Retail jobs are famously low-paying, with erratic schedules and sometimes shift changes without prior notice. Little wonder, then, that an hourly-paid retail worker would aspire to be promoted—to a salaried low-level management position with its promise of an ascent up the corporate ladder. But it doesn’t always work out so nicely, as writer Virginia Sole-Smith explains in this November 2015 Newsweek report.
Read it here: Sole-Smith, “It’s Walgreens vs. the American Dream in the battle for overtime”
- For an hourly-paid retail worker, a salaried position is presented as a way to advance their career. Sole-Smith argues that large companies such as Walgreens, Chipotle, and many more, are using the shift to salaried status as a way to avoid paying overtime, without keeping the promise of genuine advancement. What evidence does she present? Give a brief summary. Is her argument persuasive? Why or why not?
- Although Sole-Smith’s article focuses more on the concerns of the workers, the positions of the companies and industry groups are also explained. How fairly does she treat these opposing views? Point to examples to support your conclusions.
- Sole-Smith refers to the American Dream without giving any definition or explanation. In what sense is she using the term? Read (or re-read) Edward McClelland’s essay in Chapter 19 of your text. Are McClelland and Sole-Smith interpreting the American Dream in the same way? How are the two authors’ interpretations similar? How are they different? Point to specific passages to support your thinking.
- As Sole-Smith explains, it has been the law of the land since 1938 that wage workers be compensated at time-and-a-half for hours worked in excess of forty hours per week. However, the baseline salary that determines the threshold for overtime qualification hasn’t changed in forty years. In addition, the proportion of time a worker spends on managerial tasks can figure into the determination of overtime qualification. Thus, the current debate centers around “how to determine who qualifies for overtime.” Should this determination be based on the proportion of time spent on managerial tasks? The salary a worker receives? Some combination of the two? How would you propose solving the problem? Using Sole-Smith and/or the sources she cites as your They Say, write an essay proposing clear and fair guidelines for salaried workers’ overtime compensation.
They Say I Blog 
The Newsweek – Virginia Sole-Smith “Walgreen’s” article illustrates how businesses search for ways to cut their expenses in order to increase their bottom line. It’s no secret why they would feel the need to do so, or that they might get creative in doing so, the economy has not been strong in recent years yet investors (shareholders) still need to see a return on their investment. One way to cut its largest expense, payroll, is to reduce the number of hours on which the company must pay Overtime. This can be done by using several means but Walgreen’s chose to convert (promote) hourly employees to salaried employees. Salaried employees are generally exempt from overtime as they are generally Professionals (doctors, lawyers, officers etc…) Administrators or Executives. (Fair Labor Standards Act 1938) Overtime equates to time and a half what the employee is regularly paid. This generally applies to any hours worked in excess of 35-40 in one week. Double time is paid for working Holidays and other special dates.
Walgreen’s chose to promote the single mother of 4, Ruby Warner, to the status of Executive Assistant Manager. While she was thrilled, the article stated she learned she was making almost the same amount, per hour, but was working more hours! As a salaried employee, Warner was working between 50-60 hours weekly, compared with the 40-44 she had been scheduled previously. If she were paying for child care, and overtime to her caregiver, working more hours actually means a reduction in her take-home pay! Most would agree there is little incentive to work hard for a promotion if it means less pay.
When the Act was established, it provided Professionals, Administrators, and Executives salaried above the $23,660.00 mark, are exempt from earning Overtime pay. In 1975, when the Act was amended, the 23k salary applied to many more workers then than today. By 2015 standards, 23k seems low until you consider its equivalent, adjusted for inflation, today – $104,642.00. The article stated 1975 exempt workers made up 62% of the workforce. The American Dream was alive and well, uh, unless you count 13% interest rates, an oil embargo, and gas rationing… but I digress. Today, interest rates are the lowest we’ve seen since the Roaring ’20’s, home ownership is at an all time high, yet less than 8% of the workforce qualifies as exempt from Overtime pay. The article claims this is due to the fact that base wages have not kept up with inflation and are now below the Poverty Line for a family of four.
