It should have been brought up to $200k per year. Exempt employees are pretty much always used to get around sufficiently staffing, either with sufficient redundant number of employees or sufficiently paying for dependable
employees.
I assume anyone with a customer facing “manager” title is just the on call employee who trades their ability to earn overtime for less volatility in their pay (salary).
This is especially prevalent in immigrant communities with chain migration where the more recent families that migrate are expected operate a convenience store/gas station/motel/laundromat/franchise restaurant/etc day and night 7 days per week in exchange for the minimum allowed exempt salary.
$200k was chosen so that the exempt employee might actually end up being a real manager with an ability to manage and have control of a budget and increase payrates if necessary. Could be higher for all I care.
It should also apply to more than 8 hours per day like it does in California.
> I assume anyone with a customer facing “manager” title is just the on call employee who trades their ability to earn overtime for less volatility in their pay (salary).
Whoever is telling them that they can only hire people at minimum wage plus $1 or $2 is the manager. I don’t mind if they are exempt from overtime pay, since they would actually have to be the ones working on call when short staffed…rather than sit behind a desk adjusting spreadsheets.
Funny you bring that up, since they are the ones getting burnt 99% of the time by the title "manager".
Manager for most retail and food service are people who just pick up the slack when someone calls out or the chain is understaffed (aka 100% of the time).
If they are lucky, they do the hiring and firing, but that means you have to make hard decisions about how much free time you will have.
Shame they don't raise that even higher. It seems like ~60K in the governments mind is still high, even though as a population, even people making >100K are reporting that they feel like they can't get ahead, let alone people who make less than that.
I think its great that they're updating this, but they should of increased it by 2/3s at least
> even people making >100K are reporting that they feel like they can't get ahead
I know people making $5+ million who say the same. This is the human condition. Anecdotes of not getting ahead and personal strife are terrible inputs for economic policy.
American GDP per capita is about $75k [1]. Median household income around $70k [2]. If you want natural figure to revolve around, those are good ones.
The cost of living is rising fast enough that the majority of people making between 100K and 250K are feeling like they can't get ahead, with record low numbers of home ownership (not just single family homes either, but condos etc) among this group of traditionally "automatic" home buyers, as well as record lows of asset accumulation.
The dollar just isn't going as far as it used to, and there is no signs of that letting up any time soon, even with rising interest rates, you see no knock off effects on things like grocery prices or home prices, even though corporations are making record profits currently.
> In fact, despite some ups and downs over the past several decades, today’s real average wage (that is, the wage after accounting for inflation) has about the same purchasing power it did 40 years ago.
Let's use the actual numbers [1] instead of a statement from 5 years ago that things are "about the same" as 40 years before.
The average hourly wage for Production and Nonsupervisory Employees in the highest month of 1970 was $3.50, or $26.88 in current dollars. The current average hourly wage is $28.96.
Thus, real wages are higher today than they were in 1970.
Business Insider[0] and WSJ[1][2] have reported on this over the years.
I also do not think its fair to discount away people who live in "highly desirable" urban environments. Beyond a simple dislike of that idea, most of the jobs that do pay over 100K existed near them for decades, and with RTO in full swing, it seems most of them are going back to those cities one way or another. WFH does not appear to be a permanent boon for employees at large. Given this reality, the metrics around those cities are important to consider as well.
The Journal article profiles people choosing not to buy. I did the same in New York—I couldn’t make the rent v. buy math work.
> do not think its fair to discount away people who live in "highly desirable" urban environments
I’m not if they’re reasonable. I am if they want three bedrooms and a yard and amenities in the hottest neighbourhood that means they make zero compromises for urban living. You can buy a solid one-bedroom co-op in Manhattan for less than $750k, in some places less than $500k.
I know we can all think of people being unreasonable, but I don't trust that its the norm, given my own experiences in trying to get out of the rent cycle and others I've talked to.
We aren't all trying to get 3 bed w/ a yard and amenities in the ultra desirable neighborhoods. I'd take a 2 bedroom in a safe neighborhood that maybe even doesn't have a yard (or has a really small one) and I can't even come at that reasonably
EDIT: I work and live in a Tier 2 city where home prices are a median of 500K. This isn't SF, Manhattan or Seattle etc.
In 1960 61%[0] of Americans owned their own home, it’s around 66%[1] now. Go back to before WW2 and you’ll see a homeowner rate in the 40% (which makes sense as our current public policy was largely enacted post war).
When people say home ownership rates are down they are comparing it to the pre-2008 bubble deflate when it was a whopping 3% more homeowners. We have more homeowners now than during the childhood of any of the home owning cohort.
That is to say we don’t have record low home ownership rates, we have rates within the normal band for our current public policy.
It’s not the percentage one should be concerned with but rather who’s owning the homes. It is skewing older and older as people in their 30s get locked out of the market, and it’s harder for people even younger beyond that. The median age of home owners has steadily been rising.
For many, and increasingly i think will be the majority unless something changes, the first home they buy is simply going to be the only one, as well. The rates of people moving homes has dropped steadily as well, as people can’t afford to own a home and then upgrade to a newer / different one down the line
One of the most mind-boggling things I've seen is Googlers making $500k (presumably with spouses making a comparable amount) whining on internal sites about not getting raises and how they're being paid under market rate. By all means, quit and go somewhere else if you want more money. But also understand how entitled and greedy you sound.
If you allow me a lack of precision, that's high-end L5 pay (in a "premium plus" location), or low-end L6 pay. There are lots of L5s and L6s at Google.
I used to run a web forum for friends from high school.
Guys in tech making 300+k a year whining about how it's so hard to afford just the basics in America. Also with wives with great careers.
(The basics include 30-40k/year private school for grade schoolers)
Without a single exception, the essentials which are non-negotiable to these folks are things they themselves grew up without. They all went to public school! With me! It's wild.
> the essentials which are non-negotiable to these folks are things they themselves grew up without. They all went to public school
I recently had this conversation with a high school friend. We went to public schools, and both to college on scholarships.
She is beyond her wits about how to afford $100k/kid/year in San Francisco for their private tennis lessons and tutoring and counselling and summer camps (where the kids come home at night?! So you also need a sitter?) and god knows what else. Like, it’s terrific you’re giving them these experiences. But it’s not a necessity.
It's not a necessity, but also understandable that if you had that experience yourself you might feel you've failed as a parent if you can't provide that same experience (or better) for your child.
Well, in this market, the median reality is more like 150K max with mandatory return to office in cities with housing shortages and very high cost of living. Maybe if your spouse makes the same you can afford a house, but otherwise, you’re being forced into a shit deal to prop up real estate valuations on commercial and rental properties.
> Guys in tech making 300+k a year whining about how it's so hard to afford just the basics in America. Also with wives with great careers.
I suppose it depends where you live, whether you own your own home, and how many kids you've popped out. I paid off my house in 5 years while making maybe 65k$/year on average, and with that out of the way, my current ~120k$/year provides enough that I find it difficult to invest fast enough (ADHD brain would rather be writing lisp interpreters than picking stonks).
Do I worry about money? Sure. Health insurance costs could go up, I could lose my job, my kid could take up some expensive hobbies, like wanting to go to college someday.
