Whatever Happened to Overtime?
politico.com
politico.com
None of my friends are average.
The odds are very good that, if you are reading HN, you are not an average person either.
Please take that into consideration when discussing economic measures meant to improve the lives of the middle class. You are probably better educated, earn more, work in a less physically strenuous job, have better employment prospects, are more likely to start a company, have more respect from your management, and are more likely to leave a job in order to be happier.
Now put yourself in the position of most people, which are all the opposites of the above: if you have a job, you are desperate not to lose it, because you are less likely to get another one. You don't have the financial resources to give up paychecks for a couple of months while you look for another job. Your company considers you an interchangeable, entirely replaceable cog.
Have some empathy, people.
But that comfort could fade very quickly, given a few scant months of unemployment.
[0]: http://www.census.gov/hhes/www/cpstables/032011/perinc/new01...
[1]: http://www.bls.gov/ooh/computer-and-information-technology/s...
Anyone with a computer, an Internet connection, and the gumption to do so, can send a product to market.
The shareholders and board, primarily.
>What class do I fall in to if my income is below average yet I have significant stock holdings?
Well, you're implying that you have to work for a living or starve, so you're working-class.
>Anyone with a computer, an Internet connection, and the gumption to do so, can send a product to market.
And yet only roughly 0.1% of the population actually lives off anything other than wages.
If you look at households, that percentage is much lower - at $150,000 they're in the 90.1%; at $100,000 a household (aka an individual earner living alone or as the sole earner in a household) is in the 77.4% [1].
> If that's the middle class, then what does that make the other 93%, who are worse off?
You've introduced a false dichotomy here. Just because an individual in the 93% (by your own figures) or a household in the 77.4% (by the ACS figures) is considered middle class doesn't mean that someone in the 57.5% (~$50,000) isn't also middle class. These things aren't linearly distributed.
On the other hand, it's pretty evident that neither one is upper class. But that depends on the definition of upper class, no?
What is your definition of upper class? Sheer income percentile, or what an individual can actually accomplish at a given income percentile?
General usage has upper class being those who can afford not to work if they so choose; those who not only are rich themselves, but whose families have been rich for several generations. They send their children to private schools with a higher tuition than a State university; they probably own more than one home. I don't know any SWE that can claim that unless they were born to it or got in just after (or before) the first round of investment at a unicorn like Google or Instagram.
"Upper middle class" is a pretty apt term, and usually reserved for those in professions like software development (surprise!), mechanical engineering, architecture, managerial, etc. Those under this label are usually comfortable, can easily afford to own their own home, and - in comparison to the creature comforts available - better off than royalty from two hundred years ago.
But in comparison to the creature comforts of those just 1-2% above them, they're paupers. And those in the 95% are, to those in the top 1% (generally considered the cutoff for Upper Class), simply one head of chattel among the unwashed, hepatitis ridden, gout prone proletariat.
0. http://factfinder.census.gov/faces/tableservices/jsf/pages/p... 1. http://factfinder.census.gov/faces/tableservices/jsf/pages/p...
A friend of mine once shared learnings from a university class that talked about markers of each class.
Lower class can be marked by immediate gratification (sometimes out of need): Buying a bag of chips and soda because you need calories now, spend that tax refund on a TV because you want something to make yourself feel better and you "know" the end of your poverty/pain isnt ever coming, better to spend today than wait for a broken promise to come true.
One of the middle class markers is deferral of gratification for greater future gratification: buying a home instead of renting forever, going to school to eventually make more money, buying a jumbo pack of toilet paper today to save 12c a roll for the next year.
The upper class marker is that of unlimited gratification and a separate economic; You can have anything you (reasonably) could want and the basis of your life is not monetary/material but more about economic power, political influence, access to inaccessible people and places. Examples might be anything that is actually "exclusive" (as opposed to the marketing term applied to everything), relating to and breeding with people at or above your ranks and, various markers of your importance in this world to show off to others (Awards, recognitions, philanthropy) ...
And Upper class quite often go for a shabby look and can actually be quite poor
And if the poor Americans suddenly started behaving like responsible Indians, they would become middle class?