One remedy suggested may be to extend the income limit from $23,600.00 to $50,440.00 per year which would offer Overtime Pay to 40% of American workers. This still leaves 22% out in the cold. By contrast, many businesses and organizations argue that 50k a year equates to an Executive salary in some parts of the U.S. Some salaried professionals feel that being put “back on hourly” seems like a step down. As it stands now, 11 million workers now on salary are eligible for Overtime as they are not within the definition of the Workforce act, and are not Executives, Administrators, or Professionals (Computer programmers for example). California requires the employee spend a minimum of 50% of their time at work on managerial duties like staff scheduling, processing reports, inventory control, human resource tasks and so forth. Ms. Warner reported she was asked not only to stay late on many occasions, she was performing duties that didn’t directly pertain to her job description, ie. Scrubbing toilets or manning the register in the Pharmacy department. The author explains Ruby Warner was promoted by Walgreen’s only as a means to cut Payroll Overtime expenses, not necessarily because they needed more management, or that she was qualified for a management position, though she may be. This not only cheapens the promotion, socially, but cheats the employee out of wages, their time, (they could use to do anything in the pursuit of their own interests) including their choice to start a business or earn additional income. Forced (or coerced) labor without pay is something that went out of fashion with the Civil War.
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Ruby Warner’s story is what many would consider the opposite of the American dream. There is a unanimous agreement that those who work hard should be rewarded for that hard work. Warner should have been rewarded for her hard work and dedication to the company. Instead she was taken advantage for the sole benefit of the company saving money. This puts a negative image on the idea of the American dream. This kind of behavior from companies to give employees a salary to use them for cheaper labor should be illegal. If they are given a salary the employee should expect to have more responsibilities and sometimes have to work after hours or on weekends. They should not expect to be given a salary so that they can do the same work for less pay. Companies who implore these methods are denying the American dream. This does not mean that employees are no longer rewarded for hard work, and that the American dream is dead. Rewarding hard work may not be as relevant for those who work for large companies, those who work for small businesses are more likely to see positional advancement. Small business owners who care about the success of their business know that it is a necessity to have hard working and loyal employees. The best way to retain those employees, and to further the success of that business is to reward the hard work that those employees have delivered. It may not be the ideal vision that we all think of when we think of the American dream but, even today employees are still rewarded for hard work, and the American dream is still possible.
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The America dream that Warner was striving for was quickly turned around to unpaid overtime hours, more time away from her family and a disappointment of earning the “executive assistant manager” title. The false vision that has been placed in America of job titles by the simple hope that placing a managerial position can lead to financial freedom, but it seems more of a debt that the employees pays at the end of the shift. Examples of Warner’s story and 6 million other Americans that fall under overtime exemption rule. The truth is that hourly pay is more beneficial than salary pay when it is put in an input/output formula. Input (hrs) to output (money) but when the position is salary based and with more responsibilities of the company, there is a loss with overall time, money, and freedom.
There should be an understanding of the company to employee program,to which employees can feel and actively experience a career in progress instead of an employer taken advantage of its employees and making broken promises. I believe it is quite simple to fall into a hopeful career by counting the years of how much longer he or she can patiently wait for a position to open up.This is a difficult situation to be in when there is many variables depending on an employees position. Ie: family, debt,career opportunities and what mostly Americans value- time.
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The Newsweek Article, “It’s Walgreens vs. the American Dream in the Battle For Overtime”, Virginia Sole-Smith argues that many companies are dodging fair pay for workers. She begins by interviewing many employees who have been bumped up to salary and are overtime exempt. These employees, on their own, have found that they are still performing almost all the same tasks, while earning less per hour. As a result, many are arguing that the base-pay set for exempt employees — which remains unchanged since it was set in 1975 — should be raised. The Obama Administration claims to agree and propose to about double the base-pay. As a result, 40% of the workforce, Sole-Smith notes, would qualify for over-time.
