Savings and Layoffs

The superintendent at my local school district has announced plans for upcoming layoffs to save money caused by a budget shortfall. He plans to layoff one from office staff and one from the janitorial staff at each school. They expect to enlarge class size to cut back on teachers.

Layoffs put people into the job market adding to job seekers and making it easier for employers to offer lower wages. We might call that the obvious effect, but savings from layoffs have another effect: an increase in uncompensated work.

Teachers have never been hourly rated employees. Phrasing in teacher contracts assures long work hours. “Teacher shall perform such duties as deemed necessary, shall attend all assigned meetings, shall be present at school during school hours, shall be present at school or other location outside school hours as directed in connection with school events or activities.”

With a contract clause like that school officials can save money giving teachers more students and more work, like suggesting they may need to empty a few wastebaskets and fill out or file a few extra forms; work formally done by those laid off janitors and office staff.

Overtime pay rules in the Federal Fair Labor Standards Act require time and a half pay for hourly rated employees working over 40 hours a week. However, over the last 8 years many new exemptions and amendments were made to overtime work rules. Executive, administrative, professional and outside sales employees paid on a salary basis can be exempted from over time pay. The new rules can be found on the U.S. Department of Labor website.

The 40-hour work week has been the standard full time workweek for more than eighty years, but pressuring people to work additional hours makes it easier to turn layoffs into a permanent loss of jobs.

The worst abuses are apparently in the managerial ranks where the Bureau of Labor Statistics reports a decline 2 million managerial jobs at establishments since 1999. Managerial jobs for 1999 are reported at 8,063,410; managerial jobs for 2007 are reported at 6,003,930. Three people working 40 hours a week equals two people working 60 hours a week but with a one-third savings in labor costs.

My superintendent’s cost cutting plan comes right as the Congress debates billions of dollars in bailouts for defaulting homeowners, bankrupting car companies and failing banks. Maybe they could pass of few million along to my school district, but it will not matter much unless they get to the real problem: wages and employment. They could start with the Fair Labor Standards Act and fix those destructive overtime rules.