Workers are never better off under comp time than overtime—and they are typically worse off
Once again, a bill promoting comp time is being paraded out by congressional Republicans and will be the subject of a hearing in the House this morning. The bill would allow private sector employers to offer comp time at time-and-a-half in lieu of overtime pay when an employee works more than 40 hours in a week. It is being touted by congressional Republicans as a boon to worker flexibility, but do not be fooled—everything the comp time bill purports to provide for workers is actually already available under the overtime provisions of the Fair Labor Standards Act. The bill only provides a new employer right to avoid paying workers the overtime they have earned.
Here are a couple scenarios to show workers are never better off under the comp time bill.
First, the easy example: consider the very common case of the low- or moderate-wage workers whose paycheck is not enough for them to make ends meet, and who would always prefer to work extra hours to get extra pay. Under comp time, these workers give up their right to overtime earnings in exchange for future time off. This is not what they need or want and they are unambiguously worse off under comp time than overtime.
But what about a worker who doesn’t need or want the overtime pay and prefers the time—are they better off under the comp time bill than under current law which provides overtime pay for working more than 40 hours a week? Nope! At best they are back at neutral.
Trump administration trade policy review misses the big picture
The Trump administration announced last week that it would sign two executive actions to launch a review of U.S. trade policy. A review of trade policy and its potential to harm U.S. workers is welcome and long overdue. However, the specifics of the review offered by President Trump mean that it is likely to fail to provide any help to American workers, in part because it asks the wrong questions.
The president’s first order requires Secretary of Commerce Wilbur Ross and White House Trade Council to “identify every form of trade abuse and every nonreciprocal practice that contributes to the U.S. trade deficit,” according to the commerce secretary. The report is to be completed within 90 days, with an analysis of the detailed cause of the deficit “by country and major product.” But the trade deficit is not a “product by product” or a “country by country” problem. We know what it is caused by and what should be done about it.
The trade deficit is not a bilateral problem between the United States and individual countries. The U.S. trade deficit is a result of global trade imbalances. There are ten to twenty countries that have developed large, persistent, structural trade surpluses that are distorting trade flows worldwide. The top ten surplus countries are shown in Figure A below. In 2015, these countries, led by China, Germany, Japan, Korea, and Taiwan, had a collective trade surplus of approximately $1.5 trillion. (The figures reported are current account balances, the broadest measure of trade in goods, services and income.)[1] The United States’ current account deficit of $463 billion in 2015 accounted for less than one third of the total surplus accumulated by the big surplus traders. Other countries have also suffered from persistent, structural trade deficits, job losses, and downward pressure on wages, including Great Britain, Brazil, Australia, and Mexico. Attacking the root causes of global trade imbalances will benefit all deficit countries, and not just the United States.
Unions help narrow the gender wage gap
Tuesday, April 4th is Equal Pay Day— the day that marks when a typical woman’s earnings catch up to what a man earned in the previous year. The gender wage gap is a measure of pay disparity between men and women. The research is conclusive: gender wage gaps exist across the wage distribution and among workers of every education level. The median woman worker (that worker in the exact middle of the distribution of women’s wages) is paid 83 cents for every dollar that the median man is paid. Among workers who have a college degree or advanced degree, the gap is even larger, with women being paid only 73 cents on the male dollar. Women of color face dual penalties of racial and gender-based pay gaps; black and Hispanic women are paid only 65 cents and 59 cents on the white male dollar.
Closing the gender wage gap is essential to helping women achieve economic security. We should use all the tools available to combat the factors contributing to pay disparities. Some of these tools include establishing standardized rates of pay, requiring more transparency in compensation data, strongly enforcing antidiscrimination laws, and allowing workers to earn additional benefits such as paid sick and family leave, which help enable workers to balance demands at home and at work.
For the vast majority of women, true economic security and a fair share of the economy’s growth will require combining progress in closing gender-based pay disparities with progress in linking their wage growth to economy-wide productivity growth, a linkage that has been severed in recent decades. The levers that will allow the wages of the vast majority of both men and women’s wages to benefit from overall economic growth include allowing the economy to reach and stay at genuine full employment, and raising labor standards such as updating the minimum wage and the overtime threshold.
