Posts tagged as:

minimum wage

  • After Harris v. Quinn, states and unions begin dropping mandatory dues collection for home health carers [Michigan Capitol Confidential, Fox; my two cents at Free State Notes on Maryland's heel-dragging]
  • Macy’s in suburban Boston is opening target for NLRB bid to install gerrymandered “micro-unions” [The Hill, earlier here, etc.]
  • Federal contractors to fork over pay demographics, the better to be sued [Department of Labor]
  • Speaking of the barrage of executive orders coming out of the White House, it’s beyond silly to pretend that all the costly new employment mandates will promote “efficiency and cost savings” [Coyote]
  • “Gay Christian conservative employee sues gay bar for sexual, religious harassment” [Volokh]
  • “House Hearing Highlights Problems in the Fair Labor Standards Act” [Alex Bolt]
  • “Forcing Kids to Do Chores Not a Federal Crime” [Courthouse News, Volokh]

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No, Henry Ford’s pioneering high-wage policy wasn’t intended to push up demand for the cars he made [Marc Hodak]

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New York Times columnist Tim Egan takes a swing at Wal-Mart, and Wal-Mart swings back.

P.S. Now expanded into a longer post at Cato — don’t miss the (very good!) views of Obama administration chief economist Jason Furman. (& Scott Shackford, Reason)

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  • “House Report criticizes EEOC for litigation before conciliation” [HRM America, attention-stirring Merrily Archer survey and more]
  • Do you gripe about upward spiral of executive salaries? Do you want to force employers into fuller pay disclosure? Be aware of the tension between those two positions [Gary Shapiro of CEI, Daily Caller]
  • Because the union is all about respect: Laborers/LIUNA brings giant inflatable rat to St. Louis funeral home [KTVI]
  • Reality-based: “during five of last six federal minimum wage increases, nation fell into recession” [Thomas Firey, Cato via @scottlincicome] Minimum wage and automation [Ira Stoll, earlier]
  • Minnesota legislature expands employer regulation under apple-pie heading of “Women’s Economic Security Act” [Courtney Ward-Reichard guest-posting at Daniel Schwartz's] How well are state-mandated employee leaves working in California? [Coyote]
  • “EEOC continues fight against severance agreements, while employers fight back” [Jon Hyman, earlier on CVS case]
  • OSHA targets auto suppliers in South for enforcement crackdown, rationale to be supplied later [Sean Higgins, DC Examiner via Instapundit ("Well, he can't come right out and say it's about hurting non-union shops")]

They’re being helped along by tech advances (also — shhhh! — by minimum wage hikes) [Ira Stoll, Future of Capitalism; Bloomberg BusinessWeek]

From a casual glance at the account by the Pew Foundation’s StateLine in USA Today, you might think President Obama’s proposal to require overtime for home health carers (covered earlier here and here) was not so very costly or burdensome. “States wary home care worker rules could cost millions,” reads the headline. Paragraph 6 seems to confirm that the stakes are just in the low millions, which would be minor as health care policy changes go: “The U.S. Department of Labor estimates the rule will cost $6.8 million a year over a 10-year period, with private businesses and state Medicaid programs picking up the tab.”

On the other hand, you might find the above-cited number to be suspiciously low, what with advocates of the rule promoting it as a major boost to the take-home pay of nearly 2 million home care workers ($6.8 million works out to about three and a half bucks per year for each such worker). Thirteen paragraphs later, the tune has changed: “California, which already applies its $8 minimum wage to home care workers, but not overtime, estimates the new overtime requirements will cost the state more than $600 million in 2015-2016.” That is to say, just one state (California) gives an annual cost estimate for the rule that’s about 100 times the national cost estimate recited earlier in the piece. What gives?

This September account from Littler Mendelson, while not itself as clear as one might like, sheds some light on the discrepancy:

The DOL estimates the new regulations will affect approximately 1.9 million home care workers in the United States. The DOL contends the primary effect is “the transfer of income from home care agencies (and payers because a portion of costs will likely be passed through via price increases) to direct care workers, due to more workers being protected under the FLSA.” While described by the DOL as a “transfer of income,” in actuality the DOL’s numbers are the estimated annual cost to the home care agencies as a result of the new regulations. With respect to annual costs incurred for minimum wages, travel wages and overtime, the DOL estimates home care agencies will pay an average of $210.2 million the first year of implementation, increasing each year to an estimated $468.3 million on average by year 10. For annual regulatory familiarization, hiring costs (based on overtime hours needed to be covered by newly hired employees), and deadweight loss, the DOL projects home care agencies will incur $20.7 million on average in the first year, decreasing to an average of $5.1 million in year 10.

