To Help Working Women, Set Them Free

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On Wednesday the Joint Economic Committee, under the chairmanship of Representative Kevin Brady of Texas, will hold a hearing on women in the workplace. I have been invited to testify.

Employment for women 16 years and older only reached pre-recession levels only in January 2014. Employment for prime-age women (25 to 54 years) is 2 million short of pre-recession levels. Their labor force participation rate declined from 76 percent before the recession to 74 percent today.

Not only is the slow growth of the economy reducing employment opportunities for men and women alike, but some women face particular barriers to employment as they move in and out of the workforce in their role as family caregivers. They need more flexibility to participate in the workforce. But President Obama's new overtime rules, currently being drafted in the bowels of the Labor Department, would extend overtime rules to several million employees that businesses classify as executive or professional employees. This would prevent employees from taking time off to make up for overtime work, making it more difficult for some women to work.

For those who believe that flexibility is not important to women in the workplace, look no further than the Yale Law Women website. Yale Law Women just announced its ninth list of Top Ten Family Friendly Firms. Few women at Yale Law School have children, but they are already planning ahead to be moms with flexible schedules. Their top firms are derived from a survey which "explores important family friendliness indicators such as the billable hour requirement, part-time and flex-time options, caregiver leave policies, and childcare availability."

Yale Law Women should tell this to Mr. Obama. In March, in the ornate East Room of the White House, the president said, "Overtime is a pretty simple idea: If you have to work more, you should get paid more." What if you want time off instead of more pay, just like the women at Yale Law School?

More pay for more time sounds good, but many workers are already paid salaries that reflect their hours worked. Think of elected officials or university professors, who get salaries but not overtime pay. Employees who receive overtime pay would not be allowed to take time off, or comp time, in exchange for overtime. They would have to receive overtime pay. Some people might prefer overtime pay, but others, especially working mothers, might prefer more leisure.

Polls show that flexibility of work hours is especially important in the Hispanic community, not just for family reasons, but also to celebrate religious holidays.

Currently, any salaried worker making less than $455 per week, or $23,660 a year has to get overtime pay, a level established under Department of Labor regulations in 2004. The Department of Labor has not yet stated how high it will seek to push the weekly salary limit for guaranteed overtime, but it is expected to be a significant increase.

Overtime rules hurt women by reducing flexibility with their employer. Many women with children, particularly young mothers who cannot afford childcare, would prefer to have flexibility in their schedule rather than extra overtime pay. When overtime hours are allowed to count toward time off instead of pay, women can change their work schedules according to their needs. If a child becomes sick or the babysitter cancels, a female employee with the flexibility of extra hours can simply take time off. Requiring overtime pay legally limits many women from trying to negotiate time off with their employers.

Rather than decreasing the number of employees who can receive comp time, as the president has proposed, the Working Families Flexibility Act of 2013, sponsored by Alabama Representative Martha Roby, a Republican, would expand it. The bill, which passed the House last year, would allow employers to offer workers who worked more than 40 hours a week a choice of one and a half hours of comp time per overtime hour worked, rather than overtime pay. A Senate version, sponsored by Republican Senator Mike Lee of Utah, has not got voted out of committee.

The advantage of the Working Families Flexibility Act is that it gives employees, not employers, the power to choose what is in their best interest, either more time or more money.

When people have more money they can buy many things to make their lives more pleasant and more entertaining-but they cannot buy more time. When workers are hired, they frequently have little vacation. When they are given the choice of comp time instead of overtime pay, they are taking something that money cannot buy. Some people would always prefer to receive overtime pay rather than comp time, and they would be able to do it under the Act.

The bill would extend to middle-income families those privileges already enjoyed by higher-salaried individuals, such as graduates of Yale Law School. Many Americans already have the opportunity of comp time. They mostly work in white collar professions and the federal and state governments. But for millions of average hourly and salaried workers, comp time is just a dream, not a reality. Mr. Obama wants to remove the choice of comp time from millions more workers, not extend it to others.

One of the main problems facing parents today is how to combine the dual demands of work and family. It is here that the Working Families Flexibility Act is so valuable. Many women choose flexible careers, and 24 percent work part-time, because they place a higher value on extra hours spent with the family.

The Working Families Flexibility Act would benefit not just current workers who would like additional flexibility, but also women who do not work but who might find the prospect of comp time an inducement to enter the labor force. Some mothers do not want to enter the workforce because they are unwilling to work long hours. In some occupations overtime is required, rather than voluntary, leading to more than 40 hours a week away from home. For these people, the prospect of comp time might make working a full-time job a viable option.

Many working women value the freedom to choose hours of work. To increase women's labor force participation, Congress should realize that the economy needs more flexibility, not less.

Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is senior fellow and director of Economics21 at the Manhattan Institute. Follow her on Twitter: @FurchtgottRoth.   

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