As most people here probably know, Mr. Obama has proposed changing overtime regulations so that more people will be covered. Megan McArdle’s critique of this proposal is, as usual, well-spoken and in my opinion mostly spot-on. But she unfortunately neglects and seems to assume away one of the arguments in favor of Mr. Obama’s proposal.

Phillippe's French Dip Restuarant. Photo: MargaretNapier. <a href="">License: creative commons, attribution, no derivatives</a>.

Phillippe’s French Dip Restuarant. Photo: MargaretNapier. License: creative commons, attribution, no derivatives.

McArdle points out that changing the overtime requirements to include erstwhile exempt employees would encourage employers to more closely monitor those employees’ hours. For people like her–and like me, who in my current job is exempt–that would work as an intrusion, assuming it would apply to us at all. (Other than snippets from the news and internet, I’m not sure on the specifics of Mr. Obama’s proposal. But I think she and I would still be exempt, even though I, for one, earn less than the $50K+ threshold of the proposed regulations.)

But here is where she errs:

I have a vague idea of what it would be like to manage a Chipotle, in that I can probably specify the major duties involved, like ordering stuff and training workers. But I have no idea what that manager’s biggest day-to-day challenge is, what it takes to do the job well, what he enjoys about his work and what he doesn’t, where she’s hoping to get and what she’s willing to do to get there.

You know who knows that? The manager and the manager’s boss: the people who are currently agreeing to the terms of employment. The administration is proposing to overrule their judgment and force overtime restrictions onto them. But if I asked that Chipotle manager whether he wants the possibility of overtime pay and the certainty of clock-punching that comes with it, he might give an answer quite a bit like my own — all about why his job, like mine, shouldn’t fall under those rigid external rules.

The error isn’t necessarily in what McArdle suggests about the manager and his/her boss knowing their business and interests better than a regulator would. And as applied to Chipotle or to any number of jobs, or to any number of managers, she might be right. The error, though, is that a lot of service jobs–maybe not Chipotle, but probably Burger King, Wendy’s, McDonalds, Hardee’s, etc.–hire “shift managers” who after a certain training period are put on salary and sometimes must work in excess of 40 hours per week. Their pay may be greater to put them above the current overtime-qualifying wage threshold, and they may very well be managers in key respects, but they are also in many ways just as much workers as they are managers. These aren’t the assistant managers or co-managers or general managers.

There’s much I don’t know. For instance, I just said “a lot of service jobs…hire ‘shift managers.'” Maybe “a lot” isn’t that many, and maybe even those earn so little that the overtime requirements do apply to them. The anecdata I rely on are faulty because in addition to being anecdata, they’re about 20 years old. But Obama’s proposal addresses what to “a lot” of people is a real grievance. Whether that grievance admits of a remedy, and whether his proposal is that remedy or might in some ways make things worse, is another question. I, with McArdle, suspect the remedy might be worse and am at best ambivalent about the proposal.

I probably haven’t done justice to McArdle’s column. It’s about more than this one point I claim she neglects. So of course, read the whole thing.

Category: Market

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2 Responses to I’m 90% with you, McArdle

  1. trumwill says:

    This is kind of a tough issue for me. It does seem to me that the overtime exemptions have been abused, but $50k a year is an awfully high threshold.

    • Yeah. I do wonder if Obama is picking a higher figure and hoping to settle on a lower one. (I’m confused here. I understand this is an interpretive rule that the president, apparently on his own, has the authority to implement. This politico article lists a lot of exemptions that to my mind make the proposal less extreme than it seems. But $50k+ seems a little high to me.)

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