However, a March 2012 Navigant Economics Study: Estimating the Economic Impact of Repealing the FLSA Companion Care Exemption suggests a much higher cost to home care agencies. Although Navigant studied the economic analysis published by the DOL in the 2011 Notice of Proposed Rulemaking (NPRM), the study continues to suggest that the DOL has underestimated the compliance costs of the new regulations. According to Navigant, the DOL has: disregarded the impact on live-in workers, a group the study contends are disproportionately more likely to incur extended periods of pay at the overtime wage under the new regulations; underestimated the cost of paying home care workers for travel time; and underestimated the increased cost to the home care agencies for compliance with the minimum wage protection afforded by the FLSA. Ultimately, the study concludes the annual cost to home care agencies is significantly higher than the DOL has predicted.

It’s almost as if DoL has been doing its part to promote the president’s proposal by systematically lowballing, complicating and hiding its costs. The USA Today story has this relevant passage about some other costs that may be less readily monetized:

Joseph Bensmihen, president of United Elder Care Services, Inc., a caregiver referral service in Boca Raton, Fla., said the most likely alternative for most of his clients, besides moving into a facility [emphasis added], will be to rotate caregivers to ensure that none works more than 40 hours a week. “This means that one of the most cherished benefits of home care among the elderly, disabled, and infirm, namely continuity of care, will be lost.”

It won’t take many hapless elderly persons moving from home and family care into nursing home facilities to exceed that absurd $6.8 million cost underestimate all by itself.

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Unpaid internships are standard practice at the White House, on Capitol Hill, and in political campaigns. Should they be banned for private-sector employers? I answer “no” in a new U.S. News “Debate Club” also featuring a contribution by Dan Rothschild of R Street Institute as well as contributions by three advocates of a ban. Excerpt of mine:

With eyes wide open, students with many options have long sought out voluntary unpaid internships because they’re an arrangement that can rationally benefit both sides.

In an Auburn University working paper last month (via), four economists reported on a study that found internship experience was associated with a 14 percent increase in the rate at which prospective employers request interviews of job seekers. As a predictor of the rate of callbacks, an internship on the resume actually worked much better than a business degree itself.

Yet class-action lawyers and labor activists now attack internships as — in the trendy, elastic new term — “wage theft.” These same lawyers and activists go to court demanding millions of dollars retrospectively over arrangements both sides understood perfectly well at the time to be unpaid — and think shakedowns like these should *not* be called “theft.” …

In modern America, it’s never more than a short jump from “this set-up isn’t for everyone” to “let’s ban it.”

I go on to discuss the sclerosis of the European job market, especially when it comes to youth employment, and observe that the “campaign against internships is part of a wider campaign against low-pay work options in general — call it a campaign to get rid of any stepping stones in the stream that aren’t sturdy enough to support a whole family.” And I note the curious contrast with higher education pointed out by my colleague Andrew Coulson: “Paying to Learn Nothing = Legal. Paying Nothing to Learn = Illegal.” Earlier coverage here. And adapted with additional material into a longer Cato version here.

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  • “Will ‘Microaggressions’ Make Their Way Into Employment Discrimination Cases? Have They Already?” [Daniel Schwartz]
  • More phone and pen: Obama executive orders will forbid federal contractors from retaliating against employees who discuss pay with colleagues, direct DoL to require compensation data from contractors based on sex, race [AP, White House]
  • List of best and worst states for employee lawsuits (from employer’s perspective) includes some surprises, although California’s status as worst isn’t one of them [Insurance Journal] $20K to fend off suit “for harassment and intimidation by her manager — when the manager was her sister” [Coyote; sequel to "Ventura County blues," on which earlier here and here]
  • Wage/hour activists step up pressure for federal enforcement, more detailed pay stubs to combat off-clock work, alleged misclassification [ABA Journal]
  • “A National Minimum Wage Is a Bad Fit for Low-Cost Communities” [Andrew Biggs and Mark Perry, The American] “Immigration, Eugenics, and the Minimum Wage” [Matt Zwolinski, Bleeding Heart Libertarians]
  • Court decision may amount to end run enactment of something like ENDA minus the legislative compromises and exceptions [Tamara Tabo, and thanks for link to "good reasons" for opposition; a second view from Jon Hyman]
  • “DOL (Department of Labor) Persuader Rule Undermines Attorney-Client Privilege, Attorney Generals Say” [Howard Bloom and Philip Rosen (Jackson Lewis), National Law Review, earlier]