I realize I was pretty lucky to find a decent and steady (if underpaying) programming job a year after leaving college with no debt (inexpensive state college, parents paid for most of it), to time my decision to buy a house well (thanks for the free 8k$, Obama!), and to have the financial sense to pay that shit off ASAP. So I'm sympathetic to people making the same or less than me who have more debt or who have less fortunate family to support. But it's hard for me to imagine how someone making 300k$/year would have anything to complain about! Tech bros can work remotely, now. Get tf out of San Francisco and stop buying a 15$ latte every morning.
Let's just say, how many kids (generally 1 or 2) and where they lived (not that pricy in the scheme of things), and the cost of their houses were discussed.
But also - where they lived, even if their housing prices were high for the area (500k home for one, maybe 350k for the other), that's the choice they made. They didn't have to; they felt living that way was again a must-have for some reason.
As you can see, when you start adding up the numbers, these are not SFO/NYC paupers.
> (The basics include 30-40k/year private school for grade schoolers)
In addition to location and other comments, this is also a manifestation of the parents feeling the larger macroeconomic trends. The divide between haves and have nots, and the shrinking middle class are pushing parents to drive their kids to be upper class at all costs.
Whether or not true, going to public school and community college (or no college at all gasp) looks to be parents to be setting their kids up for a life of struggle.
That makes a certain degree of logical sense, but doesn't really pan out in practice. According to the US Census Bureau, the median household income for New York City (all 5 boroughs) was $67,997 in 2021. This is actually less than the New York state median income of $74,314. By demographic breakdown, married-couples families with children do fare better: median income $106,000. Families fall somewhere in the middle, at $80,220. Non-family households are worst off, at $52,862 (probably not coincidentally, a figure that is roughly half the median income of a married couple family).[0]
All this to say that cities are great hubs of productivity, but the resulting output is not necessarily evenly distributed. "Pay more per capita" isn't really the figure you should look at when actual income figures are out there.
It's also true that better paying jobs are just more common in higher COL areas so the net effect of the higher pay is diminished by the ridiculous costs of housing etc. in major cities.
There is also value in having more jobs available to you in case you lose your current job. I suspect that is a big variable in people’s calculations, volatility of income. It is a huge risk moving somewhere that is economically stagnant.
100% that's why people keep moving to cities despite all the issues they may have with them and the (sub)urban living standards, it's just way easier to get another job when your company decides to kick you to the curb.
I think rent is the big wildcard. People who bought prior to 2021 or so are far better off than people who've been chosing to rent.
My mortgage in 2015 was $1050 a month. I sold it in 2019, and today it rents for $2500, but likely could rent for more given that apartments in the area are now at 2k...
That extra 18k/yr is going to affect how comfortable a house making say, 70k, feels at the moment.
Because FLSA exemptions were intended for higher-wage white collar employees who were compensated well enough that they didn't need overtime pay. The median is a very logical frame of reference for this.
“Needs” overtime pay is quite loaded. Nobody needs overtime in the US compared to quality of life of Bangladeshi garment workers and rice farmers.
The relevant question is do we want employees in America to be able to work 40, 60, 80, and 100 hours per week for $55k per year and the quality of life that goes with it.
I would say a more logical frame of reference is being sufficiently high up such that you can increase budgets and payrates, so as to ensure business leaders are incentivized to sufficiently spend on staffing.
My use of "need" here is not referring to Maslow's hierarchy, but our society's standards of labor law.
I personally don't believe that people should be working 80 hours per week for $55k, but, adjusted for inflation, I have done it.
However, I definitely don't think that companies should be permitted to force people to work 100 hours per week for $36k, which is what the DOL is prohibiting here.
> a more logical frame of reference is being sufficiently high up such that you can increase budgets and payrates
It's not a frame of reference unless it is a number.
Someone who works 100 hours every week (60 hours of 1.5x overtime) at minimum wage makes $49010/year, so anyone making more than that in salary could just have their hourly rate set to the one that produces the same pay they get now. But then they'd have to do a bunch of inconvenient paperwork to track their hours, and lose part of their compensation if they don't actually average 100 hours every week.
I am not sure what the point is, but if this theoretical person were willing to work for $7.25 per hour, then they would not be offered to be paid a $55k salary anyway.
Of course, the federal minimum wage is also needs to be updated, but I don’t think that has any bearing on increasing the exempt salary threshold.
> if this theoretical person were willing to work for $7.25 per hour, then they would not be offered to be paid a $55k salary anyway.
If you work 100 hours a week for a $55k salary, you are averaging ~$10.50/hour, which is ~$8.10/hour base pay when 60/100 of the hours are overtime, and so more than federal minimum wage. If you uniformly work for that number of hours and then make that amount of money, neither the employer nor the employee really cares if you call it $55k salary or $8.10/hour with overtime.
Except that if you call it the latter, the employer may try to limit your hours, or you may need to work less once in a while for personal reasons which the employer may be tolerant of from time to time but once the law forces hourly accounting it means that comes out of your pay.
It also means you may get less of any other benefits that are paid based on your hourly wage instead of your salary once one is defined and turns out to be lower than the equivalent salary would normally imply.
Laws like this are really weird when all they do is force the same transaction to be written in different terms, which is nothing but a new opportunity for the employer to write the contract in a way that benefits them and the employee may not understand or notice until after the consequences manifest.
No, the ~$55k the GP was referring to isn’t the median household income (which is about $70k), but an annualization of the median weekly pay for full-time employed workers. Which would be the same as the median individual income (at least wage/salary income) if every person was employed full-time for the whole year. Which, of course, is very much not the case.
Oh, good catch. I assumed it was the median household income because it wasn't the median personal income and the former is commonly mistaken for it because it comes up if you search for "median income" in many cases.
people can get ahead with 30k salaries or never get ahead with 500K salaries. Getting ahead has more to do with life style choices than salaries on an absolute number. How many people who "can't get ahead" have $1000 iPhones with $100/yr plans? How many people who "can't get ahead" have $300-$400 car payments? How many people who "can't get ahead" live alone in an apartment rather than have roommates? How many people choose "luxury apartments"? You can easily outspend your salary of any size, then complain you can't get ahead?
Their numbers are off, but their overall point is solid:
Many people who complain about how expensive everything is are spending money objectively pretty recklessly. They can't get ahead because they also cannot sacrifice.
It’s pretty much a textbook example of why Adam Smith (of all people) hated landlords and saw them as a parasitic drag on market economies. We’ve allowed people speculating on real estate to wildly distort every aspect of our economy to the point that it’s destroying actually productive sectors.
The speculation is mostly irrelevant and wouldn't even be happening if the expectation wasn't that the cost of housing would rise faster than the overall market. The real problem is laws that make it impossible or prohibitively expensive to build new housing, which constrains supply.
The speculators are going to lose their shirts when the unsustainability of housing costs growing faster than wages forces a response, and they're going to deserve to.
You have the causality backwards here. Speculators pay politicians to enact laws that preserve the value of their investments, which results in the shortages. Given that most of the political class are also real estate speculators, I wouldn’t bet on them losing their shirts any time soon. They’ll let many more people die on the streets and sic cops on them before they’ll cave to popular pressure.
The speculators people are referring to are investment funds, which are a relatively recent development. The original source of these laws was ordinary homeowners who bought a home to live in but then enacted local regulations to raise housing prices now that they own one.
Right now housing costs are high because the market is gridlocked. Existing owners can't sell because they can't buy, because the interest rate on the new mortgage would be much higher than their existing one. No inventory on the market keeps prices high. But it also promotes construction and promotes political change to enable construction, because both the buyer and the gridlocked seller want something to change.
