A collection of rambling posts about gaming, running, and politics. (and, in 2009, photography.)

Monday, November 12, 2012

Government Meddling (or 'How will the CEOs feed their families?')

Government meddling in business is nothing new.  We are all aware of recent news, mandating that employers provide healthcare coverage to employees that meet specific criteria.  Let’s take a look back at how the government has meddled in business in the past.

In 1916 the National Child Labor Committee successfully worked with Congress to pass the Keating-Owen Child Labor Act, also known as Wick’s Bill.  This statute prohibited the sale in interstate commerce of goods produced by factories that employed children under fourteen, mines that employed children under sixteen, and any facility where children under sixteen worked at night or more than eight hours daily.

The outcry was immediate, and in 1918 the US Supreme Court ruled the Act unconstitutional in Hammer v. Dagenhart.

And then all was well in the world of commerce and capitalism.

Until 1933.

Under Franklin D. Roosevelt’s New Deal, Congress passed the National Industrial Recovery Act.  One of the provisions of this act established a national minimum wage of $0.25 per hour, a 40 hour workweek, and enacted regulations for working conditions. 

Big business did not take this lying down though, and in 1935 the Supreme Court declared the act unconstitutional in Schechter Poultry Corp v. United States.

Once again, the invisible hand was allowed to regulate things, and government was told No! when it comes to deciding what is right and good for capitalism.

But FDR wasn’t finished.  In 1938 the Fair Labor Standards Act was passed, which brought back a national minimum wage of $0.25 per hour ($3.77 in 2007 dollars), a 40 hour work week, allowance for overtime paid at 1.5 times the normal rate of pay, and prohibited children under 16 from working.

But business did not consider the matter to be settled.  In 1946 the case of Anderson v. Mt. Clemens Pottery Co. reached the Supreme Court.  Employees were not being paid for their time preparing their workplaces (walking to their station, turning on equipment, donning special clothing, and so on).  The Supreme Court upheld the Act, forcing employers to pay their employees “portal to portal”.

And now here we are in 2012.  Once again, government is dictating how employers treat their employees.  And some employers are doing the only thing they can do: reducing employee hours to dodge the requirement, or simply passing the increased cost on to their customers.

Some regard healthcare coverage as a basic employee right, similar to a safe and harassment free workplace, or to a minimum wage.  Others see healthcare more as a luxury.  For a low wage or minimum wage worker, it must be reassuring to know that if they are injured or become ill, not only are they likely to miss out on work and pay at their job, they could even be fired.  That on top of massive medical bills well beyond their ability to pay, on account of their low wage job, and lack of healthcare coverage.  For someone working to support a family, it must be reassuring to know that the job creators, the people at the very top of the capitalism food chain, are not taking a hit in their pocket book.  For a CEO with a luxury mansion and a private fleet of automobiles, suffering any loss in profits is absolutely devastating.  I mean, how would they support their family?