It sounds so simple

So why not just order a raise?

Tuesday, March 18, 2014

THOSE LUCKY employees of Little Rock’s school district are in line to get raises, slow times or no slow times. The school board voted last week to give its employees a 3-percent across-the-board raise. And that’s on top of those 3-percent step increases that happen automatically every year for most of the district’s employees. Not only all that, but the raise is retroactive to July 1st of last year. A nice bonus check could be in the mail any day now.

Must be nice. Folks in the private sector, where raises are determined by the state of the economy, profit margins and, who knows, maybe even the worker’s merits, have to wonder why they didn’t choose a career in government.

But have no fear. Uncle Sucker has a long reach. And he can tell even private businesses how to pay their employees.

Last week the president announced that his administration was going to propose new rules for overtime pay. He told his labor secretary to start changing the rules about which salaried workers can earn time-and-a-half (or more) and when they can earn it.

As things stand now, and have for years, businesses needn’t pay overtime to most salaried workers if those workers make at least $455 a week, or about $24,000 a year. The president and his people want that threshold raised. Specifics, as always, will come later. After the controversy has died down.

Why the controversy? Because businessmen say such a change won’t just hurt them, but their workers. Since businesses are sure to cut back on their payroll if they have to pay more employees overtime. And they could lower the salaries of those workers they retain in order to make up for the higher overtime they’ve now got to pay the others.

For an example to beware when it comes to the unintended consequences of government orders to business, consider Obamacare. The administration blew off February’s low job figures as the price the economy pays when snow blankets much of the country. But what about the costs that employers can see on the horizon as Obamacare comes online? According to the Congressional Budget Office, the not-so-Affordable Care Act could cost the country the equivalent of millions of jobs in the coming years.

The president also used his executive power last month to raise the minimum wage for federal contract workers from $7.25 to $10.10 an hour. And he wants Congress to pass a higher minimum wage for everybody else. As if employers would just shrug their shoulders, shuffle their feet, and say Yassah: “Guess we’ll just see smaller profits next year.” Right.

More likely those businesses would try to make up any losses by reducing expenses-like the number of people they employ. They could also put off hiring new workers to make up for the higher wages they’ll have to pay the people they keep on the payroll.

ROSS EISENBREY is a vice president and economist at a properly leftish outfit called the Economic Policy Institute. Not surprisingly, he’s all for the new proposed overtime rules. Why? Because a lift in that $24,000 threshold would “move more money from employers into employee pockets. That will be good for the economy.”

In what world? In this world, it’s more likely that an employer would factor in overtime and pay newer hires a lower salary to make up for the government-dictated losses.

“Let’s see. Last year that position rolled up 50 hours of overtime. So we’ll hire the next guy to fill it at the previous salary-minus what we paid in overtime last year. Just to balance things out . . .”

And if, for some reason, the employee doesn’t need to put in that much overtime next year? He’ll just make less money.

Wonderful government policy. If your aim is to hurt workers.

All of which brings to mind a countrified little ditty the one and only Randy Newman used to sing-“Mr. President (Have Pity on the Working Man).”

We’ve taken all you’ve given,

It’s gettin’ hard to make a livin’,

Mr. President, have pity on the workin’ man.

We’re not asking you to love us,

You may place yo-sef high above us,

Mr. President, have pity on the workin’ man . . .

Editorial, Pages 14 on 03/18/2014