Economist 5/24/16

  1. Currently, employees earning over $23,660 are not eligible for overtime pay, a mandatory 50% wage bump for work in excess of 40 hours per week. Inflation has put most over this level: in 1975 62% of full-time salaried workers were eligible; today just 7% are. From December, the White House has announced, the threshold will rise to $47,476. That will probably boost the earnings of existing employees slightly, though firms are likely to cut wages for new recruits to keep costs down. They may also be discouraged from allocating workers more than 40 hours. That will hurt some. A slightly higher federal minimum wage would be a less risky route to higher pay. But changes to overtime rules, unlike the minimum wage, do not require the consent of Congress.
  2. According to one survey (admittedly conducted by a travel firm, with an interest in gaining publicity) perhaps half of British office workers check their e-mails while on holiday. Yet, few people deny the benefits of cutting those electronic ties when on vacation—both to the company and the employee—through the greater productivity of less-stressed staff when they return. Indeed, one paper by the University of California at Irvine went even further, suggesting people do not necessarily even need the holiday itself to unwind. All they need is an extended break from e-mail to get the same benefit. In a strategy adopted by Daimler, it gives workers the option of automatically deleting the e-mails they receive while they are on holiday, instead sending an auto response informing the correspondent what has happened and suggesting he resends it when they return.
  3. Extortion is an unavoidable feature of life in El Salvador. A vast, meticulously organised network touches every business, from kerbside tortilla-sellers to multinationals. Large stretches of country, including the centre of the capital city, are controlled by the Mara Salvatrucha gang and two factions of Barrio 18. Salvadorean authorities estimate that 60,000-70,000 people belong to gangs and that half a million more—relatives, business partners, corrupt politicians and police—are financially dependent on them.Salvadoreans pay $756m a year, about 3% of GDP, to gangs, according to a study by the country’s central bank and the UN Development Programme. El Salvador’s shockingly high murder rate is largely due to wars between them for control of territory.The study estimates that the total cost of violence, including the amount households spend on extra security and the lost income of people deterred from working, is nearly 16% of GDP, the highest level in Central America.
  4. El Salvador’s gangs have neither the wealth nor the political clout of Mexico’s drug-traffickers. Gangs may now be using the money harvested from extortion to build up capital.Today’s gangland has its origins in Los Angeles, where the Mara Salvatrucha and Barrio 18 formed and from which they were deported by Bill Clinton’s administration in the 1990s.Francisco Flores, El Salvador’s president in the early 2000s, responded with a “mano dura” (iron fist), locking up thousands of gangsters, separately by gang, which increased the prison population by half.The gangs’ leaders began co-ordinating their activities nationwide from within prison.Extortion, which requires nothing more than muscle and a mobile phone, was the obvious way to make money.The 12-year war between El Salvador’s right-wing government and leftist guerrillas, which ended in 1992, had left ex-combatants without work, assault weapons without proper oversight and tens of thousands of Salvadoreans accustomed to taking orders from guerrillas or local security forces. The emerging extortion networks did not lack manpower.
  5. With buses, the involuntary partnership begins when a “neighbourhood kid approaches you with a ringing mobile phone”, says the route’s “negotiator”A tough negotiator can bargain down la renta: Barrio 18 demanded $1,800 at first for the old lady’s packet. But those who refuse to pay can expect no mercy. In 2015, 93 transport workers were murdered and 134 buses were attacked.Transport is the most visible victim, but extortion spreads far beyond it. Gangsters control the entrances to urban slums, checking identity cards and demanding payment from residents.The National Council of Small Businesses, which has more than 10,000 members, says that 79% make extortion payments but only 16% report the crime.Bigger firms can afford more security and summon help from the government.Budding alliances between gangs and the economic and political elite will make dismantling the extortion networks harder.In a country where a quarter of people aged 15 to 29 are neither working nor in school, that is hard. The government has spent little money on programmes to employ gangsters or youngsters at risk of becoming one.

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