Then some time passes and the combination of new construction and the low interest loans deterring sales getting paid off and reticent sellers being forced to move because they can't hold out any longer brings inventory back to the market. Which at prevailing interest rates ordinary buyers can't pay today's prices for, so prices go down and speculators lose.
The theory is that speculators with political power will prevent this and keep prices going up because they historically have, but that is unsustainable because then people can't afford housing and people owning housing is what creates the political demand for high housing prices. As soon as it starts to shift to being owned by non-occupants, local voters have no interest in raising the value of their landlord's investment and the laws change.
It’s doesn’t really matter the source of the law, only whom leverages or extends them to serve their specific ends. The same institutional investors you cite are also buying up construction capacity with the express purpose of building rentals vs. homes to purchase. Perpetually siphoning off the wealth of workers is being turned into a highly-financialized, internationalized asset.
I would also say your assessment of how politicians respond to people with money vs. those without is fairly naive.
> The same institutional investors you cite are also buying up construction capacity with the express purpose of building rentals vs. homes to purchase.
That still increases the housing supply and ultimately lowers prices.
> Perpetually siphoning off the wealth of workers is being turned into a highly-financialized, internationalized asset.
Which is exactly the mistake they're making, because the laws that prop up the value of those "assets" are local laws which hold because they're supported by local voters who are homeowners. Make the local voters tenants and the property owners non-constituents and what do the local politicians do?
> I would also say your assessment of how politicians respond to people with money vs. those without is fairly naive.
Politicians respond to things that get them reelected. That's often donors because money lets them buy advertising and get more votes.
But that mainly applies to two kinds of issues. The kind that affect most people only a trivial amount but the donors a lot, in which case it won't change many votes. And the kind that affect a small number of people a lot, but they don't have many votes to change. In each of these cases the donor's money buys them more votes through advertising than they lose through screwing people.
Housing is an issue that affects most people by a significant amount.
And the structure of how it got the way it is isn't amenable to the way they exercise power. Supply is limited because local jurisdictions all have a similar incentive structure. The people who can vote there already live there, so when the people who live there are homeowners, they vote to raise local housing prices. The same obtains everywhere so housing prices go up everywhere.
But a single locality can reduce regional housing prices by enabling a large amount of construction, because people will move there from any place within an hour's drive if it will save them a quarter of a million dollars on housing. The status quo is only enabled by nearly every locality having the same incentives. It only takes a small fraction where a majority of local residents want housing prices to go down.
The normal way monied interests prevent this kind of local diversity breaking their monopoly is by capturing the regional or national government. But the only reason the local government could be captured in this way is that you had to be a local resident (and so, historically, already be a local homeowner) before you get a vote there. So they didn't have to overcome the interests of all the prospective buyers who are in some nearby but different jurisdiction. Which is what they would have to do to get a law passed at the state or national level -- which is why the bills proposed at the state and national level on this issue are trending to disrupt rather than uphold the status quo here.
> which is why the bills proposed at the state and national level on this issue are trending to disrupt rather than uphold the status quo here.
There are no state or federal-level laws under consideration or that have been passed that will or even intend to reduce housing prices in line with, say, median income for millennial home buyers (the largest cohort currently affected by the housing shortage). That would require massive, state-directed housing construction on a scale that has only occurred in command economies and possibly pre-war Vienna.
Things like Builders Remedy in California are just intended to shuffle millennials into the perpetually-fleeced asset class I mentioned before. This is obvious from the blatant, algorithmic price-fixing by landlords that was recently exposed and which is much easier to do in the context of large property investment firms, without risking similar backlash.
> That would require massive, state-directed housing construction on a scale that has only occurred in command economies and possibly pre-war Vienna.
The main thing it would take is to eliminate zoning density restrictions. Then someone could buy a single family home near a city, replace it with a 10-story condo, and make a lot of money. Repeat for as long as housing prices are high. There are a lot of people who want to make a lot of money over and over again.
It would also help significantly to streamline the permitting process and reform various NIMBY laws that can hold up construction.
The state doesn't need to "direct" anything -- all they have to do is stop prohibiting it. Building housing when housing prices are high is profitable. You don't need a law to coerce people to do something that makes them money.
> Things like Builders Remedy in California are just intended to shuffle millennials into the perpetually-fleeced asset class I mentioned before.
The Builders Remedy isn't the most well-tailored rule in the world (classic "put arbitrary numbers in something to make it sound managerial" vibe), but it pretty effectively prevents localities from prohibiting new construction. (You might also need something that prevents them from making it prohibitively expensive.)
> This is obvious from the blatant, algorithmic price-fixing by landlords that was recently exposed and which is much easier to do in the context of large property investment firms, without risking similar backlash.
That kind of thing is a joke. It immediately disintegrates as soon as the vacancy rate is above zero because every single landlord has the incentive to defect to fill their empty unit, because a paying tenant at 80% as much rent is 80% more than an empty unit.
Landlords don't have any kind of market power. There are too many of them and anyone with a moderate amount of capital can enter the market. The long-term high prices are entirely from the legal restrictions on creating more supply.
And one of the reason prices are so high right now, even though interest rates are up (which should tend to lower prices), is the gridlock thing. But that's inherently temporary, though it could last for more than a year (during which time it makes new construction even more profitable).
I mean, if we're bringing in phone and car payments, it's hard to call it "objective". Remember that it's expensive to be poor.
Is it cheaper to buy a junker $3500 used car over leasing a $20k car? Yes. (and for the BOTD let's assume both are in good condition and not too driven). Can a poor person afford a $3500 bulk payment over paying some horrible interest rate $300 minimum payment plan? Unfortunately, no. If they are also in an area with horrible public transportation, then you see how this ends.
what cash? That's the issue here. It's already been established that a good half of american's are living paycheck to paycheck. I assure you most aren't rocking new cars nor iphone 15's and still struggle.
I assure you that many of them living pay check to pay check do so because of large car payments, $100/month phone plans, and other recurring fees that add up to quite a bit. Death by a thousand financial cuts is the American way.
> How many people who "can't get ahead" have $300-$400 car payments? How many people who "can't get ahead" live alone in an apartment rather than have roommates? How many people choose "luxury apartments"?
Do you have answers for any of those questions? The general tone of your comment suggests that you can speak with some degree of confidence about what those numbers are.
(And do you have a response for those who are impacted by the problem described but aren't "guilty" of falling into any of the categories you identify? E.g., what is your prescription to the person who isn't buying new iPhones and unreasonably priced cars, and is not prone to generally reckless[1] spending? It's easy to point to the low-hanging fruit that defies your adversary's position. What about the rest of the tree?)
I do have answers, but they aren't comfortable or fashionable. I only have anecdotal experience, but all people I've met who complain they can't afford things are well into the category I describe. Those impacted by the problem who are not guilty of falling into the category certainly do exist. Solutions their problems are tougher and have longer time lines.
How many people who "can't get ahead" stay in their own city all year long to avoid paying for traveling. How many eat out for most meals instead of cooking all their meals. How many eat multiple meals per day instead of saving money by eating less. How many pay rents or expensive mortgages instead of using a PO box as their residence and living in a tent to save money.
There's no problem with affordability, let's point the finger at people who have relatively modest desires and point out that it's "lifestyle creep"
Why the fuck should people (especially the young) compromise when wealth has been systematically stolen by boomers, who then insist that the young must subsidise their lifestyle via pensions?
