The American Dilemma and How We Can Fix It

OVERTIME

When I was in grammar school, high school and college I always held part-time jobs.  Of course, these were hourly positions – in other words, I traded my services to my employer in exchange for an agreed upon rate they paid me per hour.  I’m sure everyone is familiar with this arrangement.

What I never understood was the concept of being paid at an “overtime rate”.  Yes, I knew that it was Federal law.  The last time I looked, employers were required to pay overtime (generally one and one half time the normal hourly wage, but it could be as high as twice or three times as much) if an employee worked more than eight hours in one day or forty hours in one week.

I guess the “logic” behind this is that if an employer asked one of his workers to spend that much time on the job, he was penalizing that person from spending time with his family and this was a way of compensating for it.  On one level it does make some sense.

I was never in a position where I worked enough to earn overtime in these part-time jobs so in essence the point was moot to me.  But I do remember a full-time co-worker clucking about the size of her check one week because she had nine hours of overtime pay on it.  Even as a youngster this caused me to think about the concept.

I knew from my experience that when I started work on a given day I was fresh, rested and ready to get the job done.  Generally, I only worked a few hours so nothing really changed for me in terms of my level of energy or focus.  But I also noticed that my full-time counterparts would start yawning as the afternoon progressed.  They had been at work all day and were simply getting tired.  Of course, if they had to work beyond their normal schedule – into “overtime territory” -they would continue to tire further.

I don’t think that it’s an earth shattering statement to say that if you’re tired and less alert the quality of what you do, whether it’s work, sports, driving or any other activity is probably poorer than when you’re awake and more alert.  This was why I never understood the concept of overtime.

What overtime does is reward a person with a premium wage for an inferior work product.

Please understand that I’m not trying to overturn the payment of overtime – merely point out one of its inherent flaws.  But I do know that if I purchased a garment and in the shirt pocket I found one of those little stickers that says “Inspected by No. 4 During Overtime Hours,” I’d probably take it back to the store and exchange it for one that was inspected during that employee’s regular work schedule.

This brings me to a news item that comes from my original home state, New York.  Apparently, PAPD, the Port Authority Police Department is not clear on the value of the services they receive when they pay their employees overtime.

One of the supervising policemen, Edwin Rivera earned in excess of $166,000 in overtime pay in 2011.  This is in addition to his base salary of $108,000 per year.  Not too shabby.  Apparently this gentleman’s services are so invaluable that he has earned over $200,000 per year for each of the last three years.  That’s not too bad for someone who is directing traffic – or more correctly, directing people who are directing traffic.

By contrast, although his base salary is less than theirs, Officer Rivera is reporting more income on his Form 1040 than either New York’s Governor or a member of the New York State Supreme Court.   If you’ve ever been tied up in a traffic jam in New York City you certainly appreciate how annoying that can be.   So I guess directing it is a pretty important job too.

Well, this led me to a thought.  If you accept my premise that overtime pay rewards poorer performance with more money; if you believe the government statistics that our unemployment rate is 8.2% (and who doesn’t believe the government), then there may be a way to get more productivity out of our workforce and at a lower cost, lowering the unemployment rate in the process.

Let’s take a mid-sized company that runs 1000 hours of overtime per week among its clerical staff.  I’m using a figure of $10 per hour as an average in this example.  I think if anything that’s probably low since I just met a young man the other day who was hired by a Strip property to switch out their one and one half million light bulbs for LED’s at a wage of $16.50 per hour.

Since we know that overtime is paid at a minimum rate of one and one half times the base wage, that employer is spending five dollars per hour times 1000 hours per week – a total for the year of nearly $300,000 when you include FICA and Medicare, etc.  Assuming a 40 hour work week, those overtime hours would allow that employer to add 12 full time people – or 25 part time people each working 20 hours per week – and get a better work product.

One of the frustrations that the OWS movement’s members have expressed is that they can’t find a job – despite having spent years getting an education.  I understand that sense of frustration.  And while doing clerical work may not be their life’s ambition, at least it would provide them with some income until things improve and a position opens up in their chosen field of endeavor.

The employer benefits by getting an improved work product at no additional cost.  Any training of the new staff should be minimal since I suspect anyone with a college degree knows how to type and file.

The new employees obviously benefit because they are now earning an income and paying their own way.

The country benefits because we would reduce the rate of unemployment thus alleviating the strain placed on the Unemployment Insurance system at both the Federal and State level.

Of course, this idea is intended solely for use in the private sector.  I suspect that if government tried to implement it, by the time all the supernumeraries were added to oversee the project, we would be further in the hole.

I wrote this post late last night after a long day taking care of things that needed to be done.  In addition, the temperature got up to 106 degrees – and I wilt rather quickly at those levels.  Heat seems to wreak havoc on the few remaining brain cells I have left.

I try in these posts to be creative and thoughtful.  Sometimes I succeed more than at other times.  So if this post is less than up to the standards I try to set for myself, I apologize to my readers.

Please understand, I wrote it on overtime.

Comments on: "OVERTIME" (9)

  1. You’re not wrong, although one thing a lot of employers (including us) look at is that it is horribly expenive to get rid of employees who don’t work out as well as difficult to find good ones. That means that employing new people comes after you are sure that you’re going have the continuing underfoot to support them.

    • Of course, you are correct. I know from my experience that despite everything I did and learned over twenty years in the search business, I was delighted if only two out of five people whom I hired made it. However, those two employees made up for the expense of the three who failed.

      But my real point in this post is that employers – if given the opportunity – can create meaningful and worthwhile jobs. Government “intervention” is truly the biggest hindrance to job recovery. Amd what we pay for in terms of government employees is contributing significantly to the bankruptcy of the nation.

      • “But my real point in this post is that employers – if given the opportunity – can create meaningful and worthwhile jobs. Government “intervention” is truly the biggest hindrance to job recovery.”

        They can (and they will) with the following caveat: If they don’t know what the future is going to bring (3-5 years for me, at least) I’m very hesitant to hire a permenant employee, a temp sure, if qualified, and they’ll get first crack at going permament.

        i firmly believe that if government had dried up and blown away in 2009, we’d be growing ant the rates of the 1920’s. The government has screwed up everything they’ve touched lately.

  2. I always looked on working overtime as part of my education and was not very concerned about being paid a penalty rate for that. It seemed to work for me because of all the overtime I worked in those beginning years I was later rewarded with the perks that come with administration at an early age.

    • Apparently overtime worked out well for you as it gave you the opportunity to acquire more exxperience in a shorter time period. So that’s a good thing in your particular case.

  3. Two more points to consider. The first is the non-payroll employer costs of adding a new employee (company participation in health insurance, for instance); the second, the employer’s sure assessment of the basic quality of the employee who may be working overtime. In my work, I’ve found many who seem brain-fogged at the end of their straight eight, and others who can work at near peak efficiency for another couple of hours.

    • Your points are well taken. My attempt in this post was to draw attention to a police supervisor who is earning more than the highest executive officer in New York State or the highest person in the Judiciary. I thought it was interesting that no one commented on this man’s salary – or the fact that the citizens of New York are paying it.

      As always, it is good to hear your thoughts.

  4. “What overtime does is reward a person with a premium wage for an inferior work product.”
    This is clearest, most honest explanation of the practice I’ve ever heard admitted. Great post!

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