Checking for yourself

Prompted by an article by Greg Palast, I wound up scanning through 38 pages of the March 2003 Federal Register.

In celebration of the working person's holiday, Secretary of Labor Elaine Chao has announced the Bush Administration's plan to end the 60-year-old law which requires employers to pay time-and-a-half for overtime. ...

According to the Register, where the Bush Administration likes to place its little gifts to major campaign donors, 2.7 million workers will lose their overtime pay for a "benefit" of $1.53 billion. I put "benefit" in quotes because, in the official cost-benefit analysis issued by Bush's Labor Department, the amount employers will now be able to slice out of workers' pockets is tallied on the plus side of the rules change.

President Bush announced in his convention acceptance speech this week that he was changing overtime rules to give workers "comp time" off instead of pay. He forgot to mention that a couple of days before, on August 23, his Labor Department had already put in half the plan - eliminating overtime pay for millions - while failing to put into the regs one word about comp time. In the pre-September 11 days, we used to call that, "lying."

In going over the proposed regulations, I don't see any estimate of how many workers will lose unemployment coverage, so I assume that was taken from another source. Other estimates have run as high as 6 million.

And it seems Greg made a mistake in that the figure of $1.53 billion refers to the upper end of the upper bound cost estimates to employers. (There is a range of estimated "lower bound" costs and another, higher one of "upper bound" costs based on different assumptions, which is why you can have a number at "the upper end of the upper bound.") However, the chart on pages 15,578-15,579 shows a net benefit to employers - benefits minus costs - of between $240 million and $400 million. While there is considerable variance by industry, on the whole, business benefits. (Interestingly, one of the real gainers is "oil & gas extraction," with a net benefit of between $2.2 billion and $4.3 billion.)

Now I should say, according to Chao's press office, the changes will actually extend overtime benefits to 1.3 million burger flippin' managers. How does that square with the billion dollar "benefit" to business owners? Simple: The Chao hounds at the Labor Department suggest that employers CUT WAGES so that, added to the new "overtime" pay, the employees won't actually take home a dime more.

I can hear the moaners and bleeding hearts saying this sounds like the Labor Department is telling Big Business how to evade the law. Yep, that's what the Department is doing. Right there on page 15,576 of the Federal Register it says,

"Affected employers would have four choices concerning potential payroll costs: … (4) converting salaried employees' basis of pay to an hourly rate that result in virtually no changes to the total compensation paid those workers."

It does indeed say exactly that, in fact it adds that

[n]othing in the FSLA would prohibit an employer affected by the proposed rule, or under the current rule, from implementing the fourth choice above, which results in virtually no (or only a minimal) increase in labor costs.

It even includes a helpful example.

Of course, I mentioned this back on January 8 so it's not exactly a new discovery, but it certainly bears repeating. And repeating....