I used to be an IT auditor. I worked in public accounting. The CPAs who really crushed it were partners. They usually had been with the firm for 10+ years minimum, and were basically in sales at that point. You have to buy into the company normally when you make partner, and less than 10% of employees ever make partner.
MDs, yes they're high earners, but many go into a ton of debt, and don't start earning a lot till pretty late in their career. Many blow through all their cash too.
Lawyers, yes obviously some make bank. But many make next to nothing. I have tons of friends who are just graduating and can't find work.
As a developer, I can clear 100K a year working remotely in a very affordable state. And I have no debt. That's a pretty good living. On top of that, I love what I do. Note that I don't have kids though.
The only concern I have about software development is that it seems to plateau around 100-150K a year. I guess that makes sense though. You'd have to go into management to make more, and you wouldn't be writing much code, which is what I like to do.
Anyways, I wouldn't call a good developer making a reasonable developer salary lower middle class.
However, from a management perspective, unpaid overtime is great. It lets you be lazy in your management. You have no incentive to help an employee finish their tasks in 40 hours when you know they are going to stay 55 hours to complete it by brute force.
If you assign a cost to those overtime hours, the manager now has an incentive to actively participate in your workstream by coaching or seeking efficiences to get you home in 40 hours. And you have the incentive to do likewise since your overtime hours now represent an additional cost to your employer. It will transform overtime from a badge of honor into a topic to be avoided unless truly necessary. It will no longer be the norm.
We can discuss the virtues and detriments of labor unions at length, but they seemed to at least serve as a mechanism of protecting the worker from themselves (i.e. by placing a cap on hours worked, you could not stand out by putting in more time than everyone else).
We as a society need to decide if we want to prioritize time incurred in the workplace, or if we want to judge worker quality off of other behaviors. If we want to de-emphasize time incurred, adding incremental cost to overtime hours would be a useful tool.
I'm not saying you're wrong. I'm just saying that there are two sides to incentives and it's not obvious that one side is more important than the other.
If you consistently can't meet deadlines and your boss isn't helping then people lose jobs.
There's - always - some variant of these laws, and all states have people who can abuse it.
For many jobs though, over time should be there, because many jobs have only a finite amount of output achievable by a human being.
You might be correct that the best way to balance the competing incentives is to require overtime pay but not at a higher rate.
Also overtime does not mean that you can just stay late at work whenever you want and bill your employer. Overtime is for when the company tells an an employee that the employee has to stay late to finish an assignment. Then the employee is compensated for staying late, rather than being told they have to stay late and having to just deal with it.
the posties used to put some of the post posted on Friday to make sure that there was OT avable on Saturday.
And even in professional jobs I have seen some sketchy practices ie DBA's being on call 4 in 4 and getting called maybe twice a year BTW the rate was $600+ per week plus toil at OT rates
Those of us working, don't really want the overtime because we'd like to go home at night and are usually brain dead by the time 7pm hits.
Really, it works for everyone involved. The company has happier, healthier, and more productive employees, and the employees get paid for all of their work. The only downside is that when doing pre-production, estimates are usually on the higher side to avoid going over the time budget.
That first hour of overtime isn't "just an hour," it's a whole eighth of that day's "leftover" waking time. Four hours of overtime is half of those hours left after getting a night's sleep, which cuts deeply into the limited windows of time people have for family and friends.
Beyond that, "unpaid" overtime is worse than that. The costs in productivity losses, health damage, and mental imbalance are still paid, just by the employee and society at large. Expecting IT workers to work 60-80 hours equates to dumping economic and psychological "toxin" into the local water supply. The employers don't mind, because they're buying bottled water with the profits. In short, we need an "Employment EPA."
This trend is getting common even here in India. In fact its already everywhere. My father routinely points out to me how ridiculous it has gotten. Back in his day(He was a bus driver, now a cab driver), you would be called to clock overtime anytime a fellow driver was on leave, sick or just absent due to same reason. And they would get paid handsomely for it. In fact overtime pay was the whole thing behind 'Work hard, get rich'.
When I started my career in Software, and I would routinely do late nighters and weekends. He used to be surprised we were ready to do so much work for free. Ideally you could argue that a bus driver and a programmer have very different kinds of jobs, but then it the same vein programmers should get paid proportional to what impact their work has, but that doesn't happen either.