Policy Watch: Tracking Congress and the administration’s rollback of workers’ rights
Last week, the Perkins Project launched the Worker Rights and Wages Policy Watch, which tracks actions by the Trump administration, Congress, and federal agencies that affect working people and the economy. A review of Policy Watch posts to date shows President Trump and congressional Republicans’ commitment to advancing an agenda that favors corporate interests ahead of workers. Consider their actions just this week: on Monday, President Trump signed into law a measure blocking the Fair Pay and Safe Workplaces Rule which would have helped ensure that federal contracts were not awarded to companies with track records of labor and employment law violations. That same day, the Department of Labor announced a proposed delay of a rule aimed at improving the health and safety of miners.
Meanwhile, while most of the news coverage was focused on House Republicans’ inability to repeal and replace the Affordable Care Act, they have been quietly overturning important worker protections and in the first few months of this session, making it more difficult for federal agencies to enforce labor and employment laws. One of these measures mandates that agencies place compliance cost considerations above all else, relegating the benefits to workers and consumers to secondary status.
The administration has also repeatedly placed corporate interests ahead of workers. In addition to this week’s announcement of a proposed delay of a rule to enhance workplace safety standards for miners, the administration has proposed delaying the implementation of the “fiduciary rule,” which would require financial professionals to act in their clients’ best interests when recommending investment products or strategies to people saving for retirement. The Trump administration’s proposed delay of 60 days will cost workers saving for retirement $3.7 billion.
The Trump administration and congressional Republicans have already taken a number of actions that hurt workers and stack the deck for corporate interests. The Perkins Project Policy Watch will continue to track what they do and provide information on how their actions impact our nation’s workers.
Modern-day Braceros: The United States has 450,000 guestworkers in low-wage jobs and doesn’t need more
On César Chávez Day, lost in all the news about the Trump administration’s criminalization and scapegoating of immigrants and attempts to withhold federal funds from cities with policies that protect immigrants, are the 450,000 low-wage-earning migrant workers employed in the United States through the H-2A, H-2B, and J-1 visa temporary foreign worker programs. Many of the workers in these temporary visa programs are in a precarious situation and vulnerable to abuse and retaliation at the hands of employers and their agents.
These “guestworkers” often arrive in the United States in debt, and are tied to and controlled by their employers. Research shows guestworkers are often paid lower wages than similarly situated U.S. workers, and earn wages similar to those of undocumented immigrant workers. This is reminiscent of the Bracero Program—a large guestworker program in the 1940s, 50s, and 60s that admitted hundreds of thousands of Mexican workers to work temporarily on U.S. farms and in other low-wage occupations—and which César Chávez fought against. Chávez knew that exploited, indentured, and underpaid workers would degrade labor standards for all workers in the United States, including immigrants. After scandals and political pressure, and President John F. Kennedy campaigning against it, the program was terminated in 1964.
Sadly, America has not learned its lesson. The United States is repeating an historical mistake, once again admitting large numbers of guestworkers in low-wage occupations. With the possibility looming that the Trump administration will reduce enforcement and oversight in guestworker programs—which will be further exacerbated if Trump’s proposed 21 percent budget cuts to the Department of Labor (DOL) are enacted—the United States may once again face scandals like the one where the bodies of guestworkers who died in a traffic accident were not immediately claimed, because farm labor contractors and agricultural growers argued over who their employer was.
Low-wage African American workers have increased annual work hours most since 1979
Over the last several decades, black workers have been offering more to the economy and the labor market to incredibly disappointing results in pay and unemployment. Some have argued that the disparity in wages between blacks and white is the result of white workers working longer and harder than black workers. They blame black workers for racial wage gaps, saying that they should do anything from getting more education to simply working harder. Such explanations minimize the role of racial discrimination on labor market outcomes, while perpetuating racial bias and stereotypes of black workers as unmotivated and lazy.
And the data show they are simply false: hours and weeks worked have increased for both races, with a larger increase for black workers over the last several decades. The increase in annual hours is particularly striking for workers in the bottom 40 percent of the wage distribution, where it has been driven almost entirely by women.
Table 1 provides data on annual hours worked in 1979 and 2015 for workers ages 18–64 years old who report non-zero earnings during the year (so the averages are conditioned on working. In forthcoming research, we explicitly address trends in labor force participation). Work hours include paid vacations and time off, and therefore represent paid hours. The table also presents the percent change from 1979 to 2015 in annual hours, weeks worked, and weekly hours. These data are shown by race and wage fifth, or quintile.