Posts like yours are the kind of thing that put even people who have been members of conservative parties off capitalism altogether.
> even people making >100K are reporting that they feel like they can't get ahead, let alone people who make less than that.
This law doesn't give most people more money; it incentives employers to restrict work hours to 40 a week. If anything, the output is less take home money.
How many people earning over > $100k are in such a captive position they can't find a job that pays similar per hour but tends to not exceed 40 hours a week?
> This law doesn't give most people more money; it incentives employers to restrict work hours to 40 a week. If anything, the output is less take home money.
Thereby decreasing supply of labor, which would cause the price of labor to increase. Or people to have more time at home with their families and community.
The net effects are likely lower household income across the board as this law systemically harms productivity. For instance, constraing childcare hours constrain parent work hours, etc.
> Or people to have more time at home with their families and community.
Yes this is where I agree you may have positive social benefits.
Problem the feds tend to have is imposing universal rules on an economically diverse country. 50k is good money some places and poverty wages other places. I once joked to my GF that I was going to write a book called, How to be Flat Fucking Broke in San Francisco for only $300/day.
Old idea of mine was for salaried worker payroll taxes and withholding should be based on hours worked. With the employer picking up 100% of the difference.
Example, $100k/year is $50/hour at a standard 40hr/week. If the employer has salaried workers working 50 hours a week. Then the adjusted income subject to taxes is $125k/year. And make the employer pay the difference in taxes and withholding.
There is almost nowhere where "50k is good money". It may be above average in a certain area, but cost of housing has increased broadly nationwide even in rural areas.
Feds only impose a floor. Higher cost states are always welcome to enact higher standards, and they do. Washington’s minimum exempt salary is $65.5k, and California is $65k, plus California requires overtime after 8 hours per day.
Note that the Feds have not even actually increased it yet, it is just proposed and even if it goes into effect, it will probably be 2024 or maybe even later.
But then what is it for? It's representatives from California deciding what the minimum wage should be in Texas and not what it will be in California.
The people in those states in many cases have higher PPP than people in higher cost areas but also have a higher unemployment rate that the externally-imposed floor only makes worse.
If the people in Texas want a higher floor they can enact it themselves. But they don't, and they may not be wrong, because different states have different economies.
> It's representatives from California deciding what the minimum wage should be in Texas and not what it will be in California.
No, it is the United States’ representatives setting a floor for the United States.
> If the people in Texas want a higher floor they can enact it themselves.
If the people in Texas want a lower floor, they are welcome to try and leave the US.
>But they don't, and they may not be wrong, because different states have different economies.
So do different counties and cities and parts of cities. It is all arbitrarily defined, and at the end of the day, might makes right. Hence, feds set the floor in Texas (currently).
That's what it does, not what it's for. Why is it good to force misaligned economic policy on various jurisdictions whose people don't want it?
> No, it is the United States’ representatives setting a floor for the United States.
The United States doesn't have representatives in the national legislature. States and districts do.
> If the people in Texas want a lower floor, they are welcome to try and leave the US.
Or to repeal the national floor, presumably, but then representatives from California try to stop them even though the national floor does not apply to anyone they represent.
> It is all arbitrarily defined, and at the end of the day, might makes right.
I'm not asking for an analysis of electoral math. I'm asking why the federal government should override state and local governments who, representing the will of their own populations, judge such rules to be counterproductive given the state of their local economy.
> I'm asking why the federal government should override state and local governments who, representing the will of their own populations, judge such rules to be counterproductive given the state of their local economy.
Because there is no “correct” size of ruling government, just what gets negotiated. Feds overrule state, and states overrule counties and cities, and counties overrule cities, and cities overrule neighborhood associations, etc.
I dispute the notion that there is no "correct" size of ruling government for a given issue.
There are some issues, like mail fraud, that are not adequately dealt with on a local level because victims and perpetrators may be in different jurisdictions and the jurisdiction of the perpetrator may have no interest in addressing harms to someone outside their constituency.
Then there are issues where the costs and benefits of a given policy are felt predominantly by the local population and have to be tailored to local conditions, for which local policy is a better fit.
(It's also not a law of nature that larger governments overrule smaller ones. You could have a constitution that says that in certain domains the national government can pass defaults that apply unless the local government passes a specific law that says something different. Or that allows the national government to regulate interstate commerce but only actual interstate commerce and explicitly not intra-state commerce.)
The question of where to address a given issue is a matter for debate, but that isn't to say there can be no reasoned justification for doing it in one way or another. And so what I'm asking is, what is the argument for setting this kind of economic policy at the national level, when the optimal policy depends on local conditions and predominantly affects local people?
> Or to repeal the national floor, presumably, but then representatives from California try to stop them even though the national floor does not apply to anyone they represent.
Yes, federal wage and hour law does apply in California, separately and in addition to state law (and in cases where state wage and hour law does not, including to certain actions by the State as an employer.)
The fact that people who comply with State law where it applies will generally not have to worry about federal law because they will also be complying with it doesn’t mean that both don’t apply.
> Problem the feds tend to have is imposing universal rules on an economically diverse country.
Federal policy can and does (not usually in individual-related rules like minimum wage and salary thresholds, but that’s a choice, not a fundamental barrier) take state and local economic conditions into account.
Are there any good studies on OT law trade-offs? Since at steady state the result is capping employee hours at 40, this type of law seems good for workers that want to maintain such a cap and bad for those that want to earn more.
Yes there is. In practice, many jobs have considerable fixed overheads to both employer and employee to you can't be hired for say under 10 hours a week.
For instance, when I had a nanny, absent OT laws, optimal hours for both parties were 45/week. OT laws shifted my preference to 40. There is no 5 hour a week job my nanny could get given fixed overhead.
That is a good example, and 40 is an arbitrary line to draw. However, absent universal basic income, I do not see an easier way for the government to establish a minimum quality of life at work, at least in terms of hours worked.
Smoking hot take but: lower the line to 30. 80 hours a week is an absurd amount of your week taken up working and it is nearly impossible to fit in a M-F schedule of 16 hours between 2 employers. two 30 hour jobs come down to 12 hour work days. Which sucks immensely but is manageable. Especially between a day and night shift.
Then again, asking for 30 hours is also like asking for a 33% pay raise. But there are very slow movements towards 4 day/32 hour work weeks, so maybe this will be a thing in due time.
> Another way for the people who do the work and create the wealth to keep more of it would be for their hourly wages be raised, instead of the profit being expropriated by some heir who wants to fly on a private jet to Bali.
This law has no impact on basic profit incentives. The response is work hour reductions.
The big upside to federal overtime protection of the 40 hour work week is that labor activists stop throwing dynamite at the police and rail bridges. The 40 hour work week was fought and died for.
Pegging to a specific dollar value means this erodes every year (much like minimum wage). This should be pegged to a multiple of minimum wage, or some multiple of median national salary.
You've got it backwards. It's not a ceiling on nonexempt jobs it's a floor for overtime exempt jobs. You're required to pay X in salary in order to categorize someone as a salaried employee as well as the other requirement on the type of work being performed.
It's more a floor on being exempt from overtime. Basically, the thought process is that salaried employees have a different relationship with the employer than others, in that they're more paid to get a job done, rather than for the amount of time worked. These employees also tend to have enough leverage against their employer to come to a fair employment contract.
