Beat the Press

Beat the press por Dean Baker

Beat the Press is Dean Baker's commentary on economic reporting. He is a Senior Economist at the Center for Economic and Policy Research (CEPR). To never miss a post, subscribe to a weekly email roundup of Beat the Press. Please also consider supporting the blog on Patreon.

Last week, Representative Peter DeFazio reintroduced his financial transactions tax (FTT) proposal. The bill would impose a tax 0.03 percent on trades of stock, bonds, options, and other derivative instruments. (That's 3 cents on $100 of trades.) This can be thought of as the equivalent of a sales tax imposed on financial transactions, which are now largely untaxed. According to the Joint Tax Committee, this tax would raise roughly $400 billion over a 10-year budget horizon. This translates into 0.2 percent of GDP. That would cover about 60 percent of the annual food stamp budget. The tax would also dampen speculative trading on Wall Street. Many trades that involve flipping assets in a matter of minutes or even seconds would become unprofitable with even this small tax. This could make financial markets more stable. But the really neat aspect of this tax is that it all comes out of the hide of Wall Street, rather than ordinary investors. Considerable research shows that trading volume declines roughly in proportion to the increase in trading costs. This means that if the DeFazio proposal would raise trading costs by one-third, then trading volume would fall by roughly one-third. Investors will pay one third more on each trade, but they will carry out one-third fewer trades. This means their total cost of trading with the tax will be no larger than it was without the tax. (The Tax Policy Center of the Urban Institute and the Brooking Institution actually assumed that trading volume fall by 25 percent more than the percentage increase in trading costs, meaning that total trading costs would fall as a result of the tax.)
Last week, Representative Peter DeFazio reintroduced his financial transactions tax (FTT) proposal. The bill would impose a tax 0.03 percent on trades of stock, bonds, options, and other derivative instruments. (That's 3 cents on $100 of trades.) This can be thought of as the equivalent of a sales tax imposed on financial transactions, which are now largely untaxed. According to the Joint Tax Committee, this tax would raise roughly $400 billion over a 10-year budget horizon. This translates into 0.2 percent of GDP. That would cover about 60 percent of the annual food stamp budget. The tax would also dampen speculative trading on Wall Street. Many trades that involve flipping assets in a matter of minutes or even seconds would become unprofitable with even this small tax. This could make financial markets more stable. But the really neat aspect of this tax is that it all comes out of the hide of Wall Street, rather than ordinary investors. Considerable research shows that trading volume declines roughly in proportion to the increase in trading costs. This means that if the DeFazio proposal would raise trading costs by one-third, then trading volume would fall by roughly one-third. Investors will pay one third more on each trade, but they will carry out one-third fewer trades. This means their total cost of trading with the tax will be no larger than it was without the tax. (The Tax Policy Center of the Urban Institute and the Brooking Institution actually assumed that trading volume fall by 25 percent more than the percentage increase in trading costs, meaning that total trading costs would fall as a result of the tax.)

The Washington Post has long pushed the view that a dollar (or euro) that is in the pocket of a middle-class person is a dollar that should be in the pockets of the rich. (They are okay with crumbs for the poor.) In keeping with this position, in its lead editorial today the Post complained about the “sclerotic statism” of the French economy. It then called for increasing employment, “through reforms of the labor code, not by protectionism or restriction of immigration.”

It is worth bringing a little bit of data to the fact free zone of the Washington Post opinion pages. France actually has consistently had a higher employment rate for its prime-age workers (ages 25 to 54) than the United States.

Book2 16029 image001

Source: OECD.

As can be seen, the employment rate for prime-age workers in France was roughly 2 percentage points higher in 2003. The gap expanded to almost 7 percentage points following the downturn, but it has in more recent years narrowed again to just under 2 percentage points.

France does have much lower employment rates among younger and older workers than the United States, but this is due to policy choices. College is largely free in France and students get stipends from the government. Therefore, many fewer young people work. France also makes it much easier for people to retire in their early sixties than in the United States, with largely free health care and earlier pensions. The merits of these policies can be debated, but they are not evidence of a sclerotic economy.