Repealing prevailing wage laws hurts construction workers
For more than 40 years, big business and the Republican party have teamed up to drive down the wages of construction workers by attacking their unions, passing so-called “right-to-work laws”, and weakening or repealing prevailing wage laws— which protect construction wages from downward pressure. They have, unfortunately, been very successful. Construction wages are lower today than they were in 1970, despite 40 years of economic growth and a higher national income.
The real average hourly earnings of production/nonsupervisory construction workers were $26.17 in 1970, $26.00 in 1980, and $23.91 in 1990. Construction workers’ hourly earnings bottomed out at $22.97 in 1993 but have never fully recovered from their 1970 peak and were only $25.97 in 2016.
Preventing workplace injuries depends on good record-keeping
On a bipartisan basis going back at least to the Reagan administration, the Occupational Safety and Health Administration (OSHA)—the Department of Labor agency that enforces the right of workers to have a safe workplace—has required employers to keep accurate logs of injuries and illnesses, and has fined them if they fail to keep those logs for five years. Every OSHA administrator has recognized the value of this record-keeping, as a way to make employers pay attention to unsafe practices and address them, as well as to ensure accurate statistics for research, to show progress or lack of progress in improving workplace safety, and to help target the most dangerous workplaces.
Nevertheless, in Volks Constructors v Secretary of Labor, a court blocked OSHA from fining employers for various record-keeping failures that occurred more than 6 months before the citation. The court ruled that OSHA’s regulations didn’t clearly establish that the duty to maintain accurate records is an ongoing duty rather than just a duty to record each incident accurately at the time it occurs. Thus, if OSHA finds that an employer has for many years been hiding the fact that workers have repeatedly been burned, for example, or has failed to record numerous forklift accidents and injuries, it can only cite the employer for inaccuracies arising within the past six months.
Farmworker wages in California: Large gap between full-time equivalent and actual earnings
A report in the LA Times last week explored why farmers in the Central Valley are having a hard time finding enough workers, despite reportedly paying up to 40 percent more than the California minimum wage. “Today, farmworkers in the state earn about $30,000 a year if they work full time—about half the overall average pay in California,” notes the Times. “Most work fewer hours.” The second sentence here is key: most farmworkers are not employed 40 hours a week 52 weeks a year, so most earn far less than $30,000 per year. In fact, in 2015, workers who received their primary earnings from agricultural employers earned an average of $17,500—less than 60 percent of the average annual wage of a full-time equivalent (FTE) worker in California.
Many farmworkers are paid an hourly rate higher than California’s minimum wage—$10.00 or $10.50 an hour in 2017, depending on whether the employer has 25 or less, or 26 or more employees, respectively—and workers who are paid piece rates, which reflect how much they pick or prune, often earn $12 to $14 an hour. Many young male farmworkers aim to earn $100 a day, which is $12.50 an hour for an eight-hour day and $14.30 an hour for a seven-hour day. But farmworkers typically are not employed in agriculture year-round. Many farm jobs are seasonal, and few workers migrate between California farming regions—those who pick vegetables in southern California deserts between January and May rarely move to the San Joaquin Valley to pick fruit between July and September.
Shortchanging education, training, and R&D is no way to make America great again
Yesterday, the Trump administration released its budget blueprint, which, while it’s unlikely to be passed in its current form by Congress, sets out the administration’s priorities for the years ahead. Simply put, the Trump budget transfers funds from programs that keep people fed and sheltered, protect them from disease and environmental threats, or educate them—and gives those funds to defense contractors to build more weapons, planes, and ships. But it also seems to have the purpose of making America more ignorant, less informed about the challenges and problems that face us, and less able to understand and develop solutions to those challenges and problems. It could be called a “lobotomy budget” because it effectively removes big pieces of the government’s brain.
Here are some examples of how the budget leaves students less educated and less prepared for the 21st century workforce:
- The budget eliminates the Federal Supplemental Educational Opportunity Grant, a need-based grant program that helps 1.6 million undergraduate students pay for college.
- The budget cuts $1.2 billion for the 21st Century Community Learning Center before and after school programs: