Why is it that almost every time a law is enacted in order to help a certain group, it only ends up hurting them? You would think we would know better by now.
When I owned my first company, a lawn and landscape company, working overtime never benefited my employees. Well, maybe never is a strong word to use so let’s say almost never. How could that be? I was like most companies and had to pay my employees time and a half after they worked over 40 hours in a week. That should help all those landscapers and maintenance workers, right? A win for the little guy against their big bad businesses owning boss (BBBOB, a new acronym).
Of course, that is not how it works. What does the BBBOB do when he has to pay overtime? In my case, I didn’t allow them to work past 40 hours whenever possible. I either hired more workers or the jobs took longer to finish so I could keep my employees within the set number of hours the government allowed my employees to work.
See, the problem with laws like the overtime law, is that they sound good in theory but rarely (and I mean rarely) do they work in the real world. It’s all warm and fuzzy at first, with high fives within the legislative body that passes it, and then it’s an “oh no” on the worker’s side because now they need to get a second job that will pay them even less than what they are earning in their primary job. Why is that, you ask?
Here is an example: My employee makes $15 per hour as a landscaper. He works hard to support his family. He would like to work 50 to 60 hours a week to really increase his earnings and not have to struggle to pay his bills. However, I can’t afford to pay him $22.50 per hour. Not because I’m stingy, but because the market doesn’t allow it. So I hire another person that can work for $9 per hour to help him, and I keep the overtime to a minimum.
He is now forced to find a second job, which ends up being a loss for both of us. First, he won’t find another job that pays $15 per hour because his skill level won’t be enough to demand it. Now he has to deal with taking less in wages and juggling a second job into his schedule. Secondly, I would prefer to pay him $15 per hour for all the hours he chooses to work over 40 hours, and not have to hire another employee whose skill set is probably not even worthy of $9 per hour.
We both lose out on the deal, and we have our “brilliant” government to thank for passing laws that blanket the country without any regard for how things work in the real world. That is where it all falls apart. One legislative body could never in a million years know what is best for the masses.
The worker in my scenario would choose to work over 40 hours, but that choice has been taken away from him with the one law that was intended to help him. So why would I write a blog about a law that has been around for decades? Because they are doing it again by raising the salaried worker’s minimum to be exempt from overtime.
The new law arbitrarily moves the new minimum from $23,660 to $47,476. This will have wide reaching effects to millions of businesses that will adjust, but not usually to the benefit of the employee.
(Here is a short article you can read that pertains to what is already happening by this latest Obama ruling, and he is so proud.)
What the bureaucrats always fail to recognize is the free market will always adjust because it has to, or else businesses don’t survive. A hundred years ago when there was abuse by BBBOBs, we needed more regulation to even out the score, but that’s not the case today. Workers are free to choose where they work, who they work for, the wage amount they will accept, and at the same time they are free to choose to better themselves for a brighter future.
I have never, in all the businesses I have owned, been able to keep employees unless I treated them right and paid them fairly. Otherwise, they have a job waiting around the corner that will, or at least the desirable workers do.
The day the government stops thinking they are smarter than the BBBOBs and the good employees trying to get ahead, we will all be a lot better off.
P.S. – Next time you run across these lovely bureaucrats that run our government, ask them, “How many jobs have you created in your lifetime? When have you risked your own money to make a business grow, and gone without a paycheck so your employees could be paid?” I think you know what the answer will be 9.5 out of 10 times.