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Wall Street Strategies has been providing independent stock market research since 1991 to individual, retail and institutional clients through a balanced approach to investing and trading. Charles Payne, our founder and chief analyst, is routinely sought after for his stock market, political,... More
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  • RAIDING CORPORATE COFFERS....AGAIN - By Charles Payne 0 comments
    Mar 14, 2014 10:02 AM

    President Obama continues his push to tweak free market forces and buy votes with an executive move that will force businesses to pay extra for overtime work of certain salaried employees.

    Managers earning more than $455 a week are not eligible for overtime pay, even if those "managers" are really shift supervisors at a 7-11 or fast food restaurant. The number of potential people impacted by this change is hard to quantify.

    The law governing oversight is rooted in the Fair Labor Standards Act 1938. In 1975, the Department of Labor set the minimum to $250 a week, which raised it to the current level of $455 by George Bush in 1994.

    The question is how much will President Obama hike the new level? Adjusted for inflation, the 1975 level would currently be $1,086 - that's a huge raise!

    The fact is the message will have the typical mix of envy-inducing flame throwing, suggesting entire industries are cheating people now with phony titles. Supervisors in low-paying jobs already make substantially more than the median income, but even they could be up for a raise in the near future. The most important point is, contrary to suggestions from President Obama, there are legit supervisors and managers, who make more money than their counterparts.

    It is very unlikely that they would give up their titles and extra income for overtime work that may not materialize, and even at inflated levels, match their current earnings power.

    Food Workers
    Mean Income: $21,380
    Supervisor: $33,390
    First line Supervisor $31,820
    Managers: $52,580

    Farmers
    Mean Income: $24,230
    Manager: $73,730

    Personal Care
    Mean Income: $24,550
    Supervisor: $39,760

    Ground Keeper/ Maintenance
    Mean Income: $25,670
    Supervisor: $40,500
    Supervisor Janitor + Housekeeping: $37,830
    Supervisor Groundwork: $45,000

    In addition to this being another specious exercise to smear capitalism, it is another idea that will probably result in fewer jobs and slower promotions. It is the kind of misdirect that has been the hallmark of this administration where failure is excused through a litany of excuses, or conversations changed to something irrelevant in the grand scheme of things. In this case, it's not about invading corporate income statements to support the bulging welfare state, which cannot be supported with high taxes alone; it is about the fact that the tide of prosperity isn't rising in this flaccid recovery.

    The focus should not be on fast food workers getting a bigger cut of the action, but instead making sure they and certainly their children are in a position to take advantage of higher paying jobs.
    There is an enormous skills gap in this country, because of a school system drowning in lower standards and priorities, and which puts union power ahead of teaching and preparing children. The jobless recovery can only be blamed on administration policies designed to hurt some and help others. The notion that the economic pie is fixed and therefore must be shifted around in the name of fairness, shows a lack of understanding about economics or a disdain for our economic system.

    Or both:

    I once took a creative writing course at Minot State University, and was completely discouraged when the instructor's reaction toward work that I felt subpar, was the same as his reaction to my work. Still, in a world where everyone gets an "A" or in my case that same exclamation of approval, it did not take anything from me. I have a feeling it actually did hurt the guy that got the inflated praise. In economics, that mentally hurts everyone. Rewarding mediocrity keeps people mediocre, stealing money from businesses means fewer jobs, and a war on success gets you the recovery we're plodding through right now.

    Instead of sparking the economy, America gets policies rooted in nefarious goals of class warfare and disdain for profit-motivation. The welfare society is expensive, and at this point can only be maintained through schemes that see corporate profits as part of the public domain.

    The Market

    Putin
    China
    Syria
    Venezuela
    A Missing Jumbo Jet

    Scuttlebutt about an exchange of fire, coupled with harsher rhetoric about sanctions and counter-sanctions took a toll on the market yesterday. Europe does not want a full-fledge economic war with Russia, and as it turns out, neither does Japan and many other nations. Not only is the European recovery tentative and shaky, but China's economy is slowing too fast. (It's funny that when China was sporting double-digit growth the naysayers called the numbers phony, but now that their economy is slowing rapidly those same naysayers are whining as they run for the hills.)

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