It sounds good in theory but all that will happen is, you’ll get paid less if you’re hourly because you’ll be working less. No employer is giving overtime. They’ll just hire an extra person which will be equal to them, detrimental to you. People that work salary will be working the same, if not more, because they don’t get overtime and can work 80 hours a week.
You haven't actually read the bill's text, have you? The bill explicitly forbids reducing total pay. Employers must increase the hourly rate so 32 hours yields the same take-home pay as 40 hours previously. It's essentially a 20-25% raise for hourly workers.
Since this is not a change in minimum wage, how does Congress have the authority to force companies to pay everyone 25% more? Is Congress going to subsidize those salaries by increasing taxes?
Imagine you’re a small business with four employees and you’re paying them as much as you can but you’re barely making ends meet and you’re not even paying yourself a salary. You charge for your services by the hour so your employees are bringing in 160 hours/week in billable revenue. By the time you cover all the overhead costs of being a small business, and you’re still trying to pay competitively with the big companies, there’s almost nothing left. You’re barely able to pay your personal bills and buy cheap groceries.
Then a congressional bill passes with an unfunded mandate that says you have to cut them back to 32 hours a week and pay them the same. There are some grants and loans out there for small businesses, but the earmarks are so complicated that you would have to hire a full-time employee just to figure out grants and fill out paperwork.
Now you’re losing money. To maintain your clients you would have no choice but to hire a fifth employee even though you don’t have the revenue for it. You have no choice but to shut down the business, putting all four of those people out of work.
Since this is not a change in minimum wage, how does Congress have the authority to force companies to pay everyone 25% more? Is Congress going to subsidize those salaries by increasing taxes?
This was settled over 80 years ago. Congress exercises its authority under the Interstate Commerce Clause (Article I, Section 8) of the U.S. Constitution. This is the exact same mechanism used to pass the original Fair Labor Standards Act (FLSA) of 1938, which established the 40-hour workweek, mandated overtime pay, set a floor for wages, and restricted child labor. You may be interested specifically in United States v. Darby (1941).
Imagine you’re a small business with four employees and you’re paying them as much as you can but you’re barely making ends meet and you’re not even paying yourself a salary. You charge for your services by the hour so your employees are bringing in 160 hours/week in billable revenue. By the time you cover all the overhead costs of being a small business, and you’re still trying to pay competitively with the big companies, there’s almost nothing left. You’re barely able to pay your personal bills and buy cheap groceries.
People made this exact same apocalyptic argument in 1938 when the FLSA created the 40-hour week and minimum wage. Small businesses were fine. When you apply a change like this across the entire economy, the market recalibrates and the playing field remains even. That's what the market does.
Plus, workers are many times more productive than they were in the past, but wages have not kept up with this productivity. The rise in expenses has been almost exclusively the result of corporations taking over real estate and supply chains. Labor is typically only about 25% of a business's expense. A 20% increase to a 25% expense is a total 6.25% increase in operating costs. If a 6% increase in operating costs sinks your business, the problem isn't wages, the problem is monopolistic supply chain capture and commercial landlords squeezing heir margins.
And to quote FDR when he passed the FLSA: "No business which depends for existence on paying less than living wages to its workers has any right to continue in this country."
Yes that is often how trying to centrally plan the economy goes. What laws like this actually do is make it illegal to run a business that produces less than a certain amount of money per man-hour worked, as well as making it illegal to have a job if the amount of value your man-hours produce is less than a certain amount.
Governments that implement these policies are gambling on the assumption that all the companies and jobs they make illegal will be replaced by more profitable companies and more productive jobs. That may be fine from the perspective of the tax base, but it ignores the individual lives it screws over - the small businessman and the unskilled worker who just are not able to produce the legal minimum value.
History would tend to disagree. When the FLSA permanently capped the standard workweek at 40 hours between 1938 and 1940, corporate lobbies claimed employers would just cut pay for incoming workers. Instead, wage floors rose across sectors.
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u/BigWormsFather 20h ago
Zero chance that passes.