>From: Declan McCullagh <[EMAIL PROTECTED]> >Subject: FC: If you work at a California company, look out (AB60) > > >The governor of California is about to sign a particularly pernicious bill >into law. It says companies must pay their employees overtime if they work >more than an eight-hour work day. > >Obviously anyone of good conscience wants everyone to be well off as >possible. The question is, though, how best to do it? > >This soon-to-be-law's counterproductive effect: Less efficient companies or >startups already teetering on the edge of cashflow sufficiency will go out >of business. To take this a step further, we'll have higher production >costs in the near term, which means higher prices, which means people can >buy fewer California products with the same paycheck. > >In the long term? Firms have hired the number of employees necessary to >complete a certain amount of work. In the long run, employees could simply >be given a reduced salary so their inflated overtime wages will roughly >equal their old. (Actually depending on salary, the law may restrict this.) > >It means reduced privacy for individuals (though I don't see any privacy >groups complaining). California firms covered by the law will be required >to track their employees' behavior and put in a kind of time clock system >with additional record-keeping and monitoring of workers. The additional >staff-hours required to record time worked will also cost the firm more. > >It puts California firms at a competitive disadvantage compared to >companies located in other states or other countries. In no case will this >law reduce California companies' costs; it can only increase them and give >a nice boost to firms in Seattle or Boston. Again, marginal companies who >could barely survive before are history. > >It could reduce investment in California companies and cause would-be >entrepreneurs to launch their firms elsewhere. Why go through the headaches >of dealing with this bureaucratic nonsense when other jurisdictions are >happy to be home to the next yahoo.com? California's tax base would be >affected. > >It goes against the history of tech startups, where someone may be paid a >pittance but rewarded with fat stock options. Companies can no longer >employ, say, 100 people at $30,000 a year and expect 80 hours a week at the >same salary. They can't cut wages in half and hire twice as many 40-hr/wk >people because (based on my reading of the law) it sets a fairly high >minimum-wage floor for salaried employees. If you have just $3 million in >venture capital and you need those 80-hour workweeks, your company may not >exist. Oops. > >The Industrial Welfare Commission (bureaucrats really are 50s relics, >aren't they?) will decide what firms are affected or not. This would be a >perfect opportunity -- I'm not saying it will happen, just that it could >happen -- for well-connected lobbyists to try to screw over their >competitors by immunizing themselves at the expense of their rivals. Will >computer engineers be exempt but not software engineers? Who decides this? >(Talk about a perfect catalyst for lawsuits...) > >It's not that California politicos are malicious; they may even be >well-intentioned. But they clearly don't look at the long-term consequences >of their favorite pieces of legislation. If they did, they'd see that if >their goal really was to boost wages, they could just go ahead and cut >taxes. But instead they're happy pandering to the economically-illiterate. > >The text of the bill: > >http://www.leginfo.ca.gov/pub/bill/asm/ab_0051-0100/ab_60_bill_19990708_enro >lled.html > >A Wired News story on the bill: > >http://www.wired.com/news/news/politics/story/20692.html > >-Declan > > > >-------------------------------------------------------------------------- >POLITECH -- the moderated mailing list of politics and technology >To subscribe: send a message to [EMAIL PROTECTED] with this text: >subscribe politech >More information is at http://www.well.com/~declan/politech/ >--------------------------------------------------------------------------
