Time For Time-And-A-Half
Millions of Americans just got a raise. Their first 2015 paycheck will be substantially bigger in many states, as new minimum wages take effect. This is great news for those at the bottom of the pay scale, and it will likely generate some upward pressure on those making slightly more than minimum wage as well. The supervisors of minimum-wage earners will demand to be paid more than those they are supervising, and the managers of the supervisors will use the same logic. J.F.K.'s "rising tide" will lift a lot of boats, in other words. But there's an even bigger change coming soon for those in the middle class, which should help to rectify the problem of income equality for tens of millions of hard-working Americans. The big change that President Obama is going to soon unveil is an update of the mandatory overtime rule.
Labor law states that below a certain income, a worker cannot be called "salaried" and is in fact an "hourly" worker. This sounds like a technical distinction, but it's really not. An hourly worker must be paid for every hour he or she works, and if they work over 40 hours per week, they start earning overtime -- "time-and-a-half," or 150 percent of their base hourly pay. A salaried worker, on the other hand, is considered a professional and is paid at a yearly rate -- meaning their paycheck is the same every pay period no matter how many hours they put in. In the real world, this means their employer can require them to work 50 or 60 hours a week for absolutely zero extra pay.
The problem with the system is that the baseline has only changed once since 1975 and remains staggeringly low. Anyone making less than $23,660 a year is required to be paid mandatory overtime. Anyone making above this figure can't claim mandatory overtime. Back in the 1970s, this figure meant that a full 65 percent of workers were under the mandatory overtime threshold. Today, it only covers 11 percent. President Obama is reportedly about to change this rule, to update it for all the inflation since the 1970s.
The only argument right now seems to be how high to raise it. Various figures are being bandied about, from a low of $41,000 to a high of $69,000. Updating the figure for inflation since the 1970s would put it roughly at $51,000, but to cover the same percentage of the workforce it would need to go up past $60,000. But whatever the final figure is, it is going to be an immediate boost to millions upon millions of lives. Workers are either going to get more money in their paycheck, or they're going to get more time to spend with their families -- a real win-win situation, no matter what their employers do.
Business owners will be faced with a choice. They can either pay fairly for the labor their workers provide, or they can cut their workers' hours and hire more workers. Either one is going to be a boost to the economy. Either wage-earners will have more cash to spend or save, or more people will have jobs. Since some employers will choose one and some the other, it is likely to cause more employment and rising wages, so the economy will get better in two ways. In addition, the problems of wage stagnation and income inequality will also be improved.
While raising the minimum wage is popular just about everywhere (in the last election, minimum wage hikes won on the ballot everywhere they were proposed, including some awfully red states), its effect on those making more than the lowest wages is modest. But changing the overtime rules will directly affect people smack in the middle of the middle class. If the threshold is raised to $50,000 or $60,000, that's going to affect a lot of teachers, cops, nurses, firefighters, and all the rest. The worst-case scenario for these folks is that they start working 40-hour weeks instead of having to put in 50 or 60 hours (for no additional pay). Even this will improve peoples' lives -- even if they don't get a bigger paycheck.
The truly beautiful thing about raising the bar for mandatory overtime is that President Obama can accomplish it on his own -- without being blocked by the Republicans in Congress. Reportedly, Obama is poised to act sometime between now and February, so perhaps he'll announce it in his State Of The Union address later this month. A proposed new threshold will be publicly announced, and then there will be a feedback period of a month or so before the regulation is made final.
It will be interesting to see how Republicans react. This one rule change would accomplish so much for so many that it'll be tough for Republicans to make the case against it. They'll be arguing for keeping the profits of the one percent as high as possible while allowing middle class workers to be exploited. They'll have to argue against the obvious positive effects of the new threshold -- an increase in jobs, and an increase in disposable income for the middle class. That's not a very populist argument to make, and it's not going to be a very popular one either. Unlike some abstract economic and governmental theories, the working public is going to see this issue as one directly affecting their paycheck and their livelihood. The most the Republicans will be able to do is to argue to lower the proposed bar a little bit -- and even that's going to be a hard sell with the public.
It's time for millions of hardworking Americans to get the time-and-a-half they really should have been getting all along. It's time for people to be paid what their labor is worth -- every hour of it. It's time for people to see how government rule changes can directly benefit them and their families. And it's time for them to see who is truly fighting on their side -- and who is fighting against their interests and for the one-percenters.
-- Chris Weigant
Follow Chris on Twitter: @ChrisWeigant
This is getting a lot of play everywhere right now. About time, to my thinking.
You're calling this one well and explaining it clearly, CW. Thanks.
Best thing since sliced bread - save it until after the election.
10,000 Quatloos says that Republicans support this measure as you have outlined it here...
I mean, as you have outlined it, this isn't the BAIT AND SWITCH like the minimum wage issue...
If Obama proposes it just as you have outlined it, with the figures that you have used, I am betting the GOP will get behind it..
