Political Forecast

On Monday, August 23, the federal government is set to enact a new set of labor laws entitled “FairPay” as an overhaul to the overtime pay system among workers in the United States.

The claim on the Department of Labor’s FairPay website says (link here):

Under the new FairPay rules, workers earning less than $23,660 per year — or $455 per week — are guaranteed overtime protection. This will strengthen overtime rights for 6.7 million American workers, including 1.3 million low-wage workers who were denied overtime under the old rules.

However, many have begun to counter these statistics, most notably the Economic Policy Institute.

In testimony before the Subcommittee on Labor, Health, and Human Services, and Education of the United States Senate Committee on Appropriations on May 4, 2004, Ross Eisenberry, Vice President and Policy Director of the EPI, listed eight substantial misconceptions and flaws of the new legislation, as well as analysis as to the impact it will have on blue-collar workers in many different fields. The link to his testimony is here. I highly recommend reading it.

According to the EPI:

Contrary to the Bush Administration’s claims, it is not the case that 1.3 million low-wage workers who are not getting overtime pay now will. The Administration is engaged in consumer fraud, selling this new regulation on the promise of benefits it knows full well will not materialize. Part of the problem is that the Department’s estimate assumes that every employee among these 1.3 million low-wage workers actually worked overtime during the year, even though the evidence is that they did not, and even though only about one employee in seven generally works overtime. If the Department had made this same assumption with respect to the proposed rule, it would have found that almost 5 million employees would have lost overtime pay, rather than the 644,000 it claimed. Moreover, the number of employees who will be guaranteed coverage by the $23,660 threshold will diminish over time because it is not indexed for inflation. An administration that cared about low-wage workers would have raised the threshold to at least keep pace with inflation since 1975, in other words, to at least $28,075.
…
A bizarre and poorly explained new exemption for “team leaders” creates the potential for hundreds of thousands of currently exempt non-supervisory workers to lose their overtime rights. The use of self-managed teams of non-managerial, non-supervisory, front-line employees is widespread in American industry, and millions of employees are routinely involved in them. The regulations provide no definition of “team leader,” it has never been defined in FLSA case law, and the Department’s assertion that it is clarifying current law is patently false.
…
Despite the Department’s claims in power point presentations to public officials that blue-collar workers are entitled to overtime, the rule limits overtime rights to “ blue-collar employees,” begging the question of who gets classified as a non-managementmanagement blue-collar worker, a seemingly new class of exempt workers that will grow significantly under these new rules.

All of these new explanations seem to show only one thing: thanks to a Republican president and congress, big business interests win again while the little guy is stomped on like a bug.