You’ve heard about the Obama mandates for raising the minimum wage and the consequences that work against sound economics. Regular readers of JLF know the facts, reports, studies, scholarly opinionarguments and pleas for good economics.  But yet the federal government continues this nonsense.

Now they’re talking about extending federal interference in the market by lowering the threshold for overtime pay time.  A good idea?  Not so much, according to a new Mercatus Center report.

In a new Mercatus Center research paper, we analyze the likelihood that the new overtime-pay rule will promote any of the stated objectives. We find that the Labor Department overlooks the most likely response by employers—namely, to cut employees’ base salaries, when feasible, in reaction to the overtime regulation. Empirical studies reveal little evidence that overtime-pay regulations result in greater pay or more employment.  

A WSJ op-ed on their findings concludes:

It is irresponsible and unethical of the Labor Department to emphasize only the potentially positive consequences of government-mandated overtime pay. Employees should be aware that while it’s possible that this regulation will increase their pay or reduce their work hours, the more likely outcome is that their base pay will fall, and they’ll lose many of the perks that come with not having to punch a time clock.

Is it just the federal government we have to fight with these encroachments on free markets, impacting real families, real workers?  California just raised their minimum wage to $15 an hour, New York is close behind in recent state mandates, and efforts are underway in Massachusetts.  But we’re safe here in NC, right? Not so fast. Even though they knew it was illegal, Charlotte recently attempted to by-pass state law and mandate a higher minimum wage for contractors doing business with the city.  Wisely, the General Assembly struck that down as part of the controversial HB2.

Government mandates interfering with free markets, whether it’s minimum wage or overtime pay mean dire consequences for working families.  Where will it end?  Just one more reason the election in November is so important.