President Obama wants to accession the federal minimum pay for salaried admiral from $24,000 to $52,000. His angle is below.
As of this writing, the video has alone 12,000 views. Perhaps because it’s a circuitous issue. So let’s try and breach it down and accept what this could beggarly for you and the economy.
In the eyes of the federal government, there are two types of employee.
Hourly: lower able workers paid on an alternate base with overtime.
Salaried: able professionals or managers with a pale in the business. Read about the abilities for salaried plan here.
For instance, at a car factory, the advisers alive the accouterment on the attic are about paid hourly, alive “on the clock.” Their administrator is generally “off the clock” and doesn’t address hours.
Hourly advisers are dejected collar. They usually accomplish specific, blueprint tasks and don’t accept a lot of say in the company’s operation. In return, the agent is affirmed an alternate allowance and overtime pay for every minute worked.
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The salaried agent works with greater abandon and ascendancy of their banking density. They’re white collar. In return, they accept a affirmed salary, no matter how abundant or how little they work.

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The minimum federal account bacon for a salaried agent is $455 a week, aloft from $250 in 2004 by George W. Bush (which, if adapted for inflation, would be $553 today). But abounding states accept their own laws. In my state, New York, the minimum is $600 a week. Obama now wants to accession that to $1,000 a anniversary for the able country.
Is a accession in minimum bacon acceptable for you, the abridgement and the country?
OBAMA’S PERSPECTIVE: THE FEDERAL GOVERNMENT NEEDS TO HELP THE AVERAGE WORKER AND IN DOING SO IT WILL MAKE US A STRONGER COUNTRY.
Obama explains his accuracy on the matter:
We’ve got to body an abridgement that works for everybody, not just a advantageous few. We apperceive from our history that our abridgement grows best from the boilerplate out, if advance is added broadly shared. So we’ve got to restore befalling for all – the abstraction that with harder plan and responsibility, you can get ahead.
This aesthetics is accurate by empiric affirmation from The Bread-and-butter Action Institute, a accelerating anticipate tank, who in a contempo abstraction concluded “the all-inclusive majority of U.S. workers—including white-collar and blue-collar workers and those with and afterwards a academy degree—have endured added than a decade of allowance stagnation.” Moreover, accumulated profits are at an all time high. To stop this abundance inequality, Obama holds, the federal government should arbitrate and force companies to allotment their abundance with their employees. This will actualize happier, added advantageous workers and admission the United States’ productivity. Additionally, if mid-level workers are authoritative added money and accretion their savings, they adeptness be added empowered in the approaching to abdicate their jobs and alpha their own businesses. Greater abundance administration from the top-down agency a greater, stronger bodies and country.
DARWIN’S PERSPECTIVE: WE’RE IN A HYPER-MERITOCRACY NOW AND ARTIFICIAL INFLATIONS WILL DO MORE HARM THAN GOOD.
Obama’s action adeptness be too conservative. He asks Americans to attending to “our history” for bread-and-butter face-lifting and to “restore” an old way of life. Some catechism wheather that’s even accessible in our accepted abstruse landscape. Tyler Cowen, a abstinent autonomous and economics professor at George Mason University, addendum that 60% of the jobs absent in the recession were “mid-wage” occupations, while 73% of the jobs created afterwards the recession were for lower-wage occupations—jobs that paid $13.52 an hour or less. From these stats and others, Cowen concludes:
Demand is ascent for low-pay, low-skill jobs, and it is ascent for high-pay, high-skill jobs, including tech and authoritative jobs, but pay is not ascent for the jobs in between…. There is no point in employing addition assistant. It’s the administrator who is the deficient input, and that is one way to anticipate about why authoritative salaries accept been traveling up so much.
Cowen’s point in simple language: progressive technology has taken us into an era breadth boilerplate workers aren’t necessary. Machines do their jobs now. The small, cognitive aristocratic runs the appearance on autopilot. Artificial inflations like redefining the bacon of an absolved authoritative agent won’t advice the boilerplate class. It will just accomplish advancement harder and accomplish boilerplate workers less adorable to employers.
MY PERSONAL OPINION?
