5 ms·

The proposal isn't a paycut right? As written employees keep the same pay but work 32 hours instead of 40.

pc86 5y ago
One, there are a lot of businesses that operate on margins well under 20%. Some percentage of these would absolutely go out of business if you somehow mandated 80% of the current hours for 100% of the current pay. Now you can argue they should go out of business anyway, and maybe you're right, but it's still the government passing a law to intentionally put a lot of people out of business and make a lot of people lose their jobs. Two, FTA "the proposed bill would require these employers to compensate employees who work in excess of 32 hours per week at 1 ½ times the employee’s regular rate of pay" - it's unclear to me how this impacts exempt vs. non-exempt workers. If you're salaried in California and you work 50 hours a week it's not like you get paid any more. Those are 10 hours of unpaid overtime. This doesn't seem to change that concept. If they're only talking about hourly workers, then it's a pay cut no matter what. In the "Disadvantages" section of the article it further implies that these changes would mostly impact hourly/non-exempt workers. Three, why the differentiation between <=500 and >500 workers? If I'm an hourly worker someplace with ~490ish employees who works 40h/wk I'm going to have to worry about my hours being cut because of hiring I have nothing to do with. If I'm consistently getting overtime for a larger employer at ~40 hours a week, I'm going to receive a pay cut if they downsize and that work is no longer considered overtime. Four, and perhaps most importantly, this is never getting signed into law. It's a publicity/donor stunt by some politicians and nothing more.
- thomascgalvin 5y ago
  > One, there are a lot of businesses that operate on margins well under 20%. > > Three, why the differentiation between <=500 and >500 workers? I suspect that the third point is an attempt to address the first. A company with five hundred employees is (in theory) better able to absorb this cost than a mom-and-pop with ten people on staff. The exact number of five hundred is probably arbitrary, though.
  - robbedpeter 5y ago
    It favors megacorporations, who can afford to eat any short term losses as new unfavorable conditions drive smaller businesses under, eliminating competition, and then prices adjust upwards when the local market has been sufficiently captured. This is how Wal-Mart and Starbucks and their ilk take over. It's impossible to compete against multi-billion dollar companies regardless of service, quality, or loyalty because small businesses deal with local margins and megacorps have global reserves. Walmart doesn't need to compete with mom and pop, it simply needs to destroy them. In that context, if we see local economies as something to be preserved, better regulations are needed. There might not be a legitimate case for that, since megacorps being massive efficiencies to bear. Deliberately reducing efficiency to placate small business owners might feel justified, but to the consumer, things are pretty good these days aside from shortages and inflation.
- michaelmrose 5y ago
  You are assuming that wages represent 100% of costs when its more apt to be 30%. You are assuming that all employees are full time when in fact the minority often are. Lastly you are assuming that people will be paid 20% more for working 20% less. They would be making 25% more 5/4 not 4/5. For example 100 for working 5 hours is 20 100 for working 4 hours is 25. Those errors corrected lets blow through a hypothetical. A shop that employs 40% of its folks full time will have to hire a ~10% (25% not 20%) bigger workforce in order to provide an identical number of labor hours. However labor costs while they are substantial aren't 100% of costs. It would be more normal for employee labor to be closer to 30%. This means costs ought to increase more like 3% not 20%. Businesses can take the additional profits from rising prices in fact only partially attributable to rising prices of inputs and probably come out even. It ought to be noted that its also possible that many firms can't all hire 10% more labor making paying the overtime rate for some of its people the only feasible alternative to serving business. Paying 8 hours of overtime for a given employee is like paying for an extra 4 hours of pay or once again 10% of effected employees minus the additional cost of acquisition and management. This may end up being the desirable option.
  - pc86 5y ago
    By focusing on the numbers specifically you're missing my entire point, which is that there are always businesses on the edge. This will put some businesses out, causing those employees to lose jobs and those owners to either try to open another business (expensive) or find work elsewhere (and most of the time if you own a business and it goes under you're not eligible for unemployment). Whether that's okay, or even good, is a separate discussion, but I don't see anyone arguing that not a single business will go under by having their payroll costs go up to cover the same number of hours every week. > Businesses can take the additional profits from rising prices If a business is increasing its prices, it's much more likely that it's doing so because its own COGS and other expenses are increasingly similarly.
    - michaelmrose 5y ago
      People have a need say dinner. Many people will compete to provide dinner and those who are only marginally successful will fall off the game board under absolutely any set of ground rules to be replaced by others who are either better suited, better capitalized, or luckier. Any change in the ground rules that makes life more expensive be it implementing health inspects, fire codes, minimum wage, over time, child labor will boot someone from barely functional to defunct to be replaced by someone smarter and better. Such failures are disruptive but unemployment shields the employees to some degree from mischance and ultimately they don't long term care if bob's eatery goes out of business. Instead they care if there is someone they can cook serve or deliver dinner for. On average someone will be interested in serving that need and statistically the survivor will be a better business than bobs. It's unfortunate if Bob goes under but statistically Bob as the owner of a business with 500+ employees he is well inside of the 1% and his financial well being is the last thing we ought to optimize for.
ac29 5y ago
That doesnt follow - if you get paid by the hour, a mandatory reduction in hours is a mandatory reduction in pay.
- michaelmrose 5y ago
  It's more complicated than that. Cost of labor is driven by what management is willing to offer and what employees can afford to accept. If a 32 hour effective cap leads to employees demanding 20 and employers offering 15 they can keep on offering until their firm goes out of business if they like.

