Another Fine Mess

The Texas judge who threw out the Obama administration’s rule on overtime exempt status needn’t have bothered, had he? The Trump administration wasn’t going to let it stand anyway, right? Not with the Republican Congress on his side!

The legal basis for throwing the rule out doesn’t concern me here. My question-is, who are the losers and who the gainers by the new rule, which was supposed to have gone into effect next year? Specifically, aren’t some of the losers Trump proletarians, working class, uneducated, white voters, many from rural counties? But if the gainers are Establishment Republicans, here lies a contradiction.

The rule would raise the annual earnings floor for overtime exempt status from about $23,000 to about $47,000. Who would be affected? Under current law, for example, the owner of a gas station or convenience store can make somebody a manager, that is, exempt by definition of their job duties, and as long as he or she makes at least $23,000 annually, the owner doesn’t have to pay them overtime. They do have to be replaced if they get tired of the extra hours. But they’re not irreplaceable.

One way to think about this is that, under the new rule, not just the working poor, but the whole of the lower two quintiles of earners would have to be paid overtime under federal law when they work more than 40 hours a week, regardless of their job responsibilities. The middle quintile begins with earners making $41,187 annually; the mean earnings in the second lowest quintile is $31,087 (2014 data).

Another way is to think again about convenience store clerks. Every town in the little red counties Trump carried all across the country – over 2,000 of them – has a gas station or convenience store even if it has nothing else. The managers and assistant managers of those stores might make enough to be overtime exempt under the old rule, which dates to 2002. But maybe not under the Obama rule. Presumably some of them are among the new Republican voters Trump brought into the party. Whether being working class makes the service industry proletarian may be debated. They work for an hourly wage like proletarians, but it is a little harder to see how their services generate surplus value for accumulation to capital the way labor does in manufacturing.

But that’s not essential to the argument that there’s a contradiction either. What’s the worst fear of an hourly worker in the second quintile? Joining the working poor in the lowest quintile. Rejecting the Obama rule does nothing to remove that working class fear.

But it does permit the owner of the enterprise to put what he might have paid in overtime back towards the accumulation of capital. That is, the owner’s bourgeois class interests are in contradiction with those of the worker – the so-called manager.

The more gas stations and convenience stores owned, the bigger the bourgeois, and the bigger the class interest. Until you find yourself in the McDonald’s Corporation boardroom with the Establishment Republican elite, or some other place where the contradiction between working class fears and the interests of the shareholders looms large.

Here’s another fine mess Trump has got his party into!

Originally posted in Economic Populist, A Community Site for Economics Freaks and Geeks, on November 30, 2016.