It’s Not Just Skilled Labor vs Unskilled Labor Any More, And That Matters

In the debate over minimum wage, we are also contending with a much larger social debate on neither the value of education and training, or even the right to a life sustaining wage, but one of semantics about the work that people do and whether or not that work is “skilled” or “unskilled”.

Which fails to acknowledge the much larger issue that labor is functionally no longer broken down into a dichotomy, but at least a quadripartite of highly skilled, skilled, semi-skilled, and unskilled, that is then perceptively pulled back into the same two segments, with loose definitions on where each part should be classified based on the argument being made.

And that’s just the descriptor for various common trades, what we are also neglecting to address is the proliferation of so-called gig work, in which earning an income is not necessarily a function of vocation but of necessity to supplement income across the unskilled, semi-skilled, and skilled spectrum. In some instances, even the highly skilled among us are also utilizing gig work to make ends meet.

But that all comes down to how we, we as a country, a state, a community, and a business choose to define employees within our business.

What we have failed to do is have meaningful conversations about labor, it’s value to people, and the value of people in general without it becoming an ego stroking pissing contest regarding whose job is more important.

I’m not a doctor, a lawyer, or an accountant, common professions listed as highly skilled.

Technically, as an IT person, I am however considered skilled labor, along with an interesting assortment of steel, textile, and chemical workers.

I’m not semi-skilled, though I have been classified as such, in the company of bartenders, taxi drivers, and clerical staff.

And then there’s unskilled, which is the odd assortment of people that, effectively, are seen as requiring no specialized training to do their jobs such as janitors, fast food workers, and cashier’s.

But when we get into the dichotomy of skilled versus unskilled, and depending on perspective, I’m generally considered unskilled.

And like many so-called skilled workers who are not “highly skilled,” I can easily, and have, end up on the same end of the pay scale as those who “flip burgers.”

And most of this has to do, not with skills and education, but about the desire of companies to maximize profits through arbitrary suppression of wages which they accomplish through creating a dividing conversation with words like value, worth, education, experience, and skills. Perhaps what we need is a fifth classification called “asshole labor.” To define, this would the classification given to those who utilize, perpetuate, and benefit from creating such arguments in the general workforce, example most CEOs of large businesses.

Because ultimately, when we look at income distribution, most of us, even those of us who are highly skilled, are essentially working between abject poverty and $150,000 a year. Asshole labor doesn’t get out of bed for $150,000 a year, most are not even interest in taking the position at under $250,000.

And in the asshole labor field, we find senators and legislators, the people who make our policies, vote on stimulus checks and minimum wage. And what we can see is that they are having an entirely different conversation about skilled vs unskilled labor. And that those are pretty words for me and people like me, and everyone else.

In employment we have seen the rapid rise of unpaid work that that reduces the effective hourly rate of those in salaried positions and hourly workers alike. From off the clock meeting, even ones happening on a day off, to transferring duties and responsibilities of multiple workers onto one employee causing unpaid extra hours to be worked, unskilled, semi-skilled, skilled, and highly skilled workers are often in abusive positions being, albeit legally, pushed to work additional hours without additional pay.

If you work at an hourly rate at minimum wage and are required to attend an off the clock meeting, that unpaid time counts against your hourly rate of pay, in just one minute you are instantly making less than minimum wage. That part is clear and most workers who earn minimum wage to start realize that instantly.

But many skilled workers never realize that while the “expectation to work longer hours” effectively translates to lower wages as well.

If, as a full-time employee paid a fixed salary, you calculate that amount on the presumption of getting paid for work you do as though it were 5 days a week for 8 hours a day, you may easily earn $15 per hour or more. But do you work 40 hours a week? So maybe it’s more like 50 hours a week. So, you divide by 50 instead of 40 and you go from say $35,000 a year being $16.83 per hour, to $13.46 per hour.

Except, because you are a salaried employee that isn’t the whole story. If you were actually paid hourly, you would also be paid overtime, time-and-a-half, for those 10 extra hours. Now your $16.83 per hour is really more like $12.24 an hour.

And that’s the real fear and the real issue that makes companies fight against minimum wage increases.

