A Fox Business panel discussion about the Department of Labor (DOL) releasing new rules on federal overtime pay regulations was caught off guard when one guest correctly pointed out that low-wage employers currently enjoy unfair “corporate welfare,” which subsidizes their business model. The new DOL stipulations mandate that employers pay overtime to qualifying salaried workers who make up to $913 per week, or $47,476 per year, which Fox Business contributor Elizabeth MacDonald and Host Stuart Varney predictably claimed would “cost business” and potentially destroy jobs. Varney quickly lost control of the conversation to Barron's editor Jack Hough who praised the new rule while arguing that a lack of overtime protections amounts to letting low-wage employers “reach both hands into my pockets” to pay employees whose poverty wages force them to seek government assistance. From the May 18 edition of Fox Business' Varney & Co.:
STUART VARNEY (HOST): President Obama’s new overtime pay rules, actually, do you know that they go into effect today? What’s this going to cost business?
ELIZABETH MACDONALD: So, $12 billion over the next decade, that’s what the Labor Department says. The overtime kicks in if you make about 47,500 bucks and you work more than 40 hours a week, you will get overtime now, according to these new rules. Who does it hit? Retail, restaurant businesses, they make a lot -- create a lot of the jobs in this country. So what could happen? Will the guys who run these businesses say, “you know what, I’m going to keep my overtime the same?” Could it cost jobs?
VARNEY: Jack Hough is still here. He is making all kinds of noises because I know -- I know -- he believes in a much higher minimum wage, and more overtime pay.
JACK HOUGH: Somewhat higher. Here is where I turn into a pinko commie, as you say --
ASHLEY WEBSTER: A bed wetter.
HOUGH: A bed wetter, of course.This is not -- you are talking about this as a cost to business. Really, it’s a transfer of money from business to workers, right? The issue is, this should be a conservative cause, right? When we have all these companies that are paying workers below a living wage. What happens? The workers go and they apply for federal benefits. They get tax credits. In effect, McDonald's is reaching both hands into my pockets and taking part of its payroll cost -- that shouldn't happen. We shouldn’t have so much corporate welfare in the form of low-wage workers who have to go and collect an Earned Income Tax Credit that I pay for. Profits are at an all-time high, worker wages are low, it’s time for companies to pay their own payroll costs instead of coming to me.
MACDONALD: Interesting take.
WEBSTER: Interesting point, it’s --
VARNEY: I’ll give him that.
HOUGH: The reality is that the 20th Century, in America, the greatest sustained period of wealth creation the world has ever seen -- we had a high minimum wage, we had overtime pay.
VARNEY: That’s a very good point you raised. /p>