Dear Sir,
Morash’s article appearing online on May 20, 2016, on the Conservatives opposition to overtime pay expansion, raises some questions about the effects such rules to the economy. On May 17, 2016, the Department of Labor released a report updating the minimum salary for one to qualify for a guaranteed overtime income from $23,660 to $47,476. The right wing contested these changes claiming that it was interfering with businesses and would create rigid working hours and possible lower pay. The decision may end up hurting the business environment seriously over time.
The National Retail Foundation noted that higher overtime eligibility was a morale killer because a reclassification of over half of the employees as hourly workers is inevitable. In this regard, the employee would end up earning reduced income that would demotivate them. Srivastava and Barmola in 2011 researched on the role of motivation in higher productivity. They asserted that extrinsic motivation, such as pay served a critical role in improving the productivity of the workers. It follows that the rule may end up causing a reduction in the performance of companies.
Lower pay reduces the consumption power of the citizens due to low disposable income. It is imperative that the companies would not operate optimally due to reduced demand for goods and services. As a result, they may scale down leading to unemployment. Moreover, when workers get low pay, they do not save and invest. Consequently, economic growth would stall leading to higher rates of unemployment in extreme cases, a majority of people would not be in a position to earn a decent living forcing them to turn to crime. The need for social securities would rise to unsustainable levels. In a nutshell, the changes are just wrong.
Sincerely,
Works cited
Morash, Alex. Conservative opposition to overtime pay brought to you by the National Retail Federation. The WSJ May 20, 2016. Web. May 26, 2016. Available at <http://mediamatters.org/shows-and-publications/wall-street-journal>
National Retail Federation. 10 Ways DOL Failed on Overtime. May 17, 2016. Web. May 26, 2016. <https://nrf.com/news/10-ways-dol-failed-overtime>
Srivastava, S. K. and Barmola, Chandra, K. Role of motivation in Higher productivity. Pdf file. 2011. May 26, 2016. <https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ua ct=8&ved=0ahUKEwj12eeAnfbMAhXCNxQKHUw_CVQQFgglMAA&url=http%3A% 2F%2Fwww.inflibnet.ac.in%2Fojs%2Findex.php%2FMI%2Farticle%2Fdownload%2F9 19%2F828&usg=AFQjCNHH0g0CHZ8twwLDQaS5-JU52YNVJA&sig2=35wKMd1- EhNXN70kDPB0Lg>