On the other hand, jobs on the lower end of the spectrum have much less leverage, and are being paid for their time. We, as a society, have a vested interest in companies not working their employees to death, so we discourage companies from overworking their employees, by making them pay extra to employ them more than a full-time job.
The question then becomes: How do we differentiate these two classes of job? If you don't set a firm boundary, employers will pretend even the poor stiff working the nightshift at the gas station Quikmart is in the former category. The main rule for overtime exemption is "are you a professional or in management, or not?", with the 55k floor existing to make sure companies don't get too creative with job title labeling.
The real ceiling on federally-mandated overtime is $107,432, at which point you're making enough that the government trusts you to negotiate advantageous employment terms yourself.
> Why is there an income ceiling on overtime in the US?
There isn’t.
There is a pay (and other conditions) floor on employers being exempt from the general federal requirement to pay overtime at a specified rate. (State law may impose similar requirements even where federal exemptions apply, and even where both federal and state exemptions apply, employers may offer terms that involve overtime pay.)
"President Barack Obama attempted to raise the cut-off in 2016, aiming for $47,476, but that was ultimately blocked by a federal judge over states' concerns that the new threshold would increase their costs."
That's not why Obama's attempt to raise the cut-off was blocked. The federal law governing this exempts anyone employed in a "bona fide executive, administrative or professsional capacity" and only gives the administrative branch the power to set rules like minimum pay if they're aimed at ensuring exempt employees do actually fall into those categories. The main stated benefit of raising the cut-off, according to the official documents from the Obama administration explaining it, was that it would force employers to pay overtime to people who genuinely were conducting this kind of exempt work. Actually forcing employers to pay overtime to people who weren't carrying out exempt work was described as a more minor secondary benefit. That was a plain and straightforward violation of the letter of the law. Most of the US press just avoided talking about this part of the court rulings at all, presumably for partisan reasons.
Why should there be a ceiling on this at all? Just because someone makes more money does not mean it should be acceptable to abuse their time in the workplace. Most people earn high incomes, not because they signed up to meet arbitrary demands, but because they invested in education and training, and/or agreed to take on a high level of responsibility.
This concept of "eligibility for overtime" is so far beyond reason that it looks shocking even for the ultra low American standards. Having a law that literally forbids worker compensation would be a reason to remove government almost anywhere in the world. It's like something from a Monty Python sketch, produced in the building next to the Silly Walks department.
The only people "not eligible for overtime" are those that cannot work overtime due to medical (or other similar) reasons.
> Having a law that literally forbids worker compensation
The law doesn’t forbid overtime for people making over the listed amount, it means that employers aren’t federally mandated to pay overtime (and certain other things) for employees making above a certain base-pay threshold.
Not only is it allowed to pay overtime to people making over the federal threshold, there are states where it is mandatory – just as with minimum wage, there are states that have exemption pay thresholds (and other exemption requirements) that make many federally-exempt jobs not exempt under state law, such that overtime pay is still required.
The ceiling makes sense because a high salary is a reasonable proxy for individual bargaining power. I'm sure I could convince my manager to let me work strictly 9-5 in exchange for halving my salary (which would still put me over the 55k mark).
1. Yes, when you have a hard cutoff for anything you get strange behaviors near the boundaries.
2. Are you saying there should be no cutoff (graduated or hard) anywhere, so that CEOs with total-compensation in the millions get paid overtime?
3. At a 40 hour week that's about $30 per hour, quadruple the federal minimum wage[A]. If you are salaried and making more than quadruple the minimum wage than you are more likely to have negotiating power than if you are making less than quadruple the minimum wage.
4. There's also a disconnect between the law and actual company behavior; the salary is only one test in the law; companies often give bogus job titles to reclassify non-exempt employees as exempt. This is rather clearly illegal.
A: Yes states can set higher minimum wages. They can also place extra restrictions on who is exempt from overtime laws (and probably should do so in this case) TFA is about federal law, so I'm addressing it as such.
Not sure if you saw the edit, but I live in what is traditionally considered a Tier 2 city (Portland area) by most (all?) accounts.
I face prices that are more appropriate for a Tier 1 city, and constraints more appropriate for a Tier 1 city, without the adjustments to wages of a Tier 1 city. This isn't wholly unique to Portland either.
Some of this is policy, some of this is locality, some of it is state quirks, but generally speaking, policy does not reflect reality no matter where you look
Portland actually has the tech jobs and salaries to stoke its housing prices, or no one could afford them. But I get the feeling that lower end wages must be less than Seattle given how much more affordable the restaurants are, that non tech jobs aren’t keeping up.
Overtime pay should be normal for everyone that works more than the 8 hours. Being on call is a travesty. Just have shifts like every other industry does.
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[ 0.25 ms ] story [ 183 ms ] threadI assume anyone with a customer facing “manager” title is just the on call employee who trades their ability to earn overtime for less volatility in their pay (salary).
This is especially prevalent in immigrant communities with chain migration where the more recent families that migrate are expected operate a convenience store/gas station/motel/laundromat/franchise restaurant/etc day and night 7 days per week in exchange for the minimum allowed exempt salary.
Edit: I think HN misunderstood my comment. It was a joke, not an accusation.
It should also apply to more than 8 hours per day like it does in California.
> I assume anyone with a customer facing “manager” title is just the on call employee who trades their ability to earn overtime for less volatility in their pay (salary).
Whoever is telling them that they can only hire people at minimum wage plus $1 or $2 is the manager. I don’t mind if they are exempt from overtime pay, since they would actually have to be the ones working on call when short staffed…rather than sit behind a desk adjusting spreadsheets.
Manager for most retail and food service are people who just pick up the slack when someone calls out or the chain is understaffed (aka 100% of the time).
If they are lucky, they do the hiring and firing, but that means you have to make hard decisions about how much free time you will have.
I think its great that they're updating this, but they should of increased it by 2/3s at least
I know people making $5+ million who say the same. This is the human condition. Anecdotes of not getting ahead and personal strife are terrible inputs for economic policy.
American GDP per capita is about $75k [1]. Median household income around $70k [2]. If you want natural figure to revolve around, those are good ones.
[1] https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location...
[2] https://www.census.gov/library/publications/2022/demo/p60-27...
The cost of living is rising fast enough that the majority of people making between 100K and 250K are feeling like they can't get ahead, with record low numbers of home ownership (not just single family homes either, but condos etc) among this group of traditionally "automatic" home buyers, as well as record lows of asset accumulation.
The dollar just isn't going as far as it used to, and there is no signs of that letting up any time soon, even with rising interest rates, you see no knock off effects on things like grocery prices or home prices, even though corporations are making record profits currently.
Source? I see evidence of this in supply-restricted cities. But not in the country broadly.
> dollar just isn't going as far as it used to
Real wages are near historical highs and at par with the pre-Covid economy.
https://www.pewresearch.org/short-reads/2018/08/07/for-most-...
That's 1980x, not 1970x, but should be close.
The average hourly wage for Production and Nonsupervisory Employees in the highest month of 1970 was $3.50, or $26.88 in current dollars. The current average hourly wage is $28.96.
Thus, real wages are higher today than they were in 1970.
[1] https://fred.stlouisfed.org/series/AHETPI
I also do not think its fair to discount away people who live in "highly desirable" urban environments. Beyond a simple dislike of that idea, most of the jobs that do pay over 100K existed near them for decades, and with RTO in full swing, it seems most of them are going back to those cities one way or another. WFH does not appear to be a permanent boon for employees at large. Given this reality, the metrics around those cities are important to consider as well.
