BUSH'S BRAVE NEW WAGE WORLD
By Attorney Ruth Sproull
April 2, 2003
In the week after the second U.S. war began in Iraq, President Bush unveiled his new corporate agenda for the American working class.
President Bush's proposal looks innocent. But its effect would profoundly alter the economic relationship of American employers and their workers.
For one thing, the President's regulations allow corporations to eliminate "time-and-a-half" overtime pay, as a practical matter.
For another, the regulations encourage corporations to blend "part-time" low-wage hourly staff with a "full-time" low-salaried caste who, if paid above the $22,100 line, would have to work as many long hours over 40 per week as the company wants, for no extra pay.
The corporate press reported that the Bush administration, by wage-and-hour regulations, promotes a $22,100 annual salary demarcation. Associated Press stated on March 27, 2003, in an article by Leigh Strope: "Almost 110 million workers are covered by the law, about 80 percent of the work force ... Under the proposal, any 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."
The 40-hour workweek would become a thing of the past for "full-time" workers. In this way, the President's agenda would expand the American workweek, at the $22,100 annual salary level, to 60, 80, 90 or even more hours per week.
The effective hourly rate of pay for a 90-hour workweek at the $22,100 salary is $4.91. Before taxes and other withholding.
Even before the President's 2003 war, some Americans already worked 90 hours a week, or even more, to pay their family's bills. Now it could become the norm.
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, even a "minimum wage" worker, assuming an 80-hour week, would make 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 in the low-wage ranks.
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. 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, 90 hours, or more, as long as the $22,100 salary "cap" is paid. At 60 hours per week, 50 weeks per year, the $22,100 salary 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. Add some hours and $4.91, potentially less, becomes the new effective hourly pay rate for the hardest pressed workers.
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, 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.
In the world pre-Bush, if corporations flaunted the overtime requirements as scofflaws, lawsuits could require back pay, even penalties, for the time over the 40-hour workweek that the employers "suffered or permitted" employees to be worked without pay. The number of collective-action suits had jumped to 79, a record number, by 2001. The Bush regime went for a rule change it did not announce until America went to war in 2003. As the Associated Press put it on March 27, 2003: "Employers have been pushing for changes in overtime pay regulations because of mounting lawsuits."
Under the old protections, as a minimum-wage worker, the law said you could refuse to work "overtime," beyond the 40-hour week, unless the company paid time-and-a-half of $7.73 an hour. You could count in a reputable company on your manager typically scheduling the staff so that each "full-time" employee would 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.
While $5.15 per hour in early 2003 was not considered great 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.
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 you can expect corporations in Bush's brave new wage world to expand "benefits" in company EAPs, Employee Assistance Plans, including access to what corporate media calls "Big Pharma." Your worker "benefits" will include prescriptions for Paxil or Prozac, to act like low-dose speed for your brain, suppress your empathy, and 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 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 internet service providers may later block access to sites like Dr. Breggin's, any way. Think it couldn't happen? Take a look: "When Democracy Failed: The Warning of History" [www.newswithviews.com/history/history4.htm] by Thom Hartmann.
Bush's brave new wage world won't be implemented all at once. 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 in a 5-day workweek, 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 expand 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 include barracks living and chow, cafeteria-style. The company store might dock your pay for 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 still have the right to quit. But, you keep your job because you don't want your children to be homeless. 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 under President Bush.
Somebody, maybe you and I, funded the March 27, 2003 reports 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 heavy responsibilities as the $22,100+ salary caste?
The Associated Press included point [C]: "Officials say increased productivity and fewer lawsuits could amount to savings [for corporations] of $1.1 billion to $1.9 billion." Would that be increased productivity required of workers, netting a $1.9 billion savings to corporations each year, from wages they no longer have to pay the now overworked $22,100+ salary caste which has lost any effective legal remedy against wage-and-hour abuses?
Leigh Strope's Associated Press article, on March 27, 2003, admitted: "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. Now, in contrast with Bush's agenda for America's corporations and the working class, 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, like other corporations, presently tries to hold even its "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."
At Osco and similar corporations today, 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 wage-and-hour protections for workers corrected widespread corporate abuses of workers, all across America, in our grandparents' and great-grandparents' era. Labor organizers had their blood spilled to obtain these protections for all American workers. 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 still trusted, late Friday afternoon on a March day in Tempe, Arizona, "It [time-and-a-half pay] can happen, even for me."
But next to Osco is an AM/PM mini-mart, with Arco gasoline pumps. 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."
Laws of our land give corporate CEOs a duty to maximize profits. CEOs at the top echelon personally make million-dollar salaries 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, cut salaries and move operations overseas for the low wage scales. But CEOs could only fantasize, until now, about erasing time-and-a-half overtime pay, just by putting you at the $22,100 annual salary that lets the corporation work you however many long hours the corporation wants.
Call to Action:
What can you do to stop Bush's brave new wage world?
There are time-honored ways of protesting and seeking change in government regulation, 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 or affirm that eternal Love will trump man's inhumanity to man.
In the wage-and-hour notice-and-comment period, before President Bush's regulations have come to pass, you can object 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.
© 2003 Ruth Sproull - All Rights Reserved
Ruth Sproull went from Florida State University (B.A., summa cum laude) and National Public Radio to the University of Virginia School of Law (J.D.) and the National Litigation Panel. At the Creativity Institute of Arizona State University, she co-authored numerous articles (e.g., "Performance Appraisal for Matrix Management," Journal of the Society of Research Administrators, with SRA International Award in Research Administration at [www.srainternational.org], and "Creativity: Productivity Gold Mine?," Journal of Creative Behavior).
After professional successes as labor-relations counsel, federal prosecutor, federal arbitrator, federal criminal defense attorney and judge pro tempore of state trial and appellate courts, Ruth chose the role of activist advocate. She considers herself spectacularly unsuccessful as a legal-system reformer in Arizona, and left law practice in 1999. For comic relief to backlash (against her own legal activism and past representation of politically unpopular clients), Ruth does clean stand-up comedy. She also facilitates creativity groups, and develops workshops for compassionate human interaction and social justice. Her poem, "Making Sense," was published in Phoenix Downtown magazine in July 2002. E-Mail: [email protected]