However, there are many kinks to work through. Sole-Smith presents evidence from employers that seems to justify the employment of exempt employees. One employer cites that forty-five percent of employees are worried that an hourly position would not feel like a career. To say this seems odd to me. Primarily, the testimonies from the Chipotle employee and the Walgreens employee suggest otherwise. Secondly, I have come to believe that surveys will be taken repeatedly until a desired result or be designed to get this result. 45% is such an uncertain number. Why would they cite this survey? Personally, it promotes apathetic feeling. I think to myself, “Well it’s pretty much split down the middle, so I guess we really should just stick to what we know instead of changing to something potentially worse”.
Sole-Smith goes on to propose that there can be worse by citing UCLA’s Chris Tilly. If we do raise that base-pay, then employers will replace full-time workers with multiple part-time workers or will schedule you with less hours to avoid potential overtime. The former would destroy any attempt at creating a career out of a job. Who can survive of one part time job? Plus, part-timers don’t get benefits like healthcare. The latter would allow for a salaried worker to gain more per hour. Yet, I believe that employers wouldn’t choose to do this for a salaried workers, for, in my opinion, they are trying to cut costs through promoting these employees.
These employees, by pursuing management positions are in pursuit of what they believe is the “American Dream”. There’s an idea that if you get paid a salary, you will be able to support yourself and your family. However, the large corporations, in my opinion, are more interested in keeping those at the top happy rather than the middle-management that Lizzy Simmons was so seemingly fearful of losing.
The fact of the matter is that my idea of the American Dream is to own a home, a car, and raise a family. With the current base pay this is unattainable. If I were to make 24,000 a year, that barely covers rent, food, and a car. To own a house will be next to impossible. To support a family, next to impossible. The only choice is to put ourselves into debt and spend our whole lives trying to climb out of the hole we dug. For those, like me, who destroyed their credit by defaulting on student loans this is even more of an uphill battle. Trying to build credit to get credit cards, auto-loans, or mortgages is difficult when you start off with bad credit before you even fully understood what credit was. The harsh reality is that the house with the white picket fence is becoming less attainable by the average citizen.
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In “IT’S WALGREENS VS. THE AMERICAN DREAM IN THE BATTLE FOR OVERTIME”, Virginia Sole-Smith describes the cost cutting measures the Walgreen’s has resorted to in order to improve profits at the expense of their employees. By classifying employees as a “management trainee”, and making them salaried employees, Walgreen’s legally does not have to pay them for overtime. Sole-Smith goes on to explain that this typically leads to workers putting on 60-hour work weeks and sometimes even making less per hour than the workers beneath them.
I have been in the restaurant business for 20 years. When I began at the age of 15 I wanted to move up in the restaurant from busboy to server. Once I accomplished this, I wanted to become a manager. Then I took a step back and watched my managers. They worked far more hours than us servers and always looked tired. I guesstimated that they were working 65 hours a week, and dividing their annual salary by that gave me an astonishingly low per-hour rate. Nevertheless, I did eventually become a manager, and almost immediately regretted it. Once they had me locked in at $45,000 per year they could work me as much as they liked.
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In Virginia Sole-Smith’s article “It’s Walgreens vs. the American Dream in the Battle for Overtime” she uses Tammy Jenkins as an example of a person who tried to achieve the American Dream by doing what so many in the past used to do. It used to be a way of life that if you started at an entry level job and you worked hard everyday that you could reach your dreams. The company would see your loyalty and commitment to the company and would promote from within the company. To the point that a person could reach management level. This is no longer the case. Corporations are now using the American Dream to their advantage and promoting people to symbolic management positions not to reward a person for their work ethic but to increase the company’s bottom line. Companies practically prey on their employees hopes in exchange for profits. This is not how it used to be as far as we were told.
In today’s times most people can’t even get hired for an entry level position without a college degree. Baby boomers had the chance of reaching middle class with a good work ethic that no longer seems viable for the next generations. There definitely needs to be some kind of reform to labor laws that are just and beneficial for all equally.
