Americans Working More, Earning Less

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By Darrell Hutchins and Jeff Milchen
September 3, 2003

And you thought it took nerve for George Bush to don a military uniform as a stage prop.

There he was, on Labor Day in Richfield, Ohio, talking up the need to produce more manufacturing jobs in America--sporting a union jacket. "The strength of the American economy comes from hard-working men and women," Bush proclaimed.

But Mr. Bush gave no specifics of how hard and long we actually work or how little our reward compared to our peers in other wealthy nations. Americans should take note of the specifics and start speaking up about them, since the U.S. Senate could vote within days on a Department of Labor (DOL) proposal that would lead to even longer work-weeks by changing federal rules that determine conditions under which employees must be paid for overtime work.

The House approved rule changes in July, so preventing the erosion of overtime protections that we've enjoyed since passage of the 1938 Fair Labor Standards Act (FLSA) now lies with the Senate. (The FLSA also institutionalized basic labor protections like the minimum wage and limits on child labor.)

If the changes are approved, private employers would gain new power to reclassify millions of workers as salaried employees who possess no legal limits to their work weeks nor entitlement to overtime pay. Presently, most hourly-wage earners must be paid 1 ½ times their normal wage for each hour beyond 40 worked in a single week.

The proposal includes at least one positive change. Presently, only those workers making less than $250 per week must be paid overtime after 40 hours. The DOL proposal sensibly raises that pay level to $425 ($22,100 annually). The DOL claims this update would enable 1.3 million more workers to receive overtime pay, but even if their assumptions were true, the changes may remove as many or more employees from overtime coverage as it protects. Estimates range from 640,000 to 8 million.

All workers with annual earnings of $65,000 or more would become ineligible for mandatory overtime pay unless protected by a union contract, and employers could deprive millions of people earning between $22,100 and $65,000 per year of overtime pay simply by renaming their positions as "managers."

The pro-worker Economic Policy Institute estimates that more than 2.5 million salaried personnel and 5.5 million hourly workers would lose their legal right to overtime pay if Congress approves the proposed changes. The DOL proposal would accelerate the trend of Americans working more hours at lower real wages, which grew steadily from World War II until 1973, but have declined by more than 13% since.

We're also losing out on vacation time. The U.S. is alone among industrialized countries in failing to ensure a minimum number of paid vacation days, leaving us with the fewest days of annual paid leave of any wealthy nation.

The Bureau of Labor Statistics reports that, even after three years at a job, Americans average just 10.2 annual vacation days. In 2000, 20 million U.S. workers did not get a single day of paid vacation. Meanwhile, our peers abroad typically enjoy 4-6 weeks of paid leave.

Today Americans work, on average, a month longer each year than 20 years ago. During the last 30 years, work weeks have become shorter, and the number of days of paid leave increased everywhere else in the industrialized world.

Our poor position is remarkable since the U.S. ranks near the top of the list of developed nations in worker productivity. U.S. laborers have increased their output per hour by 30% since 1973. Our average hourly wage in 1998 was $12.77 instead of the $18.40 we would have received simply by sharing in the benefits of our increased productivity.

Sharing the benefits of increased productivity could have freed us to work 3 ½ day weeks or five-hour days without losing income, thus allowing us time to lead richer social and family lives and allowing many enough time away from work to actually enjoy our time on the job. Instead we're living less and working more. Why?

Unless the Senate gives more than lip service to those who earn a paycheck from private employers, millions of us will work still more hours with no compensation. Let's demand better of those who espouse the virtue of American workers and organize toward working less while living more.

Darrell Hutchins and Jeff Milchen are a volunteer and director, respectively with ReclaimDemocracy.org, a non-profit organization devoted to restoring citizen authority over corporations.

Hutchins (dhutcha1@lycos.com) writes from Conway, Arkansas, and is Associate Professor Emeritus at the University of Arkansas at Little Rock, where he worked as a physicist doing teaching and research.