Final answer:
The statement that a person is entitled to 1.5 times their regular pay for hours worked over 40 in a week is usually true under overtime pay regulations like the FLSA. However, not all employees qualify and laws can vary regionally. The effect of higher wages on hours worked can be complicated due to individual choices and varying incentives.
Step-by-step explanation:
If a person works over 40 hours in a week, they are entitled to 1.5 times their regular pay for the extra hours. This statement is generally true and is a principle known as overtime pay. Overtime pay requirements are mandated by laws such as the Fair Labor Standards Act (FLSA) in the United States. This law states that non-exempt employees must be paid overtime at a rate of one and a half times their regular rate of pay for all hours worked over 40 in a workweek. However, not all workers are eligible for overtime pay; exempt workers, including certain white-collar jobs and managerial roles, do not qualify under the FLSA. Furthermore, these laws may vary by country, state, or even city.
Considering whether a higher wage will encourage significantly more hours worked for all individuals is complex, as individual preferences and circumstances differ. It may lead some to work more to increase their income, while others may choose to maintain the same hours or even work less, valuing leisure time or facing diminishing marginal returns on additional hours worked. Economic data from the Bureau of Labor Statistics indicates the average number of hours worked by American workers, but does not directly provide insight on individual responses to wage increases.
The poverty trap scenario illustrates another angle of this complexity, where individuals on fixed guaranteed incomes may find little incentive to work more hours if the additional income gained is marginal compared to the effort required. On the other hand, for minimum wage workers, an increase in wage can mean a net gain in income even if they work fewer hours, as seen when a minimum wage raise results in more income despite a reduction in hours demanded by employers.