posted 03-31-2003 07:58 PM            

Bush’s Brave New Wage World

In the week after the second U.S. war began in Iraq, President Bush unveiled his new corporate agenda for the American working class. The corporate press reported in a limited way that the Bush administration, by federal wage-and-hour regulations, now promotes something new, a $22,100 annual worker salary.

Associated Press stated on March 27, 2003, in an article posted by Leigh Strope: “Almost 110 million workers are covered by the law, about 80 percent of the work force … Under the [federal] proposal, any [American] worker earning less than $22,100 a year automatically would be entitled to overtime pay … Companies also could decide to boost salaries above the cap [$22,100] to avoid paying overtime.”

President Bush’s proposal looks innocent enough on its face. But the practical effect would profoundly alter the economic relationship of American workers and their employers. The President’s regulations would effectively eliminate “time-and-a-half” overtime pay as a point of federal law. The regulations would encourage corporations to combine part-time hourly staff with full-time salaried staff at the $22,100+ salary level. People on the salary would be required to work as many hours over 40 per week as the company wants, for no extra pay.

The 40-hour workweek would become a thing of the past for people being paid at least $22,100. In this way, the President’s agenda would expand the American worker’s “full-time” workweek to 60, 80, 90 or even more hours.

Even before the President’s 2003 war, some Americans already worked 80 and 90 hours a week, or even more, to pay their family’s bills. Now it becomes the norm, if the President’s corporate agenda prevails.

On the new federally set $22,100 salary where overtime no longer matters, the effective hourly rate of pay for a 90-hour workweek is $4.91.

Before the changes proposed by President Bush’s regulations, a “minimum wage” worker could count on getting $5.15 for the first 40 hours. This paid an effective base salary ($5.15 x 40 hours x 50 weeks) of $10,300 per year for the “full-time” (then, 40-hour-a-week) minimum-wage worker. In the wage-and-hour world before Bush, if the company wanted the “minimum wage” employee to work after the first 40 hours, by federal protection the worker received $7.73 additional hourly wages as time-and-a-half overtime pay.

If there were no Bush regulations, a long workweek, even for a “minimum wage” worker, would pay at least $5.15 an hour for the first 40 hours, and no less than $7.73 an hour for all hours over the first 40. This would provide, assuming an 80-hour week, an effective salary [$6.44 (hourly wage averaging the $5.15 straight-time with the $7.73 overtime wages) x 80 hours x 50 weeks] of $25,760. For 90 hours a week, with time-and-a-half overtime pay as measured according to the “minimum wage,” the effective annual salary would be $29,625. The President, instead, sets the lower salary of $22,100 as his way for corporate America to avoid paying overtime altogether.

Subtract the President’s $22,100 overtime-exempt salary figure from the $29,625 minimum-wage-and-overtime computation, multiply the $7,525 difference by millions upon millions of American workers, and you begin to see the magnitude of the financial boon to corporations from the simple elimination of worker protections in areas of wages and hours. $4.91 an hour, potentially less, becomes the new effective hourly pay rate for the hardest pressed workers in Bush’s brave new wage world. They won’t have time to do much but work, eat and sleep.

Assume the President’s corporate agenda prevails. At $22,100, the Bush salary amount would yield $11.05 per hour if you only had to work 40 hours a week, 50 weeks per year. $11.05 as an abstraction is more than double the federally set “minimum wage” of $5.15 per hour on a 40-hour workweek. But in reality, the Bush regulations give corporations no reason not to work their “full-time” employees 60 hours per week, 80 hours per week, 90 hours, or more, as long as the $22,100 salary “cap” is paid.

The $22,100 salary, at 60 hours per week, 50 weeks per year, pays the worker $7.36 per hour. The 80-hour “full-time” workweek on the $22,100 salary pays the worker $5.52 per hour. At 90 hours per week, the effective rate of pay, on the $22,100 salary, is $4.91 per hour. Yes, that’s right, you almost cannot believe your eyes, as many times as you see the numbers. 90 hours a week, at $4.91 per hour. Before federal, state and local government withholding of taxes including SSI.