Because what this conversation is actually about is overtime exempt and non-exempt employees and the wage and hour disputes that can arise when employers are found to be using that to pay wages at a rate that abuses employees.

In 2020, the salary threshold for overtime exempt employees jumped from $455 per week ($23,660 per year), or about $11.38 per hour that plummets to $7.34 per hour with just 14 hours and 40 minutes of overtime each week, to $684 ($35,568 per year), or about $17.10 per hour that allows for as little as $7.28 per hour with about 36 hours of overtime. Under $15 an hour minimum wage, 3 hours and 15 minutes of overtime would quickly push employed to an effective hourly rate of $15.20.

Overtime exempt is a classification allowed for another class of workers referred to as “white collar” (versus “blue collar”) workers, the definition of which is highly integrated with how we define the unskilled, vs skilled labor debate.

Despite protests that wage earners will see no improvement in wages, the reality is they very much would, albeit not immediately, as there would be a case for, even under the new standard, for employees not paid overtime to fight their exempt status in jobs where they are expected to work extra hours.

Assuming for a moment that employers didn’t hotly contest this change from $454 to $684, they effective showed part of their hand on just how many extra hours that they expect employees to work. Or, moreover, how many employees are expected to work in overtime exempt jobs and put in more than 14 hours and 40 minutes of overtime each week. In either case, neither employers or employees are defining jobs, at least not in the overtime exempt category, as 40 hours a week any more, and it would seem that those jobs are exceeding 54 hours and 40 minutes so regularly that a 150% increase in compensation to pad against unpaid overtime work happened without much debate.

To be clear, this means that employers are well aware that, roughly speaking, 55 hours a week is the new full-time job.

Using this all as a reference, that $684 threshold would need to move to at least $938 ($48,776 per year) just to accommodate 15 hours of overtime work expected, and $1,410 ($73,320 per year) for the full 36 hours of overtime that it currently supports. Another 137% to 206% increase of the minimum wage threshold.

Just to make sure everyone is on the same page, entry level workers in a salaried overtime exempt job would effectively (potentially) be looking at going from starting a job at $23,660 in 2019 to $35,568 in 2020, to a foreseeable near future bump to $48,776, all because employers know that an increase in their demand for extra hours from employees coupled with an increase in minimum wage will inevitably lead to increased claims of exploitative misclassification of employees as overtime exempt.

And, with documentation by the employee and a half decent lawyer, those claims will lead to back pay awards and penalties that demonstrate to management and the broader asshole labor segment the fundamental need to adjust, if not through legal mandate at least business practice regarding, salary to amounts that would avoid most if not all such claims.

Why, because the Fair Labor Standards act not only can require an employer to go back 3 years to pay substantiated misclassification claims, from the date of filing, and can then double that amount.

So, let’s take this example and play it out in a scenario. John is hired as an overtime exempt employee at $35,568 a year, minimum wage increases to $15 per hour before he started. John is routinely required to put in 15-20 hours of overtime (for argument’s sake, we will say that over 3 years it averages out to a perfect 17 hours of overtime each week). John then files a misclassification claim. If that claim is substantiated, that employer will be penalized anywhere from $46,566, that makes up the difference between the $35,568 John made and the $51,090 he should have earned with proper classification and overtime pay) to $93,132 with doubling of that award.

What is important to remember is that, technically speaking, there are many employees classified as overtime exempt that are not the kind of employees that should be overtime exempt.

What generally keeps this from being an issue is that it should wash, and employees are happy enough with a fixed and expected income, despite being technically misclassified and potentially due more at some point but less at others if they were properly classified, and are also reasonably treated by their employer to not complain, and whose claims would effectively be arguing over pennies even if they were to pursue it.

But I don’t know anyone making $35,568 a year, from our example, who would walk away leaving $15,522 a year, or self-selecting a 30% pay cut just because their employer is “nice” to them. And really, given our past issues surrounding gender inequality in pay and the 75 cents for every man’s dollar that women make (the 25% vagina tax), how much worse would it then be walk away from another 30% in overtime pay?

And, guess what, even your employer isn’t dumb enough to think you will either, even if you’re already being paid 25% more for having a penis.