[0]: https://www.businessinsider.com/how-much-to-buy-house-six-fi...
[1]: https://www.wsj.com/articles/three-million-u-s-households-ma...
[2]: Tried getting an archive link for WSJ but it kept failing. I know its paywalled, will comment if I get a working link
> do not think its fair to discount away people who live in "highly desirable" urban environments
I’m not if they’re reasonable. I am if they want three bedrooms and a yard and amenities in the hottest neighbourhood that means they make zero compromises for urban living. You can buy a solid one-bedroom co-op in Manhattan for less than $750k, in some places less than $500k.
We aren't all trying to get 3 bed w/ a yard and amenities in the ultra desirable neighborhoods. I'd take a 2 bedroom in a safe neighborhood that maybe even doesn't have a yard (or has a really small one) and I can't even come at that reasonably
EDIT: I work and live in a Tier 2 city where home prices are a median of 500K. This isn't SF, Manhattan or Seattle etc.
[2]: Tried getting an archive link for WSJ but it kept failing. I know its paywalled, will comment if I get a working link
https://archive.is/vnM52 : Three Million U.S. Households Making Over $150,000 Are Still Renters
Doesn't matter when real expenses have grown almost 4x faster than real incomes over the last 90 years.
•1933 median individual income: $3,800/y
•1933 median house price: $3,800
•2023 median income: $85,000/y
•2023 median house price: $410,000
1933 was in the midst of the Great Depression which would have greatly affected both income and expenses.
When people say home ownership rates are down they are comparing it to the pre-2008 bubble deflate when it was a whopping 3% more homeowners. We have more homeowners now than during the childhood of any of the home owning cohort.
That is to say we don’t have record low home ownership rates, we have rates within the normal band for our current public policy.
[0] https://www2.census.gov/programs-surveys/decennial/tables/ti...
[1] https://fred.stlouisfed.org/series/RHORUSQ156N
For many, and increasingly i think will be the majority unless something changes, the first home they buy is simply going to be the only one, as well. The rates of people moving homes has dropped steadily as well, as people can’t afford to own a home and then upgrade to a newer / different one down the line
Guys in tech making 300+k a year whining about how it's so hard to afford just the basics in America. Also with wives with great careers.
(The basics include 30-40k/year private school for grade schoolers)
Without a single exception, the essentials which are non-negotiable to these folks are things they themselves grew up without. They all went to public school! With me! It's wild.
I recently had this conversation with a high school friend. We went to public schools, and both to college on scholarships.
She is beyond her wits about how to afford $100k/kid/year in San Francisco for their private tennis lessons and tutoring and counselling and summer camps (where the kids come home at night?! So you also need a sitter?) and god knows what else. Like, it’s terrific you’re giving them these experiences. But it’s not a necessity.
Of course in reality that's not true.
I suppose it depends where you live, whether you own your own home, and how many kids you've popped out. I paid off my house in 5 years while making maybe 65k$/year on average, and with that out of the way, my current ~120k$/year provides enough that I find it difficult to invest fast enough (ADHD brain would rather be writing lisp interpreters than picking stonks).
Do I worry about money? Sure. Health insurance costs could go up, I could lose my job, my kid could take up some expensive hobbies, like wanting to go to college someday.
I realize I was pretty lucky to find a decent and steady (if underpaying) programming job a year after leaving college with no debt (inexpensive state college, parents paid for most of it), to time my decision to buy a house well (thanks for the free 8k$, Obama!), and to have the financial sense to pay that shit off ASAP. So I'm sympathetic to people making the same or less than me who have more debt or who have less fortunate family to support. But it's hard for me to imagine how someone making 300k$/year would have anything to complain about! Tech bros can work remotely, now. Get tf out of San Francisco and stop buying a 15$ latte every morning.
But also - where they lived, even if their housing prices were high for the area (500k home for one, maybe 350k for the other), that's the choice they made. They didn't have to; they felt living that way was again a must-have for some reason.
As you can see, when you start adding up the numbers, these are not SFO/NYC paupers.
In addition to location and other comments, this is also a manifestation of the parents feeling the larger macroeconomic trends. The divide between haves and have nots, and the shrinking middle class are pushing parents to drive their kids to be upper class at all costs.
Whether or not true, going to public school and community college (or no college at all gasp) looks to be parents to be setting their kids up for a life of struggle.
One major issue is CPI doesn't seem to effectively capture cost of living.
In practice, home ownership is effectively unattainable for a majority of household incomes in the US now.
Most major metro areas are more productive and pay more per capita.
All this to say that cities are great hubs of productivity, but the resulting output is not necessarily evenly distributed. "Pay more per capita" isn't really the figure you should look at when actual income figures are out there.
[0] https://data.census.gov/profile?g=160XX00US3651000#income-an...
My mortgage in 2015 was $1050 a month. I sold it in 2019, and today it rents for $2500, but likely could rent for more given that apartments in the area are now at 2k...
That extra 18k/yr is going to affect how comfortable a house making say, 70k, feels at the moment.
https://www.firstrepublic.com/insights-education/how-much-do...
The relevant question is do we want employees in America to be able to work 40, 60, 80, and 100 hours per week for $55k per year and the quality of life that goes with it.
I would say a more logical frame of reference is being sufficiently high up such that you can increase budgets and payrates, so as to ensure business leaders are incentivized to sufficiently spend on staffing.
I personally don't believe that people should be working 80 hours per week for $55k, but, adjusted for inflation, I have done it.
However, I definitely don't think that companies should be permitted to force people to work 100 hours per week for $36k, which is what the DOL is prohibiting here.
> a more logical frame of reference is being sufficiently high up such that you can increase budgets and payrates
It's not a frame of reference unless it is a number.
Of course, the federal minimum wage is also needs to be updated, but I don’t think that has any bearing on increasing the exempt salary threshold.
If you work 100 hours a week for a $55k salary, you are averaging ~$10.50/hour, which is ~$8.10/hour base pay when 60/100 of the hours are overtime, and so more than federal minimum wage. If you uniformly work for that number of hours and then make that amount of money, neither the employer nor the employee really cares if you call it $55k salary or $8.10/hour with overtime.
Except that if you call it the latter, the employer may try to limit your hours, or you may need to work less once in a while for personal reasons which the employer may be tolerant of from time to time but once the law forces hourly accounting it means that comes out of your pay.
It also means you may get less of any other benefits that are paid based on your hourly wage instead of your salary once one is defined and turns out to be lower than the equivalent salary would normally imply.
Laws like this are really weird when all they do is force the same transaction to be written in different terms, which is nothing but a new opportunity for the employer to write the contract in a way that benefits them and the employee may not understand or notice until after the consequences manifest.
¯\_(ツ)_/¯
https://fred.stlouisfed.org/series/MEPAINUSA672N
A $300/400 car payment? You do realize most new cars are well over $20k if not $30k now?
So what, folks should continuously strive for poverty and we're ok with that?
Many people who complain about how expensive everything is are spending money objectively pretty recklessly. They can't get ahead because they also cannot sacrifice.
Effective discretionary income for the vast majority of people has shrunk significantly due to how expensive housing has become.
Yeah, people can sacrifice but folks are sacrificing MUCH more now than they've had to in the last 30+ years.
The speculators are going to lose their shirts when the unsustainability of housing costs growing faster than wages forces a response, and they're going to deserve to.