pc86 5y ago

One, there are a lot of businesses that operate on margins well under 20%. Some percentage of these would absolutely go out of business if you somehow mandated 80% of the current hours for 100% of the current pay. Now you can argue they should go out of business anyway, and maybe you're right, but it's still the government passing a law to intentionally put a lot of people out of business and make a lot of people lose their jobs. Two, FTA "the proposed bill would require these employers to compensate employees who work in excess of 32 hours per week at 1 ½ times the employee’s regular rate of pay" - it's unclear to me how this impacts exempt vs. non-exempt workers. If you're salaried in California and you work 50 hours a week it's not like you get paid any more. Those are 10 hours of unpaid overtime. This doesn't seem to change that concept. If they're only talking about hourly workers, then it's a pay cut no matter what. In the "Disadvantages" section of the article it further implies that these changes would mostly impact hourly/non-exempt workers. Three, why the differentiation between <=500 and >500 workers? If I'm an hourly worker someplace with ~490ish employees who works 40h/wk I'm going to have to worry about my hours being cut because of hiring I have nothing to do with. If I'm consistently getting overtime for a larger employer at ~40 hours a week, I'm going to receive a pay cut if they downsize and that work is no longer considered overtime. Four, and perhaps most importantly, this is never getting signed into law. It's a publicity/donor stunt by some politicians and nothing more.

thomascgalvin 5y ago
> One, there are a lot of businesses that operate on margins well under 20%. > > Three, why the differentiation between <=500 and >500 workers? I suspect that the third point is an attempt to address the first. A company with five hundred employees is (in theory) better able to absorb this cost than a mom-and-pop with ten people on staff. The exact number of five hundred is probably arbitrary, though.
- robbedpeter 5y ago
  It favors megacorporations, who can afford to eat any short term losses as new unfavorable conditions drive smaller businesses under, eliminating competition, and then prices adjust upwards when the local market has been sufficiently captured. This is how Wal-Mart and Starbucks and their ilk take over. It's impossible to compete against multi-billion dollar companies regardless of service, quality, or loyalty because small businesses deal with local margins and megacorps have global reserves. Walmart doesn't need to compete with mom and pop, it simply needs to destroy them. In that context, if we see local economies as something to be preserved, better regulations are needed. There might not be a legitimate case for that, since megacorps being massive efficiencies to bear. Deliberately reducing efficiency to placate small business owners might feel justified, but to the consumer, things are pretty good these days aside from shortages and inflation.
michaelmrose 5y ago
You are assuming that wages represent 100% of costs when its more apt to be 30%. You are assuming that all employees are full time when in fact the minority often are. Lastly you are assuming that people will be paid 20% more for working 20% less. They would be making 25% more 5/4 not 4/5. For example 100 for working 5 hours is 20 100 for working 4 hours is 25. Those errors corrected lets blow through a hypothetical. A shop that employs 40% of its folks full time will have to hire a ~10% (25% not 20%) bigger workforce in order to provide an identical number of labor hours. However labor costs while they are substantial aren't 100% of costs. It would be more normal for employee labor to be closer to 30%. This means costs ought to increase more like 3% not 20%. Businesses can take the additional profits from rising prices in fact only partially attributable to rising prices of inputs and probably come out even. It ought to be noted that its also possible that many firms can't all hire 10% more labor making paying the overtime rate for some of its people the only feasible alternative to serving business. Paying 8 hours of overtime for a given employee is like paying for an extra 4 hours of pay or once again 10% of effected employees minus the additional cost of acquisition and management. This may end up being the desirable option.
- pc86 5y ago
  By focusing on the numbers specifically you're missing my entire point, which is that there are always businesses on the edge. This will put some businesses out, causing those employees to lose jobs and those owners to either try to open another business (expensive) or find work elsewhere (and most of the time if you own a business and it goes under you're not eligible for unemployment). Whether that's okay, or even good, is a separate discussion, but I don't see anyone arguing that not a single business will go under by having their payroll costs go up to cover the same number of hours every week. > Businesses can take the additional profits from rising prices If a business is increasing its prices, it's much more likely that it's doing so because its own COGS and other expenses are increasingly similarly.
  - michaelmrose 5y ago
    People have a need say dinner. Many people will compete to provide dinner and those who are only marginally successful will fall off the game board under absolutely any set of ground rules to be replaced by others who are either better suited, better capitalized, or luckier. Any change in the ground rules that makes life more expensive be it implementing health inspects, fire codes, minimum wage, over time, child labor will boot someone from barely functional to defunct to be replaced by someone smarter and better. Such failures are disruptive but unemployment shields the employees to some degree from mischance and ultimately they don't long term care if bob's eatery goes out of business. Instead they care if there is someone they can cook serve or deliver dinner for. On average someone will be interested in serving that need and statistically the survivor will be a better business than bobs. It's unfortunate if Bob goes under but statistically Bob as the owner of a business with 500+ employees he is well inside of the 1% and his financial well being is the last thing we ought to optimize for.

ac29 5y ago

That doesnt follow - if you get paid by the hour, a mandatory reduction in hours is a mandatory reduction in pay.

michaelmrose 5y ago
It's more complicated than that. Cost of labor is driven by what management is willing to offer and what employees can afford to accept. If a 32 hour effective cap leads to employees demanding 20 and employers offering 15 they can keep on offering until their firm goes out of business if they like.