I think the employers are having the best time in history. Which so many people ready to so much work for free, what else could you ask for?
He really has nothing to lose, fixing the overtime rules would be a great step in restoring faith in the system; but I think 69k is aiming far too low. People should be allowed to work overtime, not be forced into it. Hence I am suggesting he aim really high, like the Roth income level cutoff. It already is a declaration of the government as the line between too well off to deserve the tax benefit.
I am not dismissing the premise, just suggesting that there is far more complexity and shades of gray involved.
As for the law on the topic, the author may be correct that the President acting alone can use executive authority under established law to let the income threshold for mandatory overtime pay rise. I haven't checked whether or not that is entirely in the hands of the President under current United States law. If so, then the only politics around the issue would be the politics of what an incumbent President already in the second half of his second term (a "lame duck" President) thinks is an appropriate response to this issue among all the other issues he is dealing with.
What I don't know here for sure is how much any of this would matter economically to most people. Neither my wife nor I are employees of anyone (we both work as sole-proprietor business owners). We can work as many hours as we can stay awake without gaining overtime pay. What I hear about more often in the United States economy than employed wage-earners not being paid overtime is employed wage-earners not being offered even full-time hours, because shorter hours remove a requirement to provide employee health insurance benefits for many employers. I'm not at all sure what the author advocates here would have a big beneficial effect for the economy in general or for workers now working overtime in particular. Demand for labor working under any particular schedule is elastic, and maybe the proposal here will just result in fewer working hours being offered per employee.
The author does a poor job explaining the macro-economic effects. You get a glimpse of the reasoning in the last few lines, where he states that the ratio of corporate profits over GDP doubled, from 6% to 12% of GDP from pre-80s to nowadays.
We[1] have a problem with wealth distribution. I don't draw this problem in terms of fairness, because the concept of fairness is different from an individual to the next. We have a problem of income distribution that goes beyond the notion of fairness, becoming serious enough to be a menace to the stability of capitalism.
A balanced economy has a thriving consumption component, which creates demand, and a thriving investment component, which drives supply. These go hand in hand. If there is too much demand, and investment falters, you get high inflation economies. However, if you get too much investment and demand falters, you suddenly have no investment opportunities and you get a slew of ill effects as capital is trying to find out where it can get returns. The most visible such effect is the appearance of investment bubbles and the crashes when these burst.
People easily recognize the problems of investment-starved economies. The common citizen does not recognize the problems of demand-starved economies, because these are new.
Here, we can witness first hand how young economic science is. Inflationary effects on supply starved economies were the norm in the XX century, so these are very well studied. Demand starved economies? Not so much. The US and the EU are the first ones (possibly, in a slightly different fashion, preceded by Japan).
The causes for this do not lay squarely on politicians. It's easy to take a passionate view and find a target to blame. That is not the case, however.
The current demand starved economy is caused by a big mix of factors. I've never ran the numbers, so take my opinion with a grain of salt: I'd wager the two biggest factors are:
1. Technological evolution, which increases demand while causing a deflation of costs (and consequently, on the circulation speed of money)
2. Globalization. We have moved a great deal of added value to developing countries, namely in the East. If Japan can be used as an example of what to expect, it will take two generations for demand to occur there.
The globalization question is specially problematic. Not because there aren't enough resources for everyone. It is problematic because China is huge. The delay in consumption increase, coupled with huge inertia, can destroy western economies.
The technological question is important, but it has been with us ever since the industrial revolution. We have been able to cope with it, and the same methods should apply.
[1] I'm European. We are, however, in the same boat as North Americans in this problem, with slightly worse politicians. Europe is politically led by Germany. Historically, Germany is prone to fear investment starved economies so they are profoundly erring on identifying the issues and correctly acting).
That's the last few lines of the first of three pages. I made the same mistake at first.
What really helps is being able to capture new efficiencies uncovered by innovation.
IMO the best ways to break these cycles is to try and buy things from people poorer than you and to try and own as much of the economy as you can. The middle class could buy up much of the economy with little effort-- If 100m people spent ~$3k each they could buy walmart instead of outfitting a home theatre with 60" tv, ps4, accessories and a couch. There'd be some amazing change in america if this kind of thing started to happen.