It is also not clear that the Washington Post’s desire to weaken protections for workers (euphemistically described as “reforms of the labor code”) will have a significant effect in reducing unemployment or raising employment. Extensive research has shown there is little relationship between worker protections and employment. It is also worth noting that the Post denounced protectionism in this editorial, but it is fine with protectionism in the form of ever longer and stronger copyright and patent protection, which benefit people it likes.

The most obvious reason that France’s employment rates have not returned to pre-recession levels is the austerity demanded by Germany, which it is able to impose on France through its control of the euro. There is little reason to believe that if France were able to spend another 1–2 percent of its GDP on infrastructure, training, and other forms of public investment, its economy and employment would not expand.

The Post is of course a big fan of austerity. Rather than acknowledging that a lack of demand is the main factor keeping workers from being employed, it would rather blame the workers for lacking the right skills.

The Washington Post has long pushed the view that a dollar (or euro) that is in the pocket of a middle-class person is a dollar that should be in the pockets of the rich. (They are okay with crumbs for the poor.) In keeping with this position, in its lead editorial today the Post complained about the “sclerotic statism” of the French economy. It then called for increasing employment, “through reforms of the labor code, not by protectionism or restriction of immigration.”

It is worth bringing a little bit of data to the fact free zone of the Washington Post opinion pages. France actually has consistently had a higher employment rate for its prime-age workers (ages 25 to 54) than the United States.

Book2 16029 image001

Source: OECD.

As can be seen, the employment rate for prime-age workers in France was roughly 2 percentage points higher in 2003. The gap expanded to almost 7 percentage points following the downturn, but it has in more recent years narrowed again to just under 2 percentage points.

France does have much lower employment rates among younger and older workers than the United States, but this is due to policy choices. College is largely free in France and students get stipends from the government. Therefore, many fewer young people work. France also makes it much easier for people to retire in their early sixties than in the United States, with largely free health care and earlier pensions. The merits of these policies can be debated, but they are not evidence of a sclerotic economy.

It is also not clear that the Washington Post’s desire to weaken protections for workers (euphemistically described as “reforms of the labor code”) will have a significant effect in reducing unemployment or raising employment. Extensive research has shown there is little relationship between worker protections and employment. It is also worth noting that the Post denounced protectionism in this editorial, but it is fine with protectionism in the form of ever longer and stronger copyright and patent protection, which benefit people it likes.

The most obvious reason that France’s employment rates have not returned to pre-recession levels is the austerity demanded by Germany, which it is able to impose on France through its control of the euro. There is little reason to believe that if France were able to spend another 1–2 percent of its GDP on infrastructure, training, and other forms of public investment, its economy and employment would not expand.

The Post is of course a big fan of austerity. Rather than acknowledging that a lack of demand is the main factor keeping workers from being employed, it would rather blame the workers for lacking the right skills.

Actually, the article told people that he wanted to spend 50 billion euros. Is that big for the French economy? Would it matter if it were over one year or ten years?

Apparently, the NYT doesn’t think so, since the article never tells people how long a period is covered by the proposal. For those who might care about such trivia, the proposal is for a five-year period, putting it at roughly 10 billion euros a year. Since France’s GDP is projected to average roughly 2.5 trillion euros annually over this period, the proposal would cost approximately 0.4 percent of GDP.

Is this really that hard?

Is there some reason that a reporter covering the French presidential elections can’t tell us the number of years involved in a spending program? It does make a difference.

How about some information, like the share of GDP, that would put the measure in a context that would be meaningful to NYT readers. I know the paper has a well-educated readership, but I am willing to bet that fewer than one in ten could tell you France’s GDP within a 25 percent margin of error.

None of this should be controversial. When she was the NYT’s Public Editor, Margaret Sullivan wrote a very nice column on exactly this point. She got then Washington editor David Leonhardt to strongly agree with her.

What’s the problem here? The newspaper is supposed to be providing its readers with information. Providing a large number without any context is not providing information.

Actually, the article told people that he wanted to spend 50 billion euros. Is that big for the French economy? Would it matter if it were over one year or ten years?

