Issue of the week: Judge halts new overtime rules
Business owners around the country are cheering this week, said Michelle Rindels in the Associated Press. New overtime rules were set to go into effect on Dec. 1 that would have made more than 4 million workers “newly eligible for time-and-a-half pay” when they worked more than 40 hours a week. Employers would have been required to pay overtime to salaried workers making less than $47,500 a year, “a dramatic jump from the old threshold” of less than $23,660. But those changes are now on hold after a federal judge in Texas ruled the Labor Department had overstepped its authority by raising the salary limit so significantly. Employers are off the hook for the extra pay for now, but they have a fresh dilemma on their hands, said Katie Johnston in The Boston Globe. Many businesses have spent the past few months preparing for the new rules—some by bumping workers’ pay up to the new threshold to avoid paying them overtime or by converting salaried employees to hourly wages. Should they “roll back changes that have already been put in place?”
Save your concern for the workers who were expecting a raise this week, said Chris Tomlinson in the Houston Chronicle. It doesn’t seem right that low-level retail and restaurant managers who make $25,000 a year but work 60 hours a week can’t log overtime pay. When the overtime rules were last revised, in the 1970s, “65 percent of salaried workers were entitled to overtime. Now, only 11 percent are.” Politicians find it “very easy to demonize U.S. companies that open foreign factories and pay low wages overseas.” But when it comes to making sure that U.S. jobs pay a living wage? “Not so much.”
Not all workers will be sorry to see the new rules go, said Virginia Postrel in Bloomberg.com. The Obama administration thought it could give workers “more money or shorter hours by decree,” but the reality is that there’s no one-size-fits-all job arrangement. Some workers, like those at nonprofits, put in long hours for relatively small salaries because they believe in their work or because they get flexibility. “Putting such employees on a time clock is not just a burden. It can seem like an insult.” The overtime rules also assume “that employers have a big pot of money somewhere that they’re keeping for themselves instead of paying their hardworking staffs.” For businesses in competitive industries, like retailers and restaurants, that’s just not true.
Another casualty: President Obama’s effort to build a legacy through executive power, said Michael Memoli in the Los Angeles Times. When the overtime rules were finalized in May, they were hailed “as the most consequential action the Obama administration could take for middle-class workers without congressional involvement.” But Obama gambled that his successor would preserve his executive actions, only to see Donald Trump elected. Even if the Labor Department successfully appeals, Obama’s overtime rule, as well as his executive actions on climate, immigration, and foreign policy, looks more or less doomed.
Myths about job hopping after 50
The Wall Street Journal
Believe it or not, it’s never been better to be an older worker looking for a job, said Anne Tergesen. Conventional wisdom holds that the new economy is an inhospitable place for workers in their 50s or 60s, full of part-time gigs flipping burgers or worse. The numbers, however, show “that the nightmare scenario simply isn’t true.” The 55-and-older demographic is actually the “only age group with a rising labor-force participation rate.” Not only that, but more than 60 percent of workers age 65 or older have full-time positions, up from 44 percent in 1995. These older workers are increasingly working in well-paid, highly skilled jobs in the professional services industry. They are helped by the overall shift from a manufacturing to a service economy, which has created more jobs “in which cognitive skills matter more than physical ability.” The stereotype of older workers as “dead wood” is also drifting away. Study after study shows “little to no relationship between age and productivity.” One recent look at workers at a large German insurance firm found that productivity actually rises with age when it comes to more demanding tasks that require deep expertise. So, the next time you hear that the only jobs available to older folks are as Walmart greeters or Uber drivers, just remember, “a lot of people have been misinformed.”
Why iPhones won’t be made in the U.S.
“Few people took Donald Trump seriously” when he said in March that he’d get Apple to start making iPhones in the U.S., said Adam Minter. And even though his election has apparently spurred Apple to study whether iPhone production can indeed be brought back from China, Trump and his supporters shouldn’t get their hopes up. Not for nothing has China become “the industrial hub” of Apple’s sprawling empire. The country boasts a huge and nimble manufacturing workforce that simply doesn’t exist in the U.S. The main iPhone facility in Zhengzhou employs 110,000 workers; Apple supplier Foxconn employs another 240,000 in Shenzhen alone. Last year, when Apple wanted to ramp up production in advance of the iPhone 6s release, its contractors rapidly added 100,000 more workers. “A mass mobilization on that scale, and at that speed, likely hasn’t been attempted [in the U.S.] since World War II.” What’s more, most of the parts that make up an iPhone are made “a short distance from where the devices are assembled,” which speeds production and lowers logistics costs. It would take decades to build a similar industrial ecosystem in the U.S. Building its products in China helps Apple support 2 million domestic American jobs and allows U.S. consumers to buy incredible gadgets at a reasonable price. A U.S.-built iPhone isn’t going to happen. “More to the point, Americans shouldn’t want it to.”