Bernie Sanders, the Vermont senator, recently proposed new legislation that would change federal overtime rules.
asserted
that → propose → rules
The new law, if passed, would require employers to pay a minimum 1.5 hours of overtime for each hour worked past 32 hours in a week.
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law → pass → week
Currently, overtime kicks in at 40 hours per week.
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overtime → kick → week
The requirement would phase in over a few years.
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requirement → phase → years
Who wouldn’t want that?
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Who → want → that
There’s just one problem: somebody has to pay for it.
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somebody → ’ → it
It’s math.
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It → ’ → ?
Say a company employs 100 people.
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company → say → people
And, for argument’s sake, say that each employee earns $50,000 annually for a 40-hour workweek.
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employee → say → workweek
Assuming 50 workweeks, that’s about $1,000 per week or $25 an hour.
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that → assume → week
Under Sanders’ proposal that employee would make $25 per hour for the first 32 hours and then be paid overtime of time and a half, or $37.50 for the additional eight hours to make it a 40-hour workweek.
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it → make → hours
Which means that for a full week the employer is now paying $1,100 per week or $55,000 per year for 50 weeks.
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employer → mean → weeks
That’s $5,000 more for each employee.
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That → ’ → employee
And it’s actually more than that.
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it → ’ → that
You have to add in federal and state taxes that an employer pays – about 7% of wages, which adds $350 more per year.
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which → have → year
A small business that employs 25 people would then be paying an additional $133,750 more per year under Sanders’ proposal.
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that → employ → proposal
If they had 50 employees it would be an added cost of $267,500 per year.
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it → have → year
Well, you can do the math from there.
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you → do → math
And I’m not including other benefits – retirement plan contributions, workers compensation, etc – that are usually calculated as a percentage of wages.
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that → include → wages
These costs would also go up.
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costs → go → ?
Of course, the business doesn’t have to pay for a 40-hour week.
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business → have → week
They can limit the workweek to 32 hours.
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They → limit → hours
But with unemployment and open jobs at historically low levels, I encounter very few businesses that can do this.
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that → encounter → this
They can’t find enough employees to do the work they have.
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they → find → work
No business wants to be forced to pay more for fewer hours.
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business → want → hours
Up until now, many business owners have been dabbling with AI.
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owners → dabble → AI
But the owner of a 50-person company would gladly spend $100,000 on an AI project to save $267,500 per year.
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owner → spend → year
Sanders wants a moratorium on AI development.
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Sanders → want → development
But now he’s proposing a law which would give employers another financial incentive to automate.
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which → propose → incentive
The CEOs of Microsoft, Google, Anthropic and OpenAI must love this.
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CEOs → love → this
The solution, I believe, is to accept that the workplace has changed.
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workplace → believe → ?
Today’s workers value compensation in different ways.
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workers → value → ways
It’s not just an hourly wage or a weekly paycheck.
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It → ’ → ?
Recent research suggests that additional time off can have psychological benefits that an equivalent cash bonus doesn’t provide.
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bonus → suggest → that
to a recent study in the Journal of Managerial Psychology, a majority of employees favored getting more time off over extra compensation.
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majority → favor → compensation
Researchers found that “a vacation time benefit gave surveyed employees an internalized sense of being treated and valued as a complete human being”.
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benefit → find → being
Getting paid a livable wage is of course important.
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paid → pay → course
But many workers, particularly in the younger generations that make up more than half of today’s workforce – want something just as important: balance.
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that → make → something
They want flexibility.
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They → want → flexibility
They want to spend more time with their families, traveling, relaxing and pursuing their own personal interests.
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They → want → interests
…and 9 more, not listed.
The Aporia