Right now housing costs are high because the market is gridlocked. Existing owners can't sell because they can't buy, because the interest rate on the new mortgage would be much higher than their existing one. No inventory on the market keeps prices high. But it also promotes construction and promotes political change to enable construction, because both the buyer and the gridlocked seller want something to change.
Then some time passes and the combination of new construction and the low interest loans deterring sales getting paid off and reticent sellers being forced to move because they can't hold out any longer brings inventory back to the market. Which at prevailing interest rates ordinary buyers can't pay today's prices for, so prices go down and speculators lose.
The theory is that speculators with political power will prevent this and keep prices going up because they historically have, but that is unsustainable because then people can't afford housing and people owning housing is what creates the political demand for high housing prices. As soon as it starts to shift to being owned by non-occupants, local voters have no interest in raising the value of their landlord's investment and the laws change.
I would also say your assessment of how politicians respond to people with money vs. those without is fairly naive.
That still increases the housing supply and ultimately lowers prices.
> Perpetually siphoning off the wealth of workers is being turned into a highly-financialized, internationalized asset.
Which is exactly the mistake they're making, because the laws that prop up the value of those "assets" are local laws which hold because they're supported by local voters who are homeowners. Make the local voters tenants and the property owners non-constituents and what do the local politicians do?
> I would also say your assessment of how politicians respond to people with money vs. those without is fairly naive.
Politicians respond to things that get them reelected. That's often donors because money lets them buy advertising and get more votes.
But that mainly applies to two kinds of issues. The kind that affect most people only a trivial amount but the donors a lot, in which case it won't change many votes. And the kind that affect a small number of people a lot, but they don't have many votes to change. In each of these cases the donor's money buys them more votes through advertising than they lose through screwing people.
Housing is an issue that affects most people by a significant amount.
And the structure of how it got the way it is isn't amenable to the way they exercise power. Supply is limited because local jurisdictions all have a similar incentive structure. The people who can vote there already live there, so when the people who live there are homeowners, they vote to raise local housing prices. The same obtains everywhere so housing prices go up everywhere.
But a single locality can reduce regional housing prices by enabling a large amount of construction, because people will move there from any place within an hour's drive if it will save them a quarter of a million dollars on housing. The status quo is only enabled by nearly every locality having the same incentives. It only takes a small fraction where a majority of local residents want housing prices to go down.
The normal way monied interests prevent this kind of local diversity breaking their monopoly is by capturing the regional or national government. But the only reason the local government could be captured in this way is that you had to be a local resident (and so, historically, already be a local homeowner) before you get a vote there. So they didn't have to overcome the interests of all the prospective buyers who are in some nearby but different jurisdiction. Which is what they would have to do to get a law passed at the state or national level -- which is why the bills proposed at the state and national level on this issue are trending to disrupt rather than uphold the status quo here.
There are no state or federal-level laws under consideration or that have been passed that will or even intend to reduce housing prices in line with, say, median income for millennial home buyers (the largest cohort currently affected by the housing shortage). That would require massive, state-directed housing construction on a scale that has only occurred in command economies and possibly pre-war Vienna.
Things like Builders Remedy in California are just intended to shuffle millennials into the perpetually-fleeced asset class I mentioned before. This is obvious from the blatant, algorithmic price-fixing by landlords that was recently exposed and which is much easier to do in the context of large property investment firms, without risking similar backlash.
The main thing it would take is to eliminate zoning density restrictions. Then someone could buy a single family home near a city, replace it with a 10-story condo, and make a lot of money. Repeat for as long as housing prices are high. There are a lot of people who want to make a lot of money over and over again.
It would also help significantly to streamline the permitting process and reform various NIMBY laws that can hold up construction.
The state doesn't need to "direct" anything -- all they have to do is stop prohibiting it. Building housing when housing prices are high is profitable. You don't need a law to coerce people to do something that makes them money.
> Things like Builders Remedy in California are just intended to shuffle millennials into the perpetually-fleeced asset class I mentioned before.
The Builders Remedy isn't the most well-tailored rule in the world (classic "put arbitrary numbers in something to make it sound managerial" vibe), but it pretty effectively prevents localities from prohibiting new construction. (You might also need something that prevents them from making it prohibitively expensive.)
> This is obvious from the blatant, algorithmic price-fixing by landlords that was recently exposed and which is much easier to do in the context of large property investment firms, without risking similar backlash.
That kind of thing is a joke. It immediately disintegrates as soon as the vacancy rate is above zero because every single landlord has the incentive to defect to fill their empty unit, because a paying tenant at 80% as much rent is 80% more than an empty unit.
Landlords don't have any kind of market power. There are too many of them and anyone with a moderate amount of capital can enter the market. The long-term high prices are entirely from the legal restrictions on creating more supply.
And one of the reason prices are so high right now, even though interest rates are up (which should tend to lower prices), is the gridlock thing. But that's inherently temporary, though it could last for more than a year (during which time it makes new construction even more profitable).
Is it cheaper to buy a junker $3500 used car over leasing a $20k car? Yes. (and for the BOTD let's assume both are in good condition and not too driven). Can a poor person afford a $3500 bulk payment over paying some horrible interest rate $300 minimum payment plan? Unfortunately, no. If they are also in an area with horrible public transportation, then you see how this ends.
They can't sacrifice what they don't have.
what cash? That's the issue here. It's already been established that a good half of american's are living paycheck to paycheck. I assure you most aren't rocking new cars nor iphone 15's and still struggle.
Do you have answers for any of those questions? The general tone of your comment suggests that you can speak with some degree of confidence about what those numbers are.
(And do you have a response for those who are impacted by the problem described but aren't "guilty" of falling into any of the categories you identify? E.g., what is your prescription to the person who isn't buying new iPhones and unreasonably priced cars, and is not prone to generally reckless[1] spending? It's easy to point to the low-hanging fruit that defies your adversary's position. What about the rest of the tree?)
1. Previously: <https://news.ycombinator.com/item?id=25467900#25468799>
How many people who "can't get ahead" stay in their own city all year long to avoid paying for traveling. How many eat out for most meals instead of cooking all their meals. How many eat multiple meals per day instead of saving money by eating less. How many pay rents or expensive mortgages instead of using a PO box as their residence and living in a tent to save money.
There's no problem with affordability, let's point the finger at people who have relatively modest desires and point out that it's "lifestyle creep"
/s
none of the people I know, that's for sure
>How many people who "can't get ahead" live alone in an apartment rather than have roommates?
the ones with kids, unfortunately.
Posts like yours are the kind of thing that put even people who have been members of conservative parties off capitalism altogether.
This law doesn't give most people more money; it incentives employers to restrict work hours to 40 a week. If anything, the output is less take home money.
How many people earning over > $100k are in such a captive position they can't find a job that pays similar per hour but tends to not exceed 40 hours a week?
Thereby decreasing supply of labor, which would cause the price of labor to increase. Or people to have more time at home with their families and community.
The net effects are likely lower household income across the board as this law systemically harms productivity. For instance, constraing childcare hours constrain parent work hours, etc.
> Or people to have more time at home with their families and community.
Yes this is where I agree you may have positive social benefits.
Old idea of mine was for salaried worker payroll taxes and withholding should be based on hours worked. With the employer picking up 100% of the difference.
