I guess there's a conservative counter-argument on the wings that this will "cut productivity" -- Cato Institute guy touches on it a bit. You know what? Good. If what it takes to be productive is people working 65-hour weeks in order to stay "on par" in their industry, then, well, let's be more like the French -- second graph. This "certain class" of workers is people who work themselves to death to stay employed. I normally pay a good bit of attention to "conservative" economics, secondary considerations to government intervention and all that, I've read some good stuff from the Cato Institute -- but this is I guess just too far-sighted for me. Unfortunately that's a bit silly.Conservatives criticized Mr. Obama’s impending action. “There’s no such thing as a free lunch,” said Daniel Mitchell, a senior fellow with the Cato Institute, who warned that employers might cut pay or use fewer workers. “If they push through something to make a certain class of workers more expensive, something will happen to adjust.”
“I think the intent of the rule change is to make sure that people working overtime are fairly treated,” he said. “I think a potential side effect is that you may see more hiring in order to avoid overtime costs, which would be an awfully good thing right about now.”
Exactly, this is always what fails to be mentioned in these discussions. You see the same arguments made when people talk about minimum wage, as if a 30% increase in minimum wage will lead to Burger King firing 30% of its workers. They still have to sell the same number of hamburgers to the same number of customers, they won't just decide to cut production because labor prices increase.
"Fetish of full employment." More people may be employed, but total labor income share won't change. So he's right, of course, but on the whole it's not something to blindly celebrate and he should know that. What he's actually celebrating is that the meaningless unemployment rate may go down. That isn't "fairly treating" people who work overtime -- it's eliminating overtime from the equation. This is good, except for the people who needed the extra hours, whether they were getting paid more or not, to scrape by.
A lot of people don't even get straight time when working overtime hours. That's the real issue, not the thing about time and a half. Wage theft is one of the big ways that companies have been able to spike their profits so high. No one needs extra hours when they're getting paid the same regardless of whether they work 40 or 60. Total labor income will definitely change in that scenario. Maybe what we need is an profession sports league-style salary cap, where labor income is guaranteed to be a set percent of revenue. Nah, socialism only works for the wealthy :)