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I agree with Sole-Smith’s argument that many big industries throughout the U.S. minimum wage and low income employees. It is interesting how corporation such as Walgreen and Walmart make billions of dollars each year, yet less than a quarter of that income goes their income. I understand the other side of the argument, where many individual argue how if government imposes too much regulation on businesses, it would make it extremely for businesses to be successful and provide more employment opportunities for others. However, something has to give, whether that is to low the cost and standard of living, giving government full control over certain industries such as the health care industry or insurance agencies or raising the minimum wage for workers. The profit of many of these big corporation have increased by the billions since the 20th century and so did the cost of living, but the wages for American employee have remained the same, and some could even argue that the wages may have decreased over the years. The United States has one of the highest income to population ratio, yet more than three quarter of the country’s wealth lay in the hands of these wealthy corporation. Next to any third world country, the United States in one of the few developed nations who have the highest work hour per employee ratio in the world, with little to no benefits to working other than the low wages the corporation provides. No health care, no vacations, low wages and the rise of an impossible cost of living, the American dream that this country has become more of a nightmare than anything else. Similar to how Trump thinks global warming is a hoax perpetrated by the Chinese, many businesses think the minimum wage is a kind of liberal way of trying to earn more than what they already have, but in reality economist have proven that minimum wage for certain states are a necessity for those individual to have a decent standard of living.
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In lots of lower or underpaid jobs the employees put in many more hours of work than what they are actually paid for. Especially when you work a salary job. Instead of workers leaving after there shift is over they feel obligated to stay and do more, even though they are nit getting paid for it. Sometimes it is mandatory to stay over. Which then comes overtime that most people do not get. I think before accepting a higher position you should review the pros and cons; not just the higher pay rate. You should ask yourself am I really ready to take on this position and everything that comes with it?
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While reading this article when the companies discuss their opposing views Warner disregards them and moves on to the following topic. For example, “Simmons declined to comment on ways employers could circumvent the proposed rule.” The industries believed that if they allow the employees to get paid overtime then they will find loopholes. “I’m confident that raising the pay threshold will result in overtime pay for a larger number of workers, but employers can still do end runs around it,” says UCLA’s Tilly. This was briefly discussed in the article majority of the article discussed how companies are taking advantage of workers and not giving them right treatment. On the other hand, employees can take advantage of the overtime pay and find ways to get paid without really accomplishing anything. Walter realized the possibility of employees doing this and that is why she ignored the issue.
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Retail workers are put to the most work and paid less or the same as everyone else. Retail workers mostly have to work holidays and schedules are not really that flexible. A way of getting paid higher is being promoted to a higher position, but is it worth the effort. They’re still responsible for many things that some people think are not justified by their pay. Even with promotion to some sort of manager position, you might have to clock in a lot more hours then you’d like to be scheduled to. The Department of Labor estimates 60 million Americans have jobs like these. A way these employers avoid paying these employee’s overtime is keeping their hours under 40 but putting them to grueling tasks and working on holidays. A lot of single parents are also in these jobs, leaving them little time to take their kids places and many other parental activities. These jobs leave little room for growth and freedom in the workplace.
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Retail workers are put to the most work and paid less or the same as everyone else. Retail workers mostly have to work holidays and schedules are not really that flexible. A way of getting paid higher is being promoted to a higher position, but is it worth the effort. They’re still responsible for many things that some people think are not justified by their pay. Even with promotion to some sort of manager position, which could take years to get, you might have to clock in a lot more hours than you’d like to be scheduled to. The Department of Labor estimates 60 million Americans have jobs like these. A way these employers avoid paying these employee’s overtime is keeping their hours under 40 but putting them to grueling tasks and working on holidays. The government has required employers to pay time-and-a-half for almost every worker who clocks more than 40 hours per week. But salaried employees whose roles are considered “executive, administrative or professional” and who are paid above a set baseline are exempt. A lot of single parents are also in these jobs, leaving them little time to take their kids places and many other parental activities. These jobs leave little room for growth and freedom in the workplace.
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