Why hasn’t the corporate press made this clear, since the federal wage-and-hour provisions will become enforcement reality after a short notice-and-comment period? For one thing, there’s a war on.

For another thing, Associated Press, Gannett and ClearChannel are corporate beneficiaries of Bush’s brave new wage world. It’s the legal duty of the corporate media, like all corporations, to save “human resource” costs and maximize the accounting bottom line, as long as they do not break the law of the land.

As a human being under Bush’s law of the land, you retain your technical freedom. Legally, you’re neither a slave nor an indentured servant. You could quit your job in a national market where all corporations are federally protected in the same way by the new Bush regulations. But if you decide to keep your job and pay your bills, your employer could require you to work 60 hours, 80 hours, 90 hours, or even longer per week, without overtime pay, in a job where you used to get time-and-a-half wages after the first 40 hours. Businesses stay open on weekends now. Saturday and Sunday alone have 48 hours between them, when you could work.

The president’s regulations mention job attributes to excuse non-payment of overtime wages, but all exemptions from overtime and time-keeping will now be easy for corporations to justify on paper. The regulations apply to a real world where private litigation is prohibitively expensive for individual workers, and meaningful government oversight for employees no longer exists.

Before Bush’s brave new wage world, workers had begun to file significant numbers of federal collective-action lawsuits against employers. Workers had joined together to fight peacefully, in the legal system, against being overworked for corporate greed. The law supported the workers. The number of collective-action suits had jumped to 79, a record number, by 2001, so the Bush regime went for a rule change it did not announce until the week America went to war. As the Associated Press put it on March 27, 2003: “Employers have been pushing for changes in overtime pay regulations because of mounting lawsuits.”

The laws of the land give corporate CEOs a duty to maximize corporate profits. CEOs at the top echelon personally make millions of dollars a year by cuttings costs to improve the bottom line. Until now, CEOs could only dream about eliminating the 40-hour workweek as a way to get more out of the “human resources.” They could “downsize,” “reduce force” and move operations overseas where the wage scales were lower. But until now, CEOs could only fantasize about erasing time-and-a-half overtime pay, just by putting you on a $22,100 annual salary that lets the company work you however many hours the company wants.

The old wage-and-hour protections had been designed to correct sweatshop and wage-slave conditions in America. While $5.15 per hour in early 2003 was not considered the best pay, at least as a full-time, minimum-wage employee, your life had typically been your own after the 8 hours you logged at work, 5 days out of 7. You usually worked Monday to Friday, and had weekends off. You were generally free to go, outside your 40 hours a week.

Under the old wage-and-hour protections, as a minimum-wage worker, you could refuse to work “overtime,” beyond the 40-hour week, unless the company paid time-and-a-half of $7.73 an hour. All minimum-wage workers could count on managers scheduling the staff so that each employee would typically only work 40 hours in a week. The majority of corporations held to the 40-hour workweek, for the most part, so that their legal obligations to pay overtime would be limited. A company couldn’t just set fixed salaries, starting at the $22,100 salary basis test, and require employees to work whatever long hours suited the company.

At $5.15 straight-time pay, and $7.73 overtime, under the old wage-and-hour protections, the minimum-wage worker might have needed a second job to make ends meet. But, on the 40- or 50-hour workweek, he still had time to go fishing. She still had time to help her children learn to sing, or grow flowers. Or protest the cruel war waging, that Johnny has to fight.