The only question is, will they get any credit for getting behind Obama on it?? :D
Michale
The only question is, will they get any credit for getting behind Obama on it??
it's an excellent idea, both for the country and its economy. however, time and a half would necessarily require more expenditure on salary, whether by hiring new workers or by paying current workers for their extra time. either way it would cut into corporate profits of campaign donors, meaning neither obama nor the republicans in congress will likely want to see this passed.
JL
looks like i got my italics reversed. ah well.
looks like i got my italics reversed. ah well.
Had me going there for a moment.. :D
meaning neither obama nor the republicans in congress will likely want to see this passed.
Now, now, Joshua... Don't be doing my job for me.. :D
But seriously, I see your point.
There IS a downside to the 1%'ers...
Michale
"either way it would cut into corporate profits of campaign donors, meaning neither obama nor the republicans in congress will likely want to see this passed."
JL, while I agree that corporations will be opposed because they're greedy and the GOP will oppose anything that the black tyrant proposes, why would BHO even propose a rules change that he doesn't want? He's not proposing legislation that the GOP would just ignore. Are you saying that you think he's hoping for a huge public uproar that will kill this idea?
"It will be interesting to see how Republicans react."
I don't think it will be interesting. I think their reaction will be fact-free and predictable - they will call it a job killer.
"Facts are stupid things." - Ronald Reagan
Of course, the GOP could always legislate if they don't like it, but nobody should hold their breath waiting for that to happen.
JFC,
JL, while I agree that corporations will be opposed because they're greedy and the GOP will oppose anything that the black tyrant proposes, why would BHO even propose a rules change that he doesn't want?
"One of the things we're going to have to discuss and debate is how are we striking this balance between the need to keep the American people safe and our concerns about privacy. Because there are some trade-offs involved. I welcome this debate, and I think it's healthy for our democracy."
-Barack Obama
Why would Obama say he wants this legislation when he doesn't really want it??
Because it's politically expedient and politically correct to do so.....
Duh.........
Michale
Because it's politically expedient and politically correct to do so.....
Duh.........
OK, OK... THAT was uncalled for..
My apologies...
Michale
Of course, the GOP could always legislate if they don't like it, but nobody should hold their breath waiting for that to happen.
Oh, the GOP is already legislating...
But it's Obama who is being Obstructionist with his veto pen...
Didn't take long for the Obstructionist label to cross the partisan aisle, eh?? :D
Michale
why would BHO even propose a rules change that he doesn't want?
on some level I'm sure he wants it, in a pie in the sky, gee that'd be nice sort of way. but when the rubber meets the road this president (and any other politician in this climate) will abandon principle for the practicality of placating big campaign donors.
JL
on some level I'm sure he wants it, in a pie in the sky, gee that'd be nice sort of way. but when the rubber meets the road this president (and any other politician in this climate) will abandon principle for the practicality of placating big campaign donors.
Truer words were never spoken...
Michale
"Stuart, don't agree with me. It just makes me doubt myself."
-Michael J. Fox, SPIN CITY
:D
Michale
"when the rubber meets the road this president (and any other politician in this climate) will abandon principle for the practicality of placating big campaign donors"
JL,
OK. Let's try another approach. I'll quote CW.
"The truly beautiful thing about raising the bar for mandatory overtime is that President Obama can accomplish it on his own -- without being blocked by the Republicans in Congress."
So, what are you saying? That CW is telling us about something that he will never actually propose? That he will propose this rule change and then during the one month feedback period he'll say "nevermind"? Something else? That's what I'm asking.
To be perfectly cynical about the whole thing....
This is one of those perfect distraction issues. Depending of course on how it is presented I can see the situation arise that congress raises a great hue and cry over how the president is committing executive overreach, this is a job killer, blah,blah blah. The left will also raise it's hue and cry that the republicans are not looking out for the average Joe, this is something to help the middle class, blah, blah, blah. While all of this is occupying the punditocracy and the media spins it as they are want to do we can expect some truly odious piece of legislation to slip through un-noticed (I.E. approval of "Fast Track" status for the TPP). It would not be the first time that corporate interest blocks of both parties have used the cover of a populist or galvanizing issue to slip something under the radar that would not have a snowballs chance in Florida of passing if it was to receive the debate and scrutiny it normally would have with out the distraction issue occupying all of the airwaves.
Don't get me wrong I hope that this gets done as the overtime adjustment is sorely needed and in short order will help the economy improve as well as improving peoples lives. It has just been too long since the corporate power blocks from either party have legislated strictly for the good of the people....
So, what are you saying? That CW is telling us about something that he will never actually propose? That he will propose this rule change and then during the one month feedback period he'll say "nevermind"?
no, i'm saying the likeliest scenario is that the president chooses NOT to flex the muscles of the executive branch on this issue, instead letting it die and blaming congress for its failure. sure, he'll SAY how great it would be and how awful it is that congress is blocking it. CW is right of course, that if the president REALLY wanted it to happen, then it would. what i'm saying is that i'm not so convinced that he's as committed to successful action on the issue as he is to using it to score political points.
JL