With Nevada’s Democratic takeover of the Legislature, the chances of thousands of Nevadans receiving a raise are higher than before. While a minimum wage is generally beneficial to the economy, there is another factor in the wage debate that needs to be examined.
Nevada is a part of an elite group of four states that pays overtime on a daily basis. In Nevada, a worker must be paid overtime if they are working longer than 8 hours in a 24 hour period. The period starts from the beginning of the first shift. So, if someone works 8 hours at 5 p.m. and then another four at 1 p.m. the next day, then those four hours would be paid as overtime. I know this well, because I, admittedly undeservedly, have made a boat-load of cash because of it. This law actually played a big role in the minimum wage debate two years ago.
As Ross Miller and Kate Marshall would like to forget (congratulations if you are one of the 38 people who get this), 2014 was an extremely Republican year in Nevada. Every statewide office, three House seats, and the State Legislature all went Republican. It was as if Gov. Sandoval tripped and spilled strawberry syrup over everything, again. (Man, is that guy clumsy with ice cream toppings.) Despite that, there was a bill that would have raised the minimum wage to $9. If the bill passed, overtime would be paid only for anything worked over ten hours in an eighteen hour period. So, in the above scenario, the second shift wouldn’t be paid as overtime. That bill came close, only missing passage by one vote in the Assembly.
If either the Senate’s $12/hr bill or the Assembly’s $15/hr bill is successful, expect a change in the overtime laws, as it should be.
It is ludicrous to think that Nevada should have a high minimum wage and generous daily overtime laws as well. It is comparable to having Lady Gaga not only fill in for Beyonce at Coachella, but Secretary of Defense Gen. James Mattis as well. You have to make decisions and have it both ways. (Let’s be honest, wouldn’t Secretary of Defense Gaga be awesome? Just imagine the uniforms.) We need to lighten our overtime laws if we want to secure a higher minimum wage and economic growth.
Why? If employers are going to be forced to pay their employees higher wages with the overtime restrictions in place, there will be an extreme disincentive to have workers work long hours in fewer days. Normally, that’s a good thing, you want your workers to be rested, but there will be times when working longer hours in fewer days is needed. An example would be the weekend after Thanksgiving, one of the busiest shopping times of the year. It’s also relatively short, only four days. Needless to say, many people work longer hours during that weekend and rack up overtime as customers rack up a credit card bill and I rack up the cheeseburgers.
If the minimum wage skyrockets, then overtime could prove to be crippling. $12/hr becomes $18/hr, $14 become $21,and so on. If a retailer has to pay each worker around $20/hr to work overtime, then they are going to be inclined to keep staffing at a minimum. Smaller staffing that would result from a high minimum wage and generous daily overtime would have dangerous effects on the economy.
First, if staffing is decreased and business stays the same, the pressure will increase on the employees to perform their jobs faster. After a while, the pressure builds and people will crack under the stress. With stressed employees, their ability to provide good service crashes. If customers don’t receive good service, they stop going to businesses with stressed employees. If customers stop going to a business, sales fall and layoffs occur. Layoffs occur and people stop spending, which sends us into recession. So, if the minimum wage rises and our overtime laws stay the same, it will only be a matter of time before we see an economic downturn.
Now, nobody gets everything they want in politics. If they do, then they are easily satisfied. If they are easily satisfied, then I would like to introduce them to a friend of mine. A higher minimum wage increase would be good for Nevada, but we must ease burdens on employers. Daily overtime is the right place to start. Those serious about continued economic growth must confront this reality and accept the costs.