I absolutely see some positives to accretion the minimum salary.
It makes it harder for companies to corruption absolved employees. Fast aliment restaurants, retail stores—any operation circuitous in concrete labor— assume to corruption agent exemptions and this could fix the botheration here.
It helps empower assertive boilerplate chic workers, decidedly those who accept formed a continued time at aloft corporations afterwards a raise.
It provides the government with added taxable assets to abate the deficit.
Yet, I’m agnostic of how this empowers advisers with technical, creative, or business backgrounds.
Imagine a baby company. This aggregation has 15 workers. These 15 workers are torn into three tiers.
5 are computer scientists with avant-garde algebraic and science degrees and abounding years of able experience. They accomplish about $80,000 a year and are salaried employees.
5 are inferior analysts with abstinent skills, some experience, and a lot of promise. On average, they accomplish about 40k annually and are all salaried.
5 are basal operators paid a baby alternate wage.
How would the aggregation acknowledge to this law?
Managing overtime isn’t easy—it’s an abominable blah area, decidedly for mid-level workers on computers. Do I accept to alarm out at lunch? What about if I’m bistro at my desk? How about the 20 account I spent chatting with my acquaintance on Gchat? Or researching something vaguely accompanying to my job? What about if I’m at plan but account Facebook? Or that casual buzz alarm with my bang-up to bound bright something up just afterwards I’ve larboard the office? (Payroll companies do accommodate technology for workers to alarm in to accomplish this easier, but it’s burdensome, and the a lot of able ones acquiesce a administrator absolute admission to employees’ screens. Ample corporations adeptness do this. But baby and mid-sized businesses will either just breach the law, abolish non-executive hires from their workforce, amount out harmful loopholes, or be affected to big brother their employees.)
Mid-level advisers aswell generally can’t assassinate tasks as fast as a added avant-garde and able employee. So, what do you do? You trim the fat. You blaze the boilerplate workers. You advance your best inferior analyst to an authoritative and accomplish them exempt. Again you go appropriate added authoritative aptitude hires who are added able and can get the plan done faster. And you outsource a lot. So our academic aggregation ends up searching like this:
7 admiral authoritative over 100k a year. (Pay the best bodies more, let the blow go.)
No mid-level employees. But assorted agencies for outsourcing, or a lot of acting workers on a activity by activity basis. Casual poaching of bodies from those agencies who are acceptable abundant to become admiral at the company.
8 bargain workers who specialize primarily in menial, blocked tasks accompanying to authoritative the authoritative agents added able and productive. Essentially, claimed assistants.
From here, we can analyze four antecedent apropos with a minimum bacon increase.
1. It encourages a accumulated degree arrangement and discourages mobility/mentorships in the workplace.You’re either a awful able authoritative authoritative a lot of money or a boilerplate allowance slave. Breadth is the boilerplate ground? What about the adolescent bodies who charge time to advance their skills? What if the aggregation can’t angel their acquirements with time-and-a-half overtime pay? Or, for earlier bodies who wish to about-face careers? Top admiral will be added alone and beneath accommodating to yield risks. Why appoint a amount of advisers who appearance abeyant if you could just appoint one or two experts who don’t charge authoritative abetment to do what the aggregation needs?
2. It supports absorption of adeptness and hurts baby and medium-size business.Imagine that you’ve started a company. You’re authoritative about $200,000 in acquirement a year. You appoint two bodies at a $35,000 salary. Because you’re a new company, you charge these bodies to plan 40, maybe even 50 hours a week. But you can’t allow to pay them overtime.
These two advisers are not starving. They’re not even in poverty. They’re in on the arena level, though. They accept the abeyant to acceleration and become top authoritative talent. A federal advance to admission the bacon for absolved admiral could accomplish this illegal. A law like this adeptness aching accumulated profits, but it won’t abate their power. It could even strengthen it by authoritative it harder for baby and mid-sized companies to yield their own operations to the next level, attempt with the ample corporations, and affect change.
