Or give the “cheap labor” capitalists an inch and they’ll find a way to steal a mile.
The Fair Labor Standards Act of 1938 (FLSA) was groundbreaking. Among its provisions were 1) forty hour work week 2) time and half pay over forty hours per week 3) minimum wage 4) prohibited various forms of child labor. One obvious shortcoming was that adjustments to the minimum wage required Congressional action and Presidential approval. That may have been one of the “pragmatic,” bipartisan compromises to set the initial minimum wage close to what employers were already paying “unskilled” labor. Congress could then adjust it upwards as the economy grew and unemployment fell.
It took thirty years for the minimum wage to reach a poverty threshold for a family of four. It has been going in the wrong direction ever since. Now it’s at the poverty threshold for one parent and one child. The significant decline began with the Reagan administration and Democratic politicians straddling between the GOP and New Deal Democrats.
However, before Reagan and the DLC, there was another not so New Dealish Democrat. Carter and the Democratic Congress were only somewhat regressive on the minimum wage, but they supported some deregulation of the New Deal and abandoned acting on another FLSA provision. One that with not much trickery has added money to the pockets of the wealthy instead of the not wealthy.
The FLSA forty hour/week limitation without overtime pay applied to workers. Certain categories of employees that were not considered vulnerable to exploitation, such as professionals, executives, managers, were exempt. Generally salaried employees at higher compensation levels. Unlike modern Democrats, some New Dealers better understood how the plutocrats operated. The test for defining exempt employees wasn’t limited to a job title but also a minimum annual salary. The authority for adjusting that minimum salary over time was delegated to the POTUS.
In 1975, the Ford Administration raised the exempt salary minimum to $13,000. And there it stood until the Bush Administration raised it $23,660.
What was $13,000 worth in 1975? Not so much in SF except in comparison w/minimum wage. (I was there and still remember.) It was approximately three times the minimum wage, but that was also a time when income inequality was much lower. It was like the first rung on the professional ladder. The one after advancing up from a trainee status. “Exempt” employees had some status – no time clocks or routine detailed time sheets. Report “time off” and not “time on” that was assumed to average forty hours/week
Did workers that were classified as “exempt” know that it included an income threshold? Doubtful. I didn’t. And by the time I did any salary administration, all of the exempt employees were earning in excess of an inflation adjusted floor for that classification. But I didn’t work in a “cheap labor” industry.
Exploitation of that flat salary minimum for exempt employees likely began in the early 1980s. Would have been less operational thirty years later when it was raised to $23,660 and has been operational since then. Give the workers a management title and they’ll work more hours and not ask for much much of a raise.
As the rules stand now, an assistant manager at a fast food restaurant who spends 95 percent of his (or her) time cooking fries, running a cash register, sweeping floors, and moving supplies into and out of the freezer can be denied any overtime pay and work 60 or 70 hours a week if his salary is at least $23,660 a year. Because he is exempt, the hourly rate of his salary can fall below the minimum wage; “executives” are excluded from minimum-wage protection, too.
That explains why we see more and more people identified as managers. That view themselves as “middle class.” Yet, they can’t understand why that status doesn’t translate to higher income and job security. This solves what has been a seeming mystery to me. How did so many relatively low income and poor people in this country come to believe they are middle-class and don’t relate to being a “worker.”
Another lesson in “framing” to make stealing from the “have nots” child’s play.
I’m an expert in Seinfeld; mostly the scripts, and memorizing key things that occurred over the course of the show. I frequently see things in real life that is “just like Seinfeld” (hey, probably why it was so popular…). My gf gets annoyed with me when I say “Hey, Seinfeld reference!”
Anyway, this post reminds of of “The Bookstore” episode. George and Elaine are sitting in the coffee shop when Elaine explains how she just had an embarrassing drunken make-out at a work party with a co-worker.
GEORGE: You, uh, didn’t dance again, did you?
ELAINE: (Angered) No, I found a better way to humiliate myself. There was this guy, and we had a few too many..
GEORGE: You went home with him?
ELAINE: Worse. We made out at the table like our plane was going down!
JERRY: (Rubbing it in) Ah, the drunken make-out. An office classic. Did you end up xeroxing anything?
ELAINE: (Gives Jerry a look) Do you know how embarrassing this is to someone in my position?
JERRY: (Confused) What’s your position?
ELAINE: I am an associate.
GEORGE: Hey, me too.
(A waitress, passing their table, speaks up)
WAITRESS: Yeah, me too.
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On the topic at hand, I frankly don’t see why we exempt anyone. Is there economic evidence that says salaried workers who make X should be exempt? Do the exemptions, if properly applied, reduce inequality?
I ask because I’m salaried, and I’m able to work up to 32 hours of overtime a biweek; it increases my production quota, and it’s not time and a half…but it’s extra money (they base it on your salary, divide to find your “hourly” rate).
Guess I should have paid more attention to Seinfeld. Although I did note the proliferation in the use of “associate” and administrative assistant” in the late eighties and nineties. Job title status. But didn’t consider that that would translate into being exempt employees that worked extra hours without compensation.
Your employer is applying the exempt classification differently from what other employers are doing. You are getting paid at your standard rate for overtime of your own choosing.
How it’s being done by most employers is simply piling on work that is difficult to complete in eight hours — but on average adds only an hour or so a day. No formal tracking and recording of all the hours the employee works outside of the normal workday/business hours. No extra pay at either the standard rate of 1.5 overtime rate.
In many jobs it’s not practical or feasible to translate extra hours into extra productivity. That’s where good managers come in. They have a rough sense of who is handling how much work and distribute the higher annual raises and bonuses to those who give more as well as promoting the better workers faster.
I’m guessing that the exempt salaried worker classification was originally in response to employers that required more flexibility for professional and managerial employees. Accounting firms require substantially more hours during certain periods in the year, but substantially less at other times. For example, business trips often require twelve to fourteen hour days — but some of that time is spent on golf courses, at dinner meetings, etc. Is that work? For some — good god yes. For others, it’s what charges their batteries. Professional class employees liked it because it’s status; they’re superior to the time-clock and/or unionized worker bees. They were, or were aspiring, upper middle class professionals.
Right, I know that’s how it’s typically done. It’s why a friend of mine quit his job at Amazon. He made $90k a year — his first job out of college — with a $20k sign-on bonus assuming he stayed the first year. He quit in 6 months. Aside from the fact that he hated the work and felt like what he was doing was pointless, he was on call ALL THE TIME, frequently on the weekend. And not getting paid for the extra time put in, which started to frequently add up to 60 hour weeks. He was working on a new rollout program of Amazon’s, “Amazon Fresh”.
He’s now at some sort of computer start up, making next to nothing (unless it takes off, of course), but he’s much happier.
If your friend’s experience at Amazon is representative of the management skill and work flow designs there, it suggests very poor operations. That has a way of catching up with any growth business and how they often seem to collapse so quickly.