Apparently, the NYT doesn’t think so, since the article never tells people how long a period is covered by the proposal. For those who might care about such trivia, the proposal is for a five-year period, putting it at roughly 10 billion euros a year. Since France’s GDP is projected to average roughly 2.5 trillion euros annually over this period, the proposal would cost approximately 0.4 percent of GDP.

Is this really that hard?

Is there some reason that a reporter covering the French presidential elections can’t tell us the number of years involved in a spending program? It does make a difference.

How about some information, like the share of GDP, that would put the measure in a context that would be meaningful to NYT readers. I know the paper has a well-educated readership, but I am willing to bet that fewer than one in ten could tell you France’s GDP within a 25 percent margin of error.

None of this should be controversial. When she was the NYT’s Public Editor, Margaret Sullivan wrote a very nice column on exactly this point. She got then Washington editor David Leonhardt to strongly agree with her.

What’s the problem here? The newspaper is supposed to be providing its readers with information. Providing a large number without any context is not providing information.

Susan Dynarksi had a very good piece in the NYT Upshot section on several measures from the Trump administration which will allow the financial industry to collect larger fees from student loans. However, the piece errs in describing the changes as being “deregulation.” Rather these changes are ways in which the government is deliberately choosing not to enforce contracts in ways that increase corporate profits at the expense of student borrowers.

Suppose that the government announced that it was going to stop making efforts to verify income among people applying for food stamps. In fact, suppose it decided to no longer even verify the number of children an applicant was claiming. Would anyone consider this move “deregulation?”

This is comparable to what the government is doing in reference to the firms involved in the student loan repayment process. The purpose of the loans is make it easier for kids from low- and middle-income families to attend college. The government is supposed to design contracts that fill this purpose at the lowest cost to both the government and the students.

The measures being taken by the Trump administration are not likely to lower costs for the government and are almost certainly going to raise them for students. In effect, it is making the contracts more advantageous to the financial industry by subjecting students to higher fees.

Calling this “deregulation” might lead readers to believe there is some principle at stake here. There isn’t. As with most of the actions of the Trump administration, the only principle is giving more money to the rich and powerful.

Susan Dynarksi had a very good piece in the NYT Upshot section on several measures from the Trump administration which will allow the financial industry to collect larger fees from student loans. However, the piece errs in describing the changes as being “deregulation.” Rather these changes are ways in which the government is deliberately choosing not to enforce contracts in ways that increase corporate profits at the expense of student borrowers.

Suppose that the government announced that it was going to stop making efforts to verify income among people applying for food stamps. In fact, suppose it decided to no longer even verify the number of children an applicant was claiming. Would anyone consider this move “deregulation?”

This is comparable to what the government is doing in reference to the firms involved in the student loan repayment process. The purpose of the loans is make it easier for kids from low- and middle-income families to attend college. The government is supposed to design contracts that fill this purpose at the lowest cost to both the government and the students.

The measures being taken by the Trump administration are not likely to lower costs for the government and are almost certainly going to raise them for students. In effect, it is making the contracts more advantageous to the financial industry by subjecting students to higher fees.

Calling this “deregulation” might lead readers to believe there is some principle at stake here. There isn’t. As with most of the actions of the Trump administration, the only principle is giving more money to the rich and powerful.

The Washington Post featured a short explainer on trade deficits by Martin Feldstein, a Harvard Professor and head of the Council of Economic Advisers under President Reagan, and George Schultz, a former Secretary of Labor, Treasury, and State.

The piece told readers that we have trade deficits because the United States as a country consumes more than it produces. It added that the only way to reduce the trade deficit is by increasing domestic savings, for example by reducing the federal budget deficit.

As every economist knows, we can also increase savings by increasing output, unless the economy is already producing at its potential level of output. This means that if we reduced the trade deficit, for example, by lowering the value of the dollar, which makes U.S.-produced goods and services more competitive internationally, we can increase output and thereby also increase savings. (Savings rise in step with income.)

While the identity between savings and trade deficit referenced by Feldstein and Schultz always holds, unless the economy is producing at its potential level of output, we can increase output and employment by reducing the trade deficit.

Simple, isn’t it? Now why would these distinguished economists try to mislead people?