Maryland roundup

by Walter Olson on April 6, 2014

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  • Nomination of David Weil as Labor Department wage/hour chief could be flashpoint in overtime furor [Terence Smith, Hill] Another reaction to President’s scheme [Don Boudreaux, Cafe Hayek, earlier here and here]
  • Oregon: longshoreman’s union says NLRB charges of blinding, threatened rape meant “to distract” [Oregonian]
  • Who thinks hiking the minimum wage would kill jobs? Company chief financial officers, to name one group [Steve Hanke, Cato]
  • Tourists’ casual naivete about union politics at NYC hotel made for tension, hilarity [How May We Hate You via @tedfrank]
  • Just for fun: Wichita business’s creative responses to union’s “Shame On…” signs reach Round 2 [Volokh on first round, Subaru of Wichita on second round]
  • Workers’ comp claims at government agencies in Maryland can be odd [Baltimore Sun via Jeff Quinton]
  • Are unions losing their grip on the California Democratic Party? [Dan Walters]

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Unemployment among British 16- and 17-year-olds suddenly began to surge after 2005. “It’s ‘difficult to explain’ … right. A total mystery. I can’t think What might have caused it.” [BritMouse via Scott Sumner.EconLog]

More: Don Boudreaux. “A poor way to reduce poverty” [Joseph Sabia, Cato Tax and Budget Bulletin, PDF] And don’t hold back, SmarterTimes, tell us what you think re: New York Times hand-wringing on the subject.

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Heeding demands from constituency groups, President Obama orders a $10.10 hourly wage even for the most severely disabled workers under the scope of his federal-contractor order [USA Today] Writes Mike Bennett on Twitter: “As a parent of a disabled son, I would much rather he have a real job at five dollars an hour then a theoretical job at $10.10.”

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Study here and coverage here, here, and here. The actual number in CBO’s view could be as low as near-zero or as high as a million jobs lost. “Spin it as you wish, we should not have a major party promoting, as a centerpiece initiative and for perceived electoral gain, a law that might put half a million vulnerable people out of work, and that during a slow labor market.” [Tyler Cowen] And imagine indexing the $10.10 number to ensure that its damage goes on indefinitely. More: Ramesh Ponnuru, Philip Klein, Emily Ekins, Trey Kovacs (role of unions’ self-interest). Earlier on minimum wage.

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Maryland roundup

by Walter Olson on February 8, 2014

  • Hearing set for February 26 on bill to ban knives and other weapons from private school parking lots and other property [Maryland Legislative Watch]
  • Bill would join Ohio in banning hidden compartments in cars, but one legislative sponsor withdraws it following public outcry [MLW]
  • Minimum wage a poor way to support working families [Todd Eberly]
  • Italian-based gunmaker Beretta: “Maryland disrespects us and gun owners, so we expand in Tennessee” [Ugo Gussalli Beretta, Washington Times]
  • Would a per-bird environmental tax, as proposed by two Montgomery County lawmakers, drive chicken farming out of the state? [DelmarvaNow, followup (governor pledges veto)]
  • “The Parallel Failures of the Oregon and Maryland Health Exchanges” [Peter Suderman, Reason]
  • State has resisted general tide toward dramshop (alcohol server) liability for misdeeds of drunken patrons; bill in Annapolis would change that [MLW, earlier]

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  • Minimum wage laws are sentimental legislation with all-too-real effects [Jeffrey Dorfman] “Our Business’s Response to California $2 Minimum Wage Increase” [Coyote, with more on a union angle on minimum wage laws] Some experience from Europe [Steve Hanke, more, Cato overview of minimum wage debate]
  • Connecticut fires state labor department employee who gamed system to get benefits for friend, then reinstates after grievance [Raising Hale] Oldie but goodie: union contract in Bay City, Mich. gave teachers five strikes to show up work drunk before being fired [Mackinac Center two years back]
  • Background of Harris v. Quinn, now before SCOTUS: Blagojevich and Quinn favors for SEIU [George Leef, Forbes, earlier here, etc.]
  • If you decline to hire applicants who’ve sued previous employers, you may face liability over that [Jon Hyman]
  • More on class action seeking pay for volunteer Yelp reviewers [LNL, earlier]
  • “Intriguingly, returns to skills are systematically lower in countries with higher union density, stricter employment protection, and larger public-sector shares.” [Eric Hanushek et al, NBER via Cowen]
  • “L.A. Sheriff’s Department Admits Hiring 80 Problem Officers; May Not Be Able to Fire Them” [Paul Detrick, Reason]