FC: Hourly workers may get fewer stock options, from Washington Times

[Declan McCullagh <declan () well com>]

http://www.washtimes.com/commentary/comment2-02252000.htm

February 25, 2000
Out of stock for hourly workers?
Richard Miniter

     The surging stock market has turned
stock-option-owning secretaries at Microsoft and
truck drivers at UPS into millionaires. Hoping to
follow in their footsteps, thousands of hourly workers
 everyone from machinists to nurses  are
accepting stock options. Now the U.S. government
wants to force them off the gravy train  a
bureaucratic move that could have huge
consequences for economic growth.
     The U.S. Labor Department recently issued a
controversial advisory opinion that would make it
harder for companies to offer stock options to hourly
employees though corporations would still be able
to issue huge stock options to executives and
managers.

...

     Labor Department bureaucrats think the new rule
will mean large raises for hourly workers.
     They're wrong. For employers currently offering
stock options, the higher cost of overtime will lead
many of them to cut back on the use of hourly
workers  in effect, shrinking their employees' pay.
For start-ups and other businesses that are
considering offering options to their hourly workers,
the new federal rules will make it more complicated
(estimating the net present value of stock options of
not yet public companies can be very difficult) and
more costly (who wants to pay $15 an hour overtime
instead of $9?). That means new businesses
probably won't offer options to the guys on the shop
floor  leaving them out of the greatest bull market
in American history. Some benefit.

...

     Richard Miniter is a visiting fellow at the
Lexington Institute.

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