As you might expect the editors of the Wall Street Journal don’t think much of the Obama Administration’s move to expand the number of workers eligible for overtime pay:
The regulation will cover huge swathes of the economy, from retail to finance, technology, food workers and nonprofits. The White House is crowing that the rule could qualify an additional five million workers, while the liberal Economic Policy Institute estimates the number will be closer to 15 million. The President’s timing is no accident, coming as it does after his rift with Big Labor over trade. Automatic overtime is supposed to heal that political wound.
Yet there is no free lunch, and for many of these workers the raises will be an illusion. In the private economy, unlike the government, there are consequences to ordering a higher price for labor—one of which is less labor. Recall ObamaCare, with its redefinition of the 40-hour work week to 30 hours for the purposes of the employer mandate. This has caused many low-margin businesses to cut worker hours below 30 a week.
In the gallery of horrors they catalog in their editorial, they mysteriously do not include the most obvious consequences of the move, two trends already gaining steam, of using illegal workers, mostly immigrants, or temporary workers, many also immigrants brought in on H1-B or L1 visas. Neither of these groups of workers are in a position to complain about overtime, demand overtime pay, or even report their employers for infractions. The employers hold cudgels more powerful than overtime pay—the threat of deportation.
I can only speculate why the WSJ editors omit the two mostly outcomes but it might be because they support them.
As for the Obama Administration, good intentions are not enough to make good policy and some even question their intentions.