Of course its like all changes though, its hard to get the masses to do anything in unison.
Does anyone know what proponents of stock buybacks would say in response to his arguments? Given the downsides, why is it appropriate/fair/legitimate?
As someone in the States, that arbitrary cut-off drives me nuts. I would much rather have scaled benefits, all derived from formulas.
Many jobs in the modern economy are flexible. You do your work whenever. Maybe you carve out six hours a day to program but if you need to take a client call or answer an email out of hours you do it and you don't feel bad because you can goof off during the day when you like to as long as the work gets done.
Tracking this would be ridiculous and most employers will actually remove that flexibility in order to make sure that they comply with the law. People who like flexibility will lose and so will the economy. We'll become much less responsive.
This is completely false (in CA, at least). If I work 1 hour on Monday, say, and 12 on Tuesday, I'm paid for 8 hours for each day.
In fact, my company works like this. I don't often work less than 8 hours, but it happens. Accounting knows how to handle it, and does like a pro.
I've never been hassled.
That aside, the structure of the law and the practice of companies that are supposed to abide by it don't necessarily coincide. Generally even in labor-friendly states employers hold almost all the power and are unlikely to face any serious threat (e.g. via a lawsuit) from employees who challenge illegal labor practices like failing to pay for a full week in which any work is performed. They're especially unlikely to do so in the software industry, which as far as I can tell has a surplus of labor supply who: a) view themselves as Jon Galt or b) are all too eager to "prove" how great they are compared to other "devs" by, e.g., submitting themselves to onerous employment practices or c) believe, wrongly, that the entire industry is based on merit (intellectual, ability-based merit) and that "unfair" labor practices just can't happen to them (because they're so awesome) or d) some combination of all of that. These things have all conspired to help employers depress wages and maintain the completely farcical myth that "getting paid less for doing what you love" is fair.
This seems to have some very positive "work life" balancing effects - it motivates engineers to learn things at a deeper level and develop solutions that cut down on inefficiency. It also encourages people to invest thought into solutions and proposals, as opposed to micromanaging how every hour of a project will get spent.
I think its also more fair to clients, too. Inevitably new things take longer the first couple times you do them, and traditionally the full cost of that learning period gets passed on to the client in one way or another. However, something that took two days to put together and figure out the first time may only take two hours to implement the next time - but it's hardly fair that Client B is only billed 2 hours and Client A is billed 16, simply because they were first to market with something.
If I'm taking client emails outside of office hours it's because I'm on call. If I'm on call I'm getting paid for it. Simple as that.
Here's the problem. In my previous job as a programmer (video game development) we were given more work than was possible in the usual working hours. So we had to do work additional hours (unpaid) to catchup - which was pretty much constant throughout a project. This meant my employer was getting work done for free.
Honestly the additional hours nearly made me quit full-time employment. I felt stressed all the time, and took it out on my friends and family.
Never again.
Now I work for the government and get full overtime pay. All is well :)
Traditionally, a salary was like a retainer... You get paid for 35-40 hours a week, and have that commitment as the work waxed and waned. Hourly workers only work when there is work.
Overtime had everything to do with the type of worker you were, not the way you were paid. For example, a policeman is paid on an annual salary basis, but is eligible for overtime is needed.
In recent years, political and legal efforts have watered down the bite of the depression era regulations. (This helped fuel the economic tranformation of the South) So now a department "lead" at a store like WalMart making someone like $10/hour can be classed as a exempt employee in many states.
I first discovered this at a previous employer, where all of the help desk staff were "supervisors". Some schlub on a phone all day could easily see a 30% dilution of their hourly wage due to mandated, unpaid overtime. That was a real political awakening for me!
These laws exist to discourage employers from abusing overtime and reducing hiring. The "efficiency" of some über productive sap working 80 hours a week means that 1-3 other people don't have a job.
Right, but this isn't some law of nature. It's something that some people have decided. So we can ask what are the consequences of this belief? What are the ways in which it can be abused? Who does it benefit?
For a limiting case, consider a job that needs to be done by the end of the day. No one on Earth can do it in less than 25 hours. Is it reasonable to expect the work to be done in a day?