Now, reading about this, you might get angry, or depressed. But your “benefits” will probably include the company’s EAP, Employee Assistance Plan, and your access to what the corporate media calls “Big Pharma.” Your worker “benefits” will cover your prescription for Paxil or Prozac, to act like time-released low-dose speed for your brain, suppress your empathy, and generally help you feel better about your job. Next thing you know, you’re not so angry or depressed, after all. You’ll have one of Big Pharma’s drug pamphlets. It won’t tell you about the risks of psych-drugging to your long-term physical, emotional, mental and spiritual health. Nobody will link you to the website of Peter Breggin, M.D., http://www.breggin.com/, or provide you with the anti-psych-drug database. The corporate internet “service providers” may block access to sites like Dr. Breggin’s, in Bush’s brave new wage world. Think it couldn’t happen? Take a look:

"When Democracy Failed: The Warning of History" http://www.newswithviews.com/history/history4.htm
by Thom Hartmann.

It is impossible to predict exactly how Bush’s brave new wage world would be implemented. At first, perhaps, the longer “full-time” 60-to-90-hour workweeks for the $22,100+ salaried caste would start “only for the peak times,” around the holidays and taking inventory. At the 60-hour workweek (12-hour workdays, plus an hour each day for a quickly eaten meal and a short break), you would need to be at work by 6 a.m. and stay until 7 p.m. Or, depending on your shift and what the company required, sometimes you would arrive by 9 a.m. and stay until 10 p.m.

Over time, your workweek could creep up to 16-hour days, especially if the company said it needed your sacrifices in a time of war. On Fridays, at the break before your night shift began, your company might hold worker pep rallies, using the same model ClearChannel test-marketed in March 2003 to “support the troops.”

Maybe your employee “benefits” would expand to provide barracks living and chow, cafeteria-style. The company store might dock your pay for your room and board. In January 2003, the Thompson Publishing Group reported that in a speech before the American Bar Association, Department of Labor’s Wage and Hour Administrator Tammy McCutchen advised that the government was continuing to wrestle with the salary basis test, including how the test applies in pay-docking situations.

If you didn’t want your pay docked for “three hots and a cot,” you’d need to commute, before and after your 16-hour day. The barracks and food line might not look so bad, measured against your responsibility to find, buy, insure, register, license, maintain and gas your own car, plus drive it to and from work when you’re exhausted.

You might have been able to ride the bus to work back when you had a 40-hour workweek. Now, as part of the worker caste above the $22,100 line, you wonder why you never protested that your taxpayer dollars never funded a public transit system that would run to and from your house with any frequency after the “9 to 5” hours.

You’re not a slave and you still have the right to quit. But, you keep your job because you don’t want poverty and homelessness for your children. Besides, all corporations adopted the same policies around the $22,100 salary line in Bush’s brave new wage world. It’s the law.

Are you reading this, and hoping for a different vision of the future? If so, there is still time, and some questions you can ask. For instance, what did your tax dollars do this year? It’s gotten more and difficult to research that kind of information during the Bush administration.

Somebody, maybe you and I, funded the March 27, 2003 reports circulating in the corporate media that: “Employers could face [A] $334 million to $895 million in direct payroll costs for those [Bush wage-and-hour] changes and [B] could face overall costs of $870 million to $1.57 billion.” (Source: Associated Press.)

Would that be [A] the $334 million fix, one-time only, to convert the corporate payroll and accounting systems nationwide because the weekly work hours of the $22,100+ salary caste no longer need to get recorded or reported, and [B] a one-time additional amount over the $334 million, totaling $870 million to $1.57 billion in training costs to accustom employees to their new responsibilities as the $22,100+ salary caste?

The Associated Press went on to indicate a mysterious point [C]: “Officials say increased productivity [for corporations] and fewer lawsuits could amount to savings [for corporations] of $1.1 billion to $1.9 billion.” Would this be a $1.9 billion savings to the corporations each year, from wages they no longer have to pay their now overworked $22,100+ salary caste which has lost any effective legal remedy against wage-and-hour abuses?