The Washington Post featured a short explainer on trade deficits by Martin Feldstein, a Harvard Professor and head of the Council of Economic Advisers under President Reagan, and George Schultz, a former Secretary of Labor, Treasury, and State.

The piece told readers that we have trade deficits because the United States as a country consumes more than it produces. It added that the only way to reduce the trade deficit is by increasing domestic savings, for example by reducing the federal budget deficit.

As every economist knows, we can also increase savings by increasing output, unless the economy is already producing at its potential level of output. This means that if we reduced the trade deficit, for example, by lowering the value of the dollar, which makes U.S.-produced goods and services more competitive internationally, we can increase output and thereby also increase savings. (Savings rise in step with income.)

While the identity between savings and trade deficit referenced by Feldstein and Schultz always holds, unless the economy is producing at its potential level of output, we can increase output and employment by reducing the trade deficit.

Simple, isn’t it? Now why would these distinguished economists try to mislead people?

The Washington Post has a major article on a speech by GE’s chief executive Jeffrey Immelt in which he condemned lackluster efforts to fund the Export-Import Bank as “pathetic.” The piece neglected to mention that GE is almost always one of the largest recipients of below market interest rate loans or guarantees from the Export-Import Bank.

The headline also reported Immelt’s condemnation of “protectionism.” It would have been worth pointing out that much of what GE sells in the United States is produced overseas, which means that GE’s profits would likely be hurt by some protectionist measures or even efforts to reduce the value of the dollar closer to its market rate.

It is also worth noting that it appears that Mr. Immelt is just fine with patent and copyright protection. These forms of protection are enormously costly, often raising the price of the protected items by several thousand percent above the free market price. For this reason, it is wrong to say that Immelt is opposed to protectionism, he appears to just be opposed to types of protectionism that reduce this company’s profit.

The Washington Post has a major article on a speech by GE’s chief executive Jeffrey Immelt in which he condemned lackluster efforts to fund the Export-Import Bank as “pathetic.” The piece neglected to mention that GE is almost always one of the largest recipients of below market interest rate loans or guarantees from the Export-Import Bank.

The headline also reported Immelt’s condemnation of “protectionism.” It would have been worth pointing out that much of what GE sells in the United States is produced overseas, which means that GE’s profits would likely be hurt by some protectionist measures or even efforts to reduce the value of the dollar closer to its market rate.

It is also worth noting that it appears that Mr. Immelt is just fine with patent and copyright protection. These forms of protection are enormously costly, often raising the price of the protected items by several thousand percent above the free market price. For this reason, it is wrong to say that Immelt is opposed to protectionism, he appears to just be opposed to types of protectionism that reduce this company’s profit.

In the era of Donald Trump, the New York Times apparently felt it was important to get a climate denier among its columnists. For this reason, they hired Bret Stephens away from the Wall Street Journal. Apparently, they could not find a climate denier who also understood arithmetic, since Mr. Stephens clearly falls short in this category.

Stephens uses his most recent column to tout mistakes made by those pushing for reductions in greenhouse gas emissions. He rightly seizes on biofuels, which are in fact a net loser from a global warming perspective.

While he is right that the effort to promote biofuels was a major mistake, it’s not clear what the importance of this is. There were major mistakes in the development of every major technology in history. It would be hard to imagine that the effort to develop clean or cleaner energy sources would not take some wrong turns.

Anyhow, Stephens goes badly astray when he tries to tell readers that we have seen nothing but wrong turns. He tells us:

“There’s also been some acknowledgment that Germany’s Energiewende — the uber-ambitious “energy turn” embarked upon by Angela Merkel in 2010 — has been less than a model for others. The country is producing record levels of energy from wind and solar power, but emissions are almost exactly what they were in 2009. Meanwhile, German households pay nearly the highest electricity bills in Europe, all for what amounts to an illusion of ecological virtue.”

I managed to track down Mr. Arithmetic (he’s been on a long vacation) to ask about this one. Mr. Arithmetic points out that Germany’s economy has grown by more than 16 percent since 2009. This means if Stephens is right, that its emissions are lower today than they were in 2009, then Germany has managed a remarkable 16 percent reduction in emissions per unit of GDP in just eight years.

