Comp Time vs. Overtime Pay

Reading up on HR 1406, called the Working Families Flexibility Act.

The bill gives the employees of taking comp time instead of overtime pay for overtime hours worked, at the rate of 1.5 comp hours per hour worked. Those hours go into a pool (that cannot exceed 160 hrs), from which the employee can draw with advance notice with employer agreement--an employer can refuse if taking that paid leave would unduly disrupt business operation (uncertain how this degree of freedom compares to existing comp time policies). Unused hours must be paid back at the end of the year. Companies are forbidden from coercing employees to choose one overtime option or the other (enforcement of this could be difficult if influence is exercised indirectly).

Supporters of the bill argue that it gives working families more flexibility, similar to what is available to government employees (I was unable to find policies on government employee overtime for comparison). They argue that additional paid leave can often be more valuable to an employee than the overtime pay would be, and that the employee is not unduly restricted from taking that time.

Opponents of the bill worry about how it will be used, calling it an attack on the 40-hour work week. They say that corporations would choose to give overtime hours to employees that chose comp time so as to avoid immediate expenses (comp time amounts to an interest-free loan of one's overtime pay to the company), to the detriment of employees that chose overtime pay because they need it. They wonder if employee comp time can really be used at employee discretion in practice. And they argue that companies would pressure employees to work overtime for comp time in lieu of hiring more workers in times when more hours need to be worked.

Versions of this bill have been presented several times in the past, without success. This time the bill has passed the House and is expected to fail in the Senate. These points raise the question of whether it's just a political football being tossed back and forth for talking points before being inevitably kicked down the road.

First, is this an objective assessment, and is it missing anything? Second, do you think the bill is good for workers, companies, and/or the economy?

California's Budget Crisis and the Economic Stimulus

My father often tells me that he has only ever seen one graph in the San Jose Mercury News that concisely conveyed relevant information without distortion. The graph was in an article from the late '90s discussing California's budget deficit, and it graphed the California government's inflation-adjusted revenues and expenditures over time. The notable point to be recognized, my father would say, is that although both lines steadily increased as time passed, the line representing expenditures was consistently higher than the line representing tax revenues. California's tax revenues had increased at a rate significantly outstripping inflation, meaning that in any given year, Sacramento politicians had more real resources than the previous year--yet the government's response was simply to keep spending beyond its means. Worse, my father would tell me, California was making long-term spending commitments, out to a decade or more, based on the assumption that these trends would continue, that the tech boom was a permanent phenomenon. This article, said my father, plainly showed the seeds sown for a California crisis down the road.

Of course, I'm not saying my father was some kind of genius just because his prediction is coming true. Anyone with the same information and a basic capacity to reason could have done the same, and many probably did. Still, I have to say, this sounds a lot like what my father's been saying:

California spends far more than it takes in, despite having some of the highest taxes in the United States. It is hostile to business, and the middle class is fleeing in droves. It runs huge deficits every year, yet the Dem dominated legislature refuses to do anything effective to cut spending.

Now one in ten Californians is unemployed. Does any of this sound familiar? It should. It’s what Obama and the Democrats have in mind as a “solution” for the rest of the country.

I don't really agree with Bill Quick on that last point. The problem with California is that politicians based their spending commitments on the rose-colored glasses theory of economics. They planned based on an eternal boom, and it came back to bite them. Obama, on the other hand, knows the economy's tanking, and he's promoting spending in order to fix it. In other words, rather than being the fuel for spending (as in California), the economy is now the impetus for spending. As such, I don't think it's fair to say that Obama and the CA legislature are touting the same solution, because they've been working on different problems.

However, it is telling that when the economy was booming in California, the answer from the left was increases in social spending on education and healthcare, coupled with tightened environmental regulation under the recently established California EPA. And here is Obama's analysis of the economic crisis, taken from his recent not-State-of-the-Union speech to Congress:

The fact is, our economy did not fall into decline overnight. Nor did all of our problems begin when the housing market collapsed or the stock market sank. We have known for decades that our survival depends on finding new sources of energy. Yet we import more oil today than ever before. The cost of health care eats up more and more of our savings each year, yet we keep delaying reform. Our children will compete for jobs in a global economy that too many of our schools do not prepare them for. And though all these challenges went unsolved, we still managed to spend more money and pile up more debt, both as individuals and through our government, than ever before.

(emphasis mine)
So Obama advocates increased spending on education, healthcare and the environment as partial solutions to the crisis (even accepting the nebulous connection between the former and the latter), while California Democrats advocate increased spending on education, healthcare and the environment as something to do with cash from boom times. It's almost as if their drive for this social spending is completely indifferent to economic concerns, and all the wailing and gnashing of teeth over the economic crisis is just a means to push through the left-wing political agenda. "Never let a good crisis go to waste" and all that.

A Working Government

"The question we ask today is not whether our government is too big or too small, but whether it works."

Volokh Conspiracy's Ilya Somin writes a thoughtful post with this quotation from Obama's inauguration speech as the vehicle. Professor Somin argues that "[Government] has systematic flaws that justify a presumption against it," basically defending the virtues of small government. It's a great piece of work, and Volokh has a great comment culture, so read the whole thing. However, I think Somin passes over the fundamental problem with this statement, with only a passing reference to what I consider its biggest flaw: "Who could possibly be against government when it 'works'?"

My problem with Obama's statement is not that it has no general presumption about limiting government power, but rather that it has no general presumptions at all. The only positive declaration implied by the statement is that what "works" is important; but without any idea of what "working" is, how are we the listeners supposed to learn anything from this statement? Without any semantic content in the statement, listeners are free to attach any interpretation they want to it, making Obama into a tabula rasa for everyone's hopes and fears. Everyone's in favor of things working; the problem is that nobody can agree on how best to arrive at the "working" conclusion. Obama's statement, like many before it, expresses the obvious and skips all the controversy that comes attached.

For reference, here is the full transcript of Obama's inaugural address. The statement in question can be found on page 2.