regulation puts you in the position of having to train more employees -- that money has to come from SOMEWHERE.

Reality, in that situation, dictates that you need to spend less on something else in order to be able to turn a profit and pay yourself. i.e. -- it comes out of salaries. That is IF you are able to manage the minefield of regulations and stay in business. You can't stay in business, when your costs are greater than your revenues.

Mandating HOW people have to divide up the pie -- their input costs --with senseless regulation doesn't make the pie they are dividing up any bigger.

 

[doctorquant]

I guarantee more (not an equal amount or less) money will be transferred from companies to workers under the rule, so the middle class wins.

And I guarantee not a dime, on net, will be transferred.

 

[cranberry]

Mandating HOW people have to divide up the pie -- their input costs --with senseless regulation doesn't make the pie they are dividing up any bigger.

But some hungry person's slice might get bigger.

 

[cranberry]

And I guarantee not a dime, on net, will be transferred.

I don't think you're being honest with yourself. You know better.

 

[The Big Ragu]

But some hungry person's slice might very get bigger.

We have way more hungry people because of these stupid interferences that don't just allow people to bargain with each other FREELY.

Wishing for a fairytale world doesn't make that world reality. And trying to centrally plan that world leads to misery across the board.

At BEST, you have two people working part-time jobs--to deal with the regulation--rather than one person working a full-time job. At worst, it drives up operating costs to the point where someone can't stay in business and you have yet another formerly employed person out of work because of these endless regulations.

 

[doctorquant]

I don't think you're being honest with yourself. You know better.

President Obama does not wield a magic wand; neither he, nor anyone else, can change reality (of this sort) with the stroke of a pen. I know you like to think that "democratic processes" can do that, but they can't.

Stipulating for the moment that affected workers have no (or very little) bargaining power, we would anticipate their employers reshaping the terms of their employment to, on net, keep input costs in line with the value of these inputs. At best the affected workers will be no worse off.

Even if you allow for the workers having some bargaining power, employers will rework the mix of their inputs in ways that ensure they don't pay more for this labor than this labor is worth (to them). Stipulating that the workers have some bargaining power leads us to conclude (since said workers are to all appearances satisfied with the bargain they've struck, that bargain being the best one on the table) that this change will lead to them being worse off.

 

[cranberry]

No, you're both deluding yourselves. Again.

Among the 5 million-plus workers who will be affected, most will retain their full-time jobs and begin collecting overtime, so they get more money. Some workers will have their hours reduced to avoid OT, so they get more free time. A far smaller percentage of workers will be demoted from full-time to part time and lose benefits. More part timers will be hired.

That's how this will play out. Workers will get more money after the rule goes into effect than they did before.

 

[doctorquant]

If XYZ decides to cut the "manager's" pay by 1/3 to reflect the reduced hours to 40 a week, the "manager" would only be making $16K a year, or roughly slightly less than $8 an hour. Which, in some states now, is below their minimum wage, but for the purposes of this discussion, I'll keep to the pay rate for now.

So now the "manager" either wants, or needs to make up their salary, so they find a 20-hour a week job on top of their FT job, at say $9 an hour. That's $180 a week, or roughly $9K a year, assuming two weeks off for whatever. So now, they're making the $16K at their 40-hour a week job, and $9K at their 20-hour a week job. They're now making $25K a year for working the same hours, instead of $24K.

So you have a manager, effectively earning $8 an hour, who could make $9 an hour somewhere else. And rather than making that somewhere else his/her full-time job, he/she simply works there on a part-time basis.

He/she sounds like one of my C- (after the curve) students.

 

[Ace]

Where does this Utopian world exist where workers and employers can bargain freely and without government intervention so that everyone wins?

 

[doctorquant]

Where does this Utopian world exist where workers and employers can bargain freely and without government intervention so that everyone wins?

It's right down the road from that place where the value of something depends on some document some guy signs.

 

[Ace]

So you have a manager, effectively earning $8 an hour, who could make $9 an hour somewhere else. And rather than making that somewhere else his/her full-time job, he/she simply works there on a part-time basis.

He/she sounds like one of my C- (after the curve) students.

I think in the current situation, lots of hard-working people are willing to put in 50-60 hours a week for $24,000 and a manager's title because they see that as a way to get ahead. They trust that their hard work will be noticed and maybe the restaurant or retail place will move them up the chain.

It takes a while for most of them to realize they are simply being taken advantage of.