Contrary to what Stephens implies in his column, this would be an incredible success story, especially since Germany’s emissions per unit of GDP were already relatively low. (It is harder to achieve a larger percentage reduction from a low level than a high level.) If Stephens is right about Germany, then it should be easy for the United States to achieve and beat the emissions reductions set in the Paris agreement.

It is also worth noting that everyone understood that the first-movers were going to pay a higher price than followers. In other words, Germans understood that by taking the lead in reducing emissions it would pay a higher cost for reductions than laggards. They would be the cutting edge in developing and putting in place new technology, meaning that they would be stuck with paying the bill for some losers. The laggards would only pay for the winners.

This was a very socially minded position, where the whole world stood to gain from the fact that Germany was taking the lead in reducing greenhouse gas emissions. This wasn’t a case of stupidity, as Stephens seems to think. It was a case of caring about the future of humanity and being willing to make some sacrifice to protect it.

In the era of Donald Trump, the New York Times apparently felt it was important to get a climate denier among its columnists. For this reason, they hired Bret Stephens away from the Wall Street Journal. Apparently, they could not find a climate denier who also understood arithmetic, since Mr. Stephens clearly falls short in this category.

Stephens uses his most recent column to tout mistakes made by those pushing for reductions in greenhouse gas emissions. He rightly seizes on biofuels, which are in fact a net loser from a global warming perspective.

While he is right that the effort to promote biofuels was a major mistake, it’s not clear what the importance of this is. There were major mistakes in the development of every major technology in history. It would be hard to imagine that the effort to develop clean or cleaner energy sources would not take some wrong turns.

Anyhow, Stephens goes badly astray when he tries to tell readers that we have seen nothing but wrong turns. He tells us:

“There’s also been some acknowledgment that Germany’s Energiewende — the uber-ambitious “energy turn” embarked upon by Angela Merkel in 2010 — has been less than a model for others. The country is producing record levels of energy from wind and solar power, but emissions are almost exactly what they were in 2009. Meanwhile, German households pay nearly the highest electricity bills in Europe, all for what amounts to an illusion of ecological virtue.”

I managed to track down Mr. Arithmetic (he’s been on a long vacation) to ask about this one. Mr. Arithmetic points out that Germany’s economy has grown by more than 16 percent since 2009. This means if Stephens is right, that its emissions are lower today than they were in 2009, then Germany has managed a remarkable 16 percent reduction in emissions per unit of GDP in just eight years.

Contrary to what Stephens implies in his column, this would be an incredible success story, especially since Germany’s emissions per unit of GDP were already relatively low. (It is harder to achieve a larger percentage reduction from a low level than a high level.) If Stephens is right about Germany, then it should be easy for the United States to achieve and beat the emissions reductions set in the Paris agreement.

It is also worth noting that everyone understood that the first-movers were going to pay a higher price than followers. In other words, Germans understood that by taking the lead in reducing emissions it would pay a higher cost for reductions than laggards. They would be the cutting edge in developing and putting in place new technology, meaning that they would be stuck with paying the bill for some losers. The laggards would only pay for the winners.

This was a very socially minded position, where the whole world stood to gain from the fact that Germany was taking the lead in reducing greenhouse gas emissions. This wasn’t a case of stupidity, as Stephens seems to think. It was a case of caring about the future of humanity and being willing to make some sacrifice to protect it.

Theresa Brown is far too generous to the U.S. health care system in her NYT column. She tells readers:

“Health care in the United States is more expensive because, unlike the systems in other countries, ours rests on the idea that profits and quality health care go hand in hand.”

It is far too generous to say that any idea is behind the structure of the U.S. health care system. When the drug companies push for longer and stronger patent protection or doctors are trying to restrict competition, they aren’t pursuing ideas, they are trying to increase their incomes. No one should pretend there is some general principle at stake here.

Theresa Brown is far too generous to the U.S. health care system in her NYT column. She tells readers:

“Health care in the United States is more expensive because, unlike the systems in other countries, ours rests on the idea that profits and quality health care go hand in hand.”

