News Tip: New Overtime Rules Could Mean Short-Term Boost, Long-Term Pain, Economist Says

The federal Labor Department has announced a new rule extending overtime protections to millions of workers. Under the new rule, salaried workers earning less than $47,476 will be entitled to overtime pay. •    Quotes:

"The new overtime regulation will provide a short-term boost for middle-class workers who haven’t enjoyed meaningful wage growth over the past decade," said Ryan McDevitt, an assistant professor of economics at Duke University’s Fuqua School of Business. •    "Many businesses, however, will experience a hit to their productivity from these new rules, as they now have to pay more for the same amount of work. Longer term, businesses will respond to higher overtime pay by cutting back on these types of workers, either finding ways to limit hours, automate tasks or outsource jobs entirely. •    "I foresee younger, less-skilled workers faring the worst under this plan, because they often compensate for their lack of training by working longer hours to get the job done. Now that kind of on-the-job training will be too costly for businesses."•    Bio:

Ryan McDevitt is an economics professor at Duke’s Fuqua School of Business, with research specializing in industrial organization and consumer behavior.http://www.fuqua.duke.edu/faculty_directory_members/McDevitt•    For additional comment, contact McDevitt at: ryan.mcdevitt@duke.edu