March 14 2014
President Obama: Jobs Schmobs
Keith Koffler of the invaluable White House Dossier provides an excellent, one-sentence summary of what President Obama’s new overtime regulations that will affect as many as ten million American workers mean:
Jobs Schmobs was the message Wednesday from a White House that clearly has little idea or concern about how its new proposal to expand the availability of overtime pay will impact the workforce.
Saying that “Americans have spent too long working and getting less in return,” President Obama has ordered the Labor Department to require employers to pay overtime to millions of additional workers.
Current regulations prohibit businesses from denying overtime to workers who are on salary and earning less than $455 a week. As Fox News put it, the president’s new rule would “increase that salary threshold, though it was not clear by how much.”
"Overtime is a pretty simple idea,” the president said. “If you have to work more, you should get paid more.”
President Obama doesn’t understand that some businesses can’t pay more overtime and still remain solvent. If the government makes it more expensive to employ a worker, it is very likely that fewer workers will be employed. But, if overtime is “a pretty simple idea,” this migh not occur to you.
If you were like me, you had a sinking feeling when the president’s new overtime rules were announced.
I couldn’t help asking, “Does this many know anything about economics?” I’m afraid the president has made the answer abundantly clear over the last five years.
The president lives in a world in which the actual consequences of his pronouncements are irrelevant. Because he really doesn’t understand economics, after five years in office, he has no sense of the big IF Then: if I do this, this will happen.
As with ObamaCare, the president believes he can wave his magic wand and make a rule and that’s that: it’s all that is required for the commonweal (and, not coincidentally, for mobilizaing he president's base before the midtrms).
Betsey Stevens, the White House economic adviser, appears to be just as clueless as her boss. I am indebted to Koffler for bolding bits of Stevens’ press briefing earlier this week:
Q.: What analysis have you done, if any, on the overtime rule on how it would affect hiring and the number of jobs overall, what interplay that has?
MS. STEVENSON: So obviously that is something that we think a lot about, and there is a lot of research on how it can affect hiring. What we’re really focused on is the fact that when somebody is — this is looking at people who are working over 40 hours a week and are they getting paid for that. The President believes that if you’re making $25,000 a year and you’re working 60 hours a week, you should be getting paid for the extra hours you work. And that’s what this is about.
There is research that suggests that you could see employment increase as a result of modernizing the overtime rules, but that certainly wouldn’t be a primary focus right now. What we’re trying to take a look at is how we can make the labor force as fair as possible for all workers and that people get rewarded for a hard day’s work with fair wages.
Q.: Betsey, if you were to combine those overtime rules being revamped with an increase in the minimum wage, isn’t it fairly obvious that there would be a burden on businesses if the administration were to get everything that it wanted with respect to those two items?
MS. STEVENSON: We think these two items are very different, but obviously they do feed into the same thing, which is people should be rewarded for fair work. But again, realize we’re not talking about people who — what you’re paying workers who are working 30 or 40 hours a week. This is, do you have an obligation to pay the minimum wage to someone — to pay the minimum wage or overtime to someone who is on a fixed salary and maybe working 60, 70, 80 hours a week.
As Koffler notes, Stevenson has adopted a "Damn the Torpedoes" attitude, and the president's "fairness" agenda will barrel ahead, regardless of the harm.
On a more cynical note, the overtime move is also likely just the latest attempt to distract voters from the failure of ObamaCare before the midterms.