Example, $100k/year is $50/hour at a standard 40hr/week. If the employer has salaried workers working 50 hours a week. Then the adjusted income subject to taxes is $125k/year. And make the employer pay the difference in taxes and withholding.
Note that the Feds have not even actually increased it yet, it is just proposed and even if it goes into effect, it will probably be 2024 or maybe even later.
But then what is it for? It's representatives from California deciding what the minimum wage should be in Texas and not what it will be in California.
The people in those states in many cases have higher PPP than people in higher cost areas but also have a higher unemployment rate that the externally-imposed floor only makes worse.
If the people in Texas want a higher floor they can enact it themselves. But they don't, and they may not be wrong, because different states have different economies.
Setting a national floor.
> It's representatives from California deciding what the minimum wage should be in Texas and not what it will be in California.
No, it is the United States’ representatives setting a floor for the United States.
> If the people in Texas want a higher floor they can enact it themselves.
If the people in Texas want a lower floor, they are welcome to try and leave the US.
>But they don't, and they may not be wrong, because different states have different economies.
So do different counties and cities and parts of cities. It is all arbitrarily defined, and at the end of the day, might makes right. Hence, feds set the floor in Texas (currently).
That's what it does, not what it's for. Why is it good to force misaligned economic policy on various jurisdictions whose people don't want it?
> No, it is the United States’ representatives setting a floor for the United States.
The United States doesn't have representatives in the national legislature. States and districts do.
> If the people in Texas want a lower floor, they are welcome to try and leave the US.
Or to repeal the national floor, presumably, but then representatives from California try to stop them even though the national floor does not apply to anyone they represent.
> It is all arbitrarily defined, and at the end of the day, might makes right.
I'm not asking for an analysis of electoral math. I'm asking why the federal government should override state and local governments who, representing the will of their own populations, judge such rules to be counterproductive given the state of their local economy.
Because there is no “correct” size of ruling government, just what gets negotiated. Feds overrule state, and states overrule counties and cities, and counties overrule cities, and cities overrule neighborhood associations, etc.
There are some issues, like mail fraud, that are not adequately dealt with on a local level because victims and perpetrators may be in different jurisdictions and the jurisdiction of the perpetrator may have no interest in addressing harms to someone outside their constituency.
Then there are issues where the costs and benefits of a given policy are felt predominantly by the local population and have to be tailored to local conditions, for which local policy is a better fit.
(It's also not a law of nature that larger governments overrule smaller ones. You could have a constitution that says that in certain domains the national government can pass defaults that apply unless the local government passes a specific law that says something different. Or that allows the national government to regulate interstate commerce but only actual interstate commerce and explicitly not intra-state commerce.)
The question of where to address a given issue is a matter for debate, but that isn't to say there can be no reasoned justification for doing it in one way or another. And so what I'm asking is, what is the argument for setting this kind of economic policy at the national level, when the optimal policy depends on local conditions and predominantly affects local people?
Yes, federal wage and hour law does apply in California, separately and in addition to state law (and in cases where state wage and hour law does not, including to certain actions by the State as an employer.)
The fact that people who comply with State law where it applies will generally not have to worry about federal law because they will also be complying with it doesn’t mean that both don’t apply.
Which means that the federal law can only be either redundant with or adverse to the preferences of any local population.
Or to try to convince a sufficient portion of the rest of the US to adopt a lower floor.
Federal policy can and does (not usually in individual-related rules like minimum wage and salary thresholds, but that’s a choice, not a fundamental barrier) take state and local economic conditions into account.
For instance, when I had a nanny, absent OT laws, optimal hours for both parties were 45/week. OT laws shifted my preference to 40. There is no 5 hour a week job my nanny could get given fixed overhead.
Then again, asking for 30 hours is also like asking for a 33% pay raise. But there are very slow movements towards 4 day/32 hour work weeks, so maybe this will be a thing in due time.
This law has no impact on basic profit incentives. The response is work hour reductions.
What we should have is a % of per capita GDP but that's kind of a radical idea that could never go anywhere.
On the other hand, jobs on the lower end of the spectrum have much less leverage, and are being paid for their time. We, as a society, have a vested interest in companies not working their employees to death, so we discourage companies from overworking their employees, by making them pay extra to employ them more than a full-time job.
The question then becomes: How do we differentiate these two classes of job? If you don't set a firm boundary, employers will pretend even the poor stiff working the nightshift at the gas station Quikmart is in the former category. The main rule for overtime exemption is "are you a professional or in management, or not?", with the 55k floor existing to make sure companies don't get too creative with job title labeling.
The real ceiling on federally-mandated overtime is $107,432, at which point you're making enough that the government trusts you to negotiate advantageous employment terms yourself.
There isn’t.
There is a pay (and other conditions) floor on employers being exempt from the general federal requirement to pay overtime at a specified rate. (State law may impose similar requirements even where federal exemptions apply, and even where both federal and state exemptions apply, employers may offer terms that involve overtime pay.)
That's not why Obama's attempt to raise the cut-off was blocked. The federal law governing this exempts anyone employed in a "bona fide executive, administrative or professsional capacity" and only gives the administrative branch the power to set rules like minimum pay if they're aimed at ensuring exempt employees do actually fall into those categories. The main stated benefit of raising the cut-off, according to the official documents from the Obama administration explaining it, was that it would force employers to pay overtime to people who genuinely were conducting this kind of exempt work. Actually forcing employers to pay overtime to people who weren't carrying out exempt work was described as a more minor secondary benefit. That was a plain and straightforward violation of the letter of the law. Most of the US press just avoided talking about this part of the court rulings at all, presumably for partisan reasons.
The only people "not eligible for overtime" are those that cannot work overtime due to medical (or other similar) reasons.
The law doesn’t forbid overtime for people making over the listed amount, it means that employers aren’t federally mandated to pay overtime (and certain other things) for employees making above a certain base-pay threshold.
Not only is it allowed to pay overtime to people making over the federal threshold, there are states where it is mandatory – just as with minimum wage, there are states that have exemption pay thresholds (and other exemption requirements) that make many federally-exempt jobs not exempt under state law, such that overtime pay is still required.
2. Are you saying there should be no cutoff (graduated or hard) anywhere, so that CEOs with total-compensation in the millions get paid overtime?
3. At a 40 hour week that's about $30 per hour, quadruple the federal minimum wage[A]. If you are salaried and making more than quadruple the minimum wage than you are more likely to have negotiating power than if you are making less than quadruple the minimum wage.
4. There's also a disconnect between the law and actual company behavior; the salary is only one test in the law; companies often give bogus job titles to reclassify non-exempt employees as exempt. This is rather clearly illegal.
A: Yes states can set higher minimum wages. They can also place extra restrictions on who is exempt from overtime laws (and probably should do so in this case) TFA is about federal law, so I'm addressing it as such.
I face prices that are more appropriate for a Tier 1 city, and constraints more appropriate for a Tier 1 city, without the adjustments to wages of a Tier 1 city. This isn't wholly unique to Portland either.
Some of this is policy, some of this is locality, some of it is state quirks, but generally speaking, policy does not reflect reality no matter where you look
Oklahoma City is similarly sized and has a median home price half of Portland.
>Tier 2 cities such as Seattle or Pittsburgh
If Seattle is somehow Tier 2, then Portland is definitely at most Tier 2, if not even lower
Nominal retirement from Uncle Sam is more like $19,200/year.
So, is Dept of Labor going to crush us seniors economy-wise by pulling the rear?