It is far too generous to say that any idea is behind the structure of the U.S. health care system. When the drug companies push for longer and stronger patent protection or doctors are trying to restrict competition, they aren’t pursuing ideas, they are trying to increase their incomes. No one should pretend there is some general principle at stake here.

Charles Lane, who made his reputation by misrepresenting studies on Social Security Disability in the Washington Post, has apparently just discovered that states that vote Democratic also have higher state income taxes. While most folks knew this, Lane acts like Donald Trump passing around maps of the Electoral College vote to reporters; he thinks he has discovered something new.

He gleefully suggests that the Republican propose a tax reform that will end the deductibility of state income taxes and use the savings ($74 billion a year or 0.4 percent of GDP) for an enhanced Earned Income Tax Credit and a modest boost in infrastructure spending. Lane argues that this would pose a devastating problem for Democrats.

The point is that the current deduction means that the federal government effectively subsidizes 40 cents of every dollar that high-income people in blue states pay in state income taxes. This makes it easier for them to raise taxes to pay for things like high-quality Medicaid, pre-kindergarten, and child care. But Lane wants them to have to choose between an expanded EITC and modest boost in infrastructure and maintaining their spending in these areas. He thinks this is especially clever since it will look like they are protecting a tax break for the rich.

This is very cute, but let’s see if we get cuter. How about two other reforms that would whack the blue states while making most of the population better off? Suppose we tried to nail the high rollers in the financial sector with a modest financial transactions tax? Representative Peter DeFazio proposed just such a measure yesterday. This would radically downsize the industry, by eliminating a vast amount of wasteful trading.

This would be a huge hit to the financial industry, primarily located in New York and other blue states. It would also raise more than $40 billion a year (other versions would raise more). Virtually all of this money comes out of the hide of the financial industry itself, since the cost of the tax would be fully offset by a reduction in trading volume, leaving trading costs for most investors unchanged.

For another route, how about publicly financed research for prescription drugs? This would allow new drugs for treating cancer, AIDS, and other diseases to be sold in a free market for a few hundred dollars rather than tens or even hundreds of thousands of dollars charged when drug companies have patent monopolies. While the folks during the research could still count on good salaries, the huge dividends earned by patent holders and pharma execs, who are overwhelming blue staters, would disappear. The benefits in lower drug prices could reach $400 billion a year, or more than 2.0 percent of GDP.

What do you say Mr. Lane? Here are some ways to really whack blue states while helping the low- and middle-income people that Democrats are supposed to care about. Are you in?

Charles Lane, who made his reputation by misrepresenting studies on Social Security Disability in the Washington Post, has apparently just discovered that states that vote Democratic also have higher state income taxes. While most folks knew this, Lane acts like Donald Trump passing around maps of the Electoral College vote to reporters; he thinks he has discovered something new.

He gleefully suggests that the Republican propose a tax reform that will end the deductibility of state income taxes and use the savings ($74 billion a year or 0.4 percent of GDP) for an enhanced Earned Income Tax Credit and a modest boost in infrastructure spending. Lane argues that this would pose a devastating problem for Democrats.

The point is that the current deduction means that the federal government effectively subsidizes 40 cents of every dollar that high-income people in blue states pay in state income taxes. This makes it easier for them to raise taxes to pay for things like high-quality Medicaid, pre-kindergarten, and child care. But Lane wants them to have to choose between an expanded EITC and modest boost in infrastructure and maintaining their spending in these areas. He thinks this is especially clever since it will look like they are protecting a tax break for the rich.

This is very cute, but let’s see if we get cuter. How about two other reforms that would whack the blue states while making most of the population better off? Suppose we tried to nail the high rollers in the financial sector with a modest financial transactions tax? Representative Peter DeFazio proposed just such a measure yesterday. This would radically downsize the industry, by eliminating a vast amount of wasteful trading.

This would be a huge hit to the financial industry, primarily located in New York and other blue states. It would also raise more than $40 billion a year (other versions would raise more). Virtually all of this money comes out of the hide of the financial industry itself, since the cost of the tax would be fully offset by a reduction in trading volume, leaving trading costs for most investors unchanged.