As a public, we deserve straight answers to [A], [B] and [C]. President Bush’s proposed wage-and-hour changes affect virtually every industry in America. Leigh Strope’s Associated Press article, on March 27, 2003, admitted the sweeping nature of the changes: “Industries most affected by the [wage-and-hour] changes would be construction, retail, health care, business services and personal services. …” Quoting the Associated Press is a fair-use educational purpose if there ever was one, because we have been left to do the math for ourselves.

In the world pre-Bush, if corporations flaunted the overtime requirements as scofflaws, lawsuits could require them to pay workers back pay, even penalties, for the time over the 40-hour workweek that the employers “suffered or permitted” their employees to work without pay. Bush’s brave new wage world would change that to suffering, for the workers, and permission, for the corporations.

In today’s job market, before the corporate protections of the Bush regulations have gone into effect, Osco Drugs, on the corner in my neighborhood, starts part-time student help above the “minimum wage” at around $7 per hour. Osco raises workers quickly, to almost $8 per hour.

Osco, a corporation like so many others, presently tries to hold “full-time” employees to the 40-hour workweek, because of costs. As “Ben,” one of Osco’s younger workers, told me on March 28, 2003, “Management doesn’t like to have to pay the time and a half.”

Next to Osco is an AM/PM mini-mart, with Arco gasoline pumps. At the beginning of last week it cost $22 to fill the tank of my car; today it cost $35. A decal of the U.S. flag is on the post next to the pump, and a cloth flag on a pole flies from the doorway of the store. On the pump is a sign about Arco’s “Business Fuel Card Program.” The sign’s most prominent lettering says: “Every CEO we asked preferred saving money over wasting it.”

At Osco and similar corporations today, for however briefly it may last, federal law still requires corporate time-keeping to account for regular and overtime pay (at the 40-hour per week benchmark, for virtually all employees). The federal wage-and-hour protections for workers corrected widespread corporate abuses of workers, all across America, in our grandparents’ and great-grandparents’ era. Labor organizers fought and had their blood spilled to obtain these wage-and-hour protections for all American workers, even those who didn’t want a union. As a result of those sacrifices, this week at Osco, even the student help gets time-and-a half pay (almost $12 per hour) if they have to put in more than a 40-hour week.

As young Ben put it, late Friday afternoon on a March day in Tempe, Arizona, “It [time- and-a-half pay] can happen, even for me.”

At least for now.

About the author (Ruth’s note):

With deep appreciation for the human rights activists who have graced my life, I have provided this citizen’s regulatory review from the following experience: my earning the J.D. degree from the University of Virginia’s School of Law; past service on the law school’s “national litigation panel;” past experience as a labor relations attorney; past assignments as an arbitrator for the federal district court; and past service for the trial and appellate courts of Arizona as a judge pro tempore. (I left Arizona law practice in 1999 after astonishing backlash against my reform efforts --- synchronized immunized perjury, sealed and manipulated records, on and on. Still, the training for analytical thinking never leaves a person who was once a lawyer.)

What can you do to stop Bush’s brave new wage world?

There are the time-honored ways of protesting and seeking change in government regulation, always available to Americans as long as our constitution remains intact, without martial law or other means of stifling communication about what’s not right.

You can let your elected representatives know how you feel.

You can go to the library and get on-line to research general legal information for yourself, and take peaceful yet powerful action.

You can rent the movie, Norma Rae, for which Sally Field won an Oscar.

You can remember at what cost our freedoms have been won by the real people who inspired movies like Norma Rae.

You can pray that eternal Love will trump man’s inhumanity to man.

Also, right now, in the wage-and-hour notice-and-comment period, before President Bush’s regulations have come to pass, you can object to the Bush proposals by contacting:

Tammy D. McCutchen, Administrator, Wage and Hour Division, Department of Labor, Employment Standards Administration, 200 Constitution Ave. N.W., FP Building Room S3502, Washington, D.C.; phone 202-693-0051; fax 202-693-1432.
http://www.whatreallyhappened.com/wageworld.html

Copyright © 2003 Ruth Sproull. All Rights Reserved.