3. It rewards automation and outsourcing.As application law gets added complex, companies will be added incentivized to abolish bodies altogether from the workplace. Consider Facebook. Endure year, they generated $7.872 billion in acquirement with alone 6,337 employees. How can a aggregation with so abundant acquirement accept so few employees? In the new economy, for bigger or worse, technology and tech geniuses are everything. The boilerplate getting is at best secondary. Additional activity laws, decidedly on the boilerplate class, just actuate the smartest minds to added address themselves award agency to plan with machines instead of humans, or just use mechanical turks.
4. It corrodes agent autonomy.The approaching of plan is about allotment employees, not authoritative them. The best companies already do this. Anticipate about Apple’s Bluesky program that allows advisers time to plan on their own affection projects. Or the bottom accepted 37 Signals or Auttomatic, breadth advisers don’t accept approved hours, or even appointed time at a axial office. Or even a behemothic like IBM, breadth 40% of their advisers telework. This is the approaching of business and it’s about acceptance advisers to reside their lives on their own time—not accept by some approximate 9-5 schedule. The approaching isn’t about clocking hours. It’s about accretion agent autonomy. Authoritative it added difficult for advisers to adeptness the beginning of salaried akin discourages this abandon and makes companies into overlords that charge to focus their activity on ecology time instead of agent development and satisfaction.
Core Concern: this adeptness annihilate the boilerplate worker.
The abridgement is run by a cerebral aristocratic who knows how to dispense machines. Added top-down restrictions on employment incentivizes leaders to relentlessly find agency to actualize self-serve chump interactions that obliterate boilerplate administration completely. This is already accident at grocery food with cocky check-out. It’s accident in the aggressive with drones. It’s accident with website development with companies like Squarespace. It’s even accident in the autograph apple with the brand of YouTube, Kinja, Medium, and Thought Catalog—where instead of paying agreeable creators, the focus is on architecture technology that sources agreeable for chargeless while alone paying a few aristocratic creators. And don’t overlook Amazon and their mission to automate the able retail sector.
What again will be able by this law? It adeptness accomplish it harder for the boilerplate artisan to become a salaried authoritative and it will acceptable animate companies to advance added in technology and beneath in people.
This seems like a simple law. Aren’t these apropos a bit hypersensitive?
Small accouterment can accept huge consequences. This is one that will be acquainted by baby and medium-size business all about the country. Complex, diverse, and nuanced realties can generally be hidden abaft simple rhetoric.
Obama’s action aswell seems be that of a fox, not a wolf. He hides his intentions, and agilely makes baby changes that in due time add up to absolute change. Obama appear this access rather alluringly in an account with The New Republic about how he got rid of “Don’t Ask Don’t Tell”:
There were advocates in the LGBT association who were bent at me, saying, “Why don’t you just assurance with a pen acclimation the Pentagon to do this?” And my altercation was that we could body a affiliation to get this done, that accepting the Pentagon on our ancillary and accepting them plan through that action so that they acquainted assured they could abide to backpack out their missions finer would accomplish it endure and accomplish it plan for the adventurous men and women, gays and lesbians, who were confined not just now but in the future. And the affidavit of the pudding actuality is that not alone did we get the law passed, but it’s acquired about no controversy. It’s been about thoroughly embraced, admitting had I just confused avant-garde with an authoritative order, there would accept been a huge blowback that adeptness accept set aback the could cause for a continued time.
This application change has the abeyant to accept an acute impact, even admitting it’s getting presented as something actual simple. Just like with the LGBT association and the Pentagon, the point is not to berserk accost the amount issue—but to silently convention a new administration anatomy with vagueness instead of transparency, to accomplish moves so coy that they’re harder to criticize, because at the moment, they assume inconsequential.
Perhaps the law will absorb the apropos aloft and be cardinal in which industries it targets. Perhaps a lot of acceptable can appear from this and I didn’t accent the absolute aspects of the legislation abundant . But a federal acclimation of what it agency to be an authoritative is something that needs to be approached with the absorption of a scalpel, not the edgeless force of an axe. I’m bleak of the adeptness of a massive bureaucracy to access this with the absorption all-important for absolute bread-and-butter change. But, I still accept hope. That’s why I voted for Obama in the aboriginal place. So here’s to hoping.