For another route, how about publicly financed research for prescription drugs? This would allow new drugs for treating cancer, AIDS, and other diseases to be sold in a free market for a few hundred dollars rather than tens or even hundreds of thousands of dollars charged when drug companies have patent monopolies. While the folks during the research could still count on good salaries, the huge dividends earned by patent holders and pharma execs, who are overwhelming blue staters, would disappear. The benefits in lower drug prices could reach $400 billion a year, or more than 2.0 percent of GDP.

What do you say Mr. Lane? Here are some ways to really whack blue states while helping the low- and middle-income people that Democrats are supposed to care about. Are you in?

A Washington Post article on a bill passed by the House, which would allow employers to give workers time-and-a-half credit for overtime hours, instead of time-and-a-half pay, likely misled many readers on the substance of the bill. The very first sentence told readers the bill:

“…would allow private-sector employees to exchange overtime pay for ‘compensatory time’ off.”

This is not true. The bill does not give the employee the right to say they would prefer compensatory time for working overtime, it gives this right to the employer. In principle, the worker is supposed to have the option to refuse the offer and say that they would instead prefer their overtime pay. However, the piece further misleads readers in the second paragraph:

“It [the bill] seeks to take a similar provision that has been available to government workers since 1985 and extend it to private-sector employees, making it legal for them to choose between an hour and a half of paid comp time and time-and-a-half pay when they work additional hours.”

There is a big difference between public employees and private sector employees. Public sector employees cannot be fired at will, while private sector employees can be, unless they are covered by a union contract. While this legislation, in principle, protects private sector employees from being coerced into accepting time off in lieu of overtime pay, it is difficult to see how this could be enforced.

An employer can fire anyone for almost any reason at any time. While the bill does prohibit an employer from firing someone for refusing to take comp time, an employer can legally fire someone because their last name begins with the letter “B.” This means that a worker who refuses to accept comp time can be fired over the first letter in their last name.

This could be contested in court, where the worker would argue that the actual reason was their refusal to accept comp time. Perhaps they could prove this, but the damages, even when doubled as required in the bill, would almost certainly not cover the cost of hiring a lawyer. This means that almost no one would use the legal system to protect their rights. If an employer fired one worker over this issue, the rest would quickly get the message.

If the Republicans actually wanted to make the prohibition on firing an enforceable right, the bill would require the employer to pay legal fees, if they lost a case. This requirement for civil rights cases is what makes enforcement of the civil rights laws possible.

A Washington Post article on a bill passed by the House, which would allow employers to give workers time-and-a-half credit for overtime hours, instead of time-and-a-half pay, likely misled many readers on the substance of the bill. The very first sentence told readers the bill:

“…would allow private-sector employees to exchange overtime pay for ‘compensatory time’ off.”

This is not true. The bill does not give the employee the right to say they would prefer compensatory time for working overtime, it gives this right to the employer. In principle, the worker is supposed to have the option to refuse the offer and say that they would instead prefer their overtime pay. However, the piece further misleads readers in the second paragraph:

“It [the bill] seeks to take a similar provision that has been available to government workers since 1985 and extend it to private-sector employees, making it legal for them to choose between an hour and a half of paid comp time and time-and-a-half pay when they work additional hours.”

There is a big difference between public employees and private sector employees. Public sector employees cannot be fired at will, while private sector employees can be, unless they are covered by a union contract. While this legislation, in principle, protects private sector employees from being coerced into accepting time off in lieu of overtime pay, it is difficult to see how this could be enforced.

An employer can fire anyone for almost any reason at any time. While the bill does prohibit an employer from firing someone for refusing to take comp time, an employer can legally fire someone because their last name begins with the letter “B.” This means that a worker who refuses to accept comp time can be fired over the first letter in their last name.

This could be contested in court, where the worker would argue that the actual reason was their refusal to accept comp time. Perhaps they could prove this, but the damages, even when doubled as required in the bill, would almost certainly not cover the cost of hiring a lawyer. This means that almost no one would use the legal system to protect their rights. If an employer fired one worker over this issue, the rest would quickly get the message.

If the Republicans actually wanted to make the prohibition on firing an enforceable right, the bill would require the employer to pay legal fees, if they lost a case. This requirement for civil rights cases is what makes enforcement of the civil rights laws possible.

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