by Mish

Why? Supervisors, don’t get paid overtime. It’s yet another artifact of Obamacare.

Please consider The Obama Recovery’s Illusory Manager Hiring Binge by Jed Graham.

Retailers and other modest-wage employers increasingly are relying on managers, an unusual feature of the Obama economic recovery. Discount and department stores have boosted managers’ ranks by 46% in less than two years, Bureau of Labor Statistics data show. And their hours worked have nearly doubled.
In reality, this is a classification change more than a hiring binge, and a logical response to the Obamacare employer mandate to provide full-time workers with health insurance or pay a fine. As companies shift some workers below 30 hours per week to avoid the mandate, they also have an incentive to stretch the cost of insuring full-timers over as many hours of work as possible.
Nowhere has the shift to managers been more visible than among general merchandise retailers. Since the start of 2013, when the earliest measurement period for the ObamaCare employer mandate got underway (only to be postponed in July of that year), managers at discount and department stores are working 6 million more hours each week, up a hard-to-believe 88% by November 2014. Meanwhile, the ranks of managers have increased by about 92,000, or 46%.

Congratulations!

Congratulations, you are now a manager, but don’t expect any more money. Instead, expect to work 50 hours for the same or slightly more pay.

Obama wants to put an end to that by revamping overtime rules for the first time since 2004.

  • Current: Only salaried workers who make less than $455 a week, or $23,660 a year, are guaranteed overtime pay.
  • Department of Labor Proposal: $42,000 a year ($808 a week).
  • EPI Recommendation: The  Economic Policy Institute (EPI), wants to increase the limit to a minimum of  $51,168 ($984 a week).

RECOMMENDED ARTICLES

EPI Proposals

The Department of Labor threshold would expand overtime to 3.5 million managers, while EPI Proposals would affect between 6.1 million and 10.4 million workers.

In the past year, four significant proposals have been made. The lowest proposal, for a threshold of $807 per week or $42,000 a year, is rumored to be under consideration at the Department of Labor (DOL). Jared Bernstein and I recommended a simple inflation adjustment of the 1975 threshold: $984 per week or $51,168 a year. In a paper for EPI, Heidi Shierholz suggested that $1,122 per week, or $58,344 a year, was appropriate because it would guarantee that the same share of salaried workers receive overtime protection as were protected in 1975—after adjusting for the different educational composition of the workforce today. The highest figure, proposed by Nick Hanauer, is $1,327 per week, or $69,004 a year. It represents the salary level that would cover the same share of salaried workers as in 1975, but without adjustments for changed demographics.

Image placeholder title

National Retail Federation President Matthew Shay last fall called on industry leaders to “work overtime on overtime.

“The proposal is targeted largely at retailers: Overtime could become mandatory for assistant managers making as much as $50,000 if they spend too much time jumping in to work a cash register, stock shelves or help customers,” Shay wrote.

If Obama does what the EPI asks, expect the ranks of managers to thin dramatically with still more reliance on parttime work and still more double-counting of employees in the establishment job survey.

Mike “Mish” Shedlock

Retail Department Store Carnage: Amazon to Blame? Mish 12-Point Summation

Retail department store sales are in a funk. Macys, Nordstrom, Dillards, Kohls, and Ralph Lauren have all reported dismal sales or profits.

Productivity Up 2.9% - Real Hourly Earnings Down: Thank You Fed!

Productivity for the second quarter rose 2.9%. Year-over-year inflation-adjusted hourly earnings are down.

Growing Movement To Disband Police Departments

In response to Hoschton Georgia Dissolves Police Department I received an email from “Adam” who writes ..

Retail Sector Adds 253,000 Jobs in 10 Months but Aggregate Hours Worked Unchanged: Why?

How is it that employment in the retail sector increased by 253,000 jobs since last August, yet total aggregate hours worked has not budged an inch?

Supersaturation and Store Cannibalization: McDonald’s to Close 700 Stores

McDonald’s is closing 700 stores this year, 350 of which took place first quarter. That sounds like a lot but it pales in comparison to the 32,500 stores in the chain.

Retail Sales Disappoint Again: Department Stores Clobbered in 2017

Economists were looking for a big rebound in retail sales in April from a dismal showing in March.

Real Hourly Earnings Decrease 0.1%, Real Weekly Earnings Drop 0.4%, Hooray!

As a result of a rising CPI real hourly earnings are down 0.1% for the month. Coupled with shrinking work hours, real weekly earnings declined 0.4% for the month.

Congratulations Workers! You Make a Penny More Per Hour Than Last Month

The average worker makes a penny more per hour than last month in real terms. The year-over-year gain is precisely zero.

Deflation Hits Porn Industry, Canadian Grocery Stores, Pension Plans, Newspapers, Firefighters.

While nearly everyone is worried about inflation, deflation is hitting a wide gamut of white collar, blue collar, and no collar industries. Let’s take a look.