President Obama has noticed that a lot of workers on his 24/7 business paradise are toiling long days, nights and weekends for low pay. He has proposed to update the law on overtime in the interests of growth, America, and fairness. What does the new rule oppose? What does it keep intact? This can tell us a lot about what is being demanded of working people with these preeminent values.
The abuse and proper use of the working poor
Obama’s proposal is meant to stop companies (notoriously, in retail, especially dollar stores) from taking advantage of an outdated rule in the Fair Labor Standards Act which exempts them from paying overtime to salaried managers earning below $23,660. Evidently, it’s common practice to give a title like “assistant manager” to a worker who operates a cash register, stocks shelves, or sweeps the floor, then have him or her work up to 70 hours a week and not pay time-and-a-half for overtime. Everyone instantly knows why companies do this: to maximize the work with a minimum of payment, boosting their profit.
The new rule raises the salary threshold to $50,440 to stop this practice. It’s also well-known why Republicans, the Chamber of Commerce, and business groups are screaming mad: if companies have to pay workers more, this hurts their profit.
Obama accuses these companies of “cheating.” He has no problem with long workdays for low pay, because that’s still permitted by the new law. His objection is that these companies cheat workers out of overtime pay. He points out that workers “rely” on overtime pay. Why? This is also well known: a normal day’s paycheck is so skimpy that people have to work around the clock just to get by.
Obama does not object to the goal companies pursue when cutting corners on overtime pay: profit. In fact, making millions is precisely how companies should contribute to the “growth America needs.” Obama objects when these companies undercut “profitable companies like Costco who see paying higher wages as a way to reduce turnover and boost productivity.” These are the kinds of businesses that represent the high tech, high skills, high wage economy that Obama wants to secure the foundation of America’s global power. Reduced turnover means fewer workers end up receiving unemployment or some other government assistance; the company isn’t transferring the burden of its wage costs to the government budget, where people also represent a burden. Productivity means not just extending the working day but intensifying it with the latest technologies.
If higher wages is such a good business strategy, why doesn’t Obama recommend raising wages to $50 hour? Of course, that wouldn’t be realistic. Obama knows low wages are a crucial weapon in the competition not only between companies, but between nations as well. So low wages per se aren’t the problem – only wages that are too low, i.e., that lead to workers withdrawing funds for social assistance from the national budget rather than adding into it. Obama’s concern is not the hardships faced by stressed-out, cheaply-paid workers, but the problem they pose for the state and the national economy.
The legal working day: anywhere from 4 to 24 hours
American companies and “the economy” are always talked about as a big collective “we.” Yet it is also widely acknowledged that workers need state protection from their employers in the form of a legal working day. Why are laws necessary to limit the working day anyway?
The economic interest in getting a lot of work for little pay leads companies to extend the working day as long as the worker is physically and mentally able to endure it. The company is free to disregard the worker’s need to recover their used-up energy because this takes place on the worker’s private time. The company transfers the risk of profitable production to the worker – with consequences for the worker’s health.
Back in the early days of capitalism, the labor movement called on the state to limit work times. The state eventually recognized this was a necessity – not just for maintaining the social peace, but so that the working class is capable of being a working class. Unless restrained by state power, the capitalists destroy the human source of their wealth in the very process of creating this wealth. This could serve as a “teachable moment” about the nature of the economy that is regulated by the “humane,” modern social state.
Most workers see the legal working day and overtime pay as helping them. That’s certainly part of it. But it shouldn’t be overlooked that the state doesn’t do this to stop their ruination. It sets conditions for their ruination which modulate it so that they remain functional. This is not for their sake, but so that they can continue to play the role designated for them in this economic system – as a tool of an interest that is hostile to their well-being.
The fairness of class society
In promoting his overtime plan, Obama likes to quote an old labor movement slogan, but with a twist: “a fair day’s wage for a hard day’s work.” Half the equation (“a fair day’s work”) is quietly dropped. Probably nobody notices; a shorter working day isn’t on the agenda in any nation that wants to compete in the global economy. The only public criticism of the amount of overtime put in by American workers is that this denies part-time workers the one thing they can hope for in life: more work!
The old labor movement slogan serves Obama’s purpose because he wants to be seen as a friend of the working class, but not too soft on them either. So he affirms the ideology of the wage as fair pay. Who would disagree? Neither CEOs or union leaders would argue. The working class must serve business and give everything they’ve got. For this, they should get fair pay. But what is that exactly? Is it $10.10 per hour or $15 or $50? How much is the rent to be paid out of it? How much does food cost? There is no such equation. It’s a question economists and policy wonks will argue forever. If the goal of the economy was to meet people’s needs, nobody would ask it.
Fairness is the belief that the economy is a big communal project. The principle is always invoked when it is discovered that it doesn’t really work out this way: I work hard, why doesn’t it pay off? He doesn’t do anything, why does he get that much? What work is worth is not decided by effort, but what kind of means a person has. Some let their money “work” for them, and others work for money.
Obama claims the new overtime rule helps workers because it will “grow the economy.” Its funny: wealth has been growing for decades; there’s wealth all over the place; America is the richest of all nations. What still needs to grow? One thing: the private wealth of those who own it. And every MBA knows the methods: cutting “overhead” – i.e., the livelihoods of the working class – either by direct wage cuts, automation, outsourcing, or any of the many other methods which are all being applied simultaneously. Is it really so astonishing when growth makes the rich richer and the poor poorer?
Obama’s “help” for workers means more long days packed with hard work, wages so low that they can’t say no to overtime, insecurity, flexibility, and sacrifice for the wealth of others. What a great land of opportunity!