In reality, the issue is that no one is exactly sure how long knowledge work will take, so employers and managers will tend to push for more work to be done in less time, and employees can't definitively say "no, that's unreasonable / impossible."
The problem with this mentality is that it doesn't sufficiently penalize managers for being bad at project management. If I'm your manager, I can do a terrible job of managing you, the project, and/or the company but I still have this fantastic way out -- I can just demand that you do what's necessary to make it work.
This is a huge moral hazard, and a broken feed-back loop. It's endemic in software and small owner-run companies.
If both parties trust one another, then it takes as long as it takes, and how to manage that is just an ordinary discussion. More people? Clear roadblock? Redefine requirements? Whatever.
Where there isn't trust, the salary position often gets abused.
In my experience, there are many managers who when confronted with their own performance shortcomings will tend to pull rank and resort to authority. Once this happens, there's no trust from the employee. I.e. as a manager, you can be arbitrarily bad at your job and my only recourse is to find a new manager or to leave the company. I accept that that's the way the world works, but it shows that true trust is difficult to maintain when one party has more power than the other, and a tendency to use it without consequences.
But we're talking about a national level. To go back to the current top voted comment in this thread - we need to put this into perspective. I think a more accurate statement would read "More high end tech jobs are becoming flexible."
I'm in the same boat you are - I have the luxury of working from home and the mentality is basically as long as i'm meeting a certain number of billable hours per week, nobody really cares about the mundane details of when the work is getting done.
However, one thing I have noticed in the tech industry is that there are a lot of unwritten expectations on both employees and employers. A very common one is what you cited - "Get the job done if it takes 40 or 60 hours". And thats reasonable in my opinion, given competition in the US and the need to deliver projects on time.
But there are Employer commitments made as part of that, too, which are rarely fulfilled. Every company i've worked for in the past 10 years has had some type of policy around bonuses. And every year, measures outside of my control dictate the terms of those. Whether its the economy, stock price, or sales performance (I have nothing to do with sales) there's a different excuse every year, and the payout is laughable compared to the level of bonuses senior management get.
So it seems like we've got a situation where people "Go the extra mile", "Play on the A Team", or otherwise make personal sacrifices to help an employer, whereas employers regularly remit on the obligations they've set to their employees.
US: http://www.dol.gov/whd/flsa/ Canada: http://www.labour.gov.on.ca/english/es/pubs/guide/overtime.p...
Not all computer and technology related jobs are exempt. As I read it, the exemption focuses on employees that are primarily creating hardware and/or software.
Regulation, collusion, and asymmetric information all seem to be "distortions" we're dealing with today; "The market pays what the market allows" seems to be an oversimplification as we're not operating in a free market.
But the president doesn't have control over the budget - Congress does. Raising pay without having the money to write the checks isn't really an option.
And unless Congress wants to cut other government services, that extra money needs to come from somewhere, so this would just be a transfer of wealth from non-federal workers (whose taxes would be raised) to federal workers. Taxing the rich corporations to pay for this isn't easy either - they can afford armies of lobbyists to fight against higher taxes (and they'll be the ones making the big campaign contributions in the upcoming elections).
Almost all developers work their nominal work hours. A few work a little more on their own choice. There is no pressure to do so, but it's also not frowned upon (unless it's obvious that there's some cultural misunderstandings going on, e.g. in the case of someone moving in from a non-scandinavian work culture, perhaps thinking that they really, really have to prove themselves by working hard to get to stay.)
At crunch time sometimes key people get asked/ordered to work paid overtime (each overtime hour ends up something like 2x a normal hour, I forgot the exact constant). Estimate max 50 overtime hours/person/year, and not every year. There is some sort of social pressure that makes you feel bad when ordering this overtime....
Senior managers tend to work more hours, but they are also better compensated.
Most companies I have dealt with in the past (in Quebec/Canada) usually compensated with 1.5h of vacation time for each hour of overtime. A normal work week is 37.5h, and overtime starts at 40h, so you have a bit of leg room. It's a good way to avoid systemic overtime and bad management.
As long as there are unemployed, there people to hire at bottom dollar.
Thanks for sharing your enlightenment.