By Paul Waldman
The Washington Post
Last week President Barack Obama announced he will raise the threshold for overtime pay in American workplaces.
Under the Fair Labor Standards Act, employers have to provide overtime pay (usually time and a half) to employees who work more than 40 hours a week, but executives and managers are exempt, as are those who make higher salaries. The trouble is the rules don't account for inflation and so, over time, what constituted a higher salary became absurdly low.
The threshold has been raised only once since 1975; today it stands at less than $24,000, or lower than the poverty level for a family of four.
Here's how Obama described the change he will be making:
"We've got to keep making sure hard work is rewarded. Right now, too many Americans are working long days for less pay than they deserve. That's partly because we've failed to update overtime regulations for years — and an exemption meant for highly paid, white-collar employees now leaves out workers making as little as $23,660 a year — no matter how many hours they work."
His plan will affect nearly 5 million workers -- all salaried workers making up to about $50,400 -- in 2016. "That's good for workers who want fair pay, and it's good for business owners who are already paying their employees what they deserve — since those who are doing right by their employees are undercut by competitors who aren't," Obama said. Some Democrats on Capitol Hill worried the administration was going to propose a lower overtime threshold, something like $42,000 a year. A group of liberal senators urged Obama to set the threshold at $54,000 and that it be pegged to increase with inflation, an absolutely critical provision that would give the measure lasting effect.
Obama didn't raise the threshold as far as they wanted but he is pegging the overtime threshold to the 40th percentile of incomes.
As much as Republicans will object, they can't expect their next president will undo this action. Try to imagine a President Rubio or Walker announcing that he was taking overtime pay away from millions of lower-middle-class U.S. workers. It won't happen.
One way to think about the contrast between what Republicans and Democrats offer on the economy is that Republicans say they'll get you as far as your employer's door, while Democrats want to walk inside with you.
Democrats argue that government has to come inside to make sure people are treated fairly. So they want to increase pay, provide family and sick leave, allow workers to bargain collectively, and make sure no one is discriminated against.
The Republican counter, of course, is that all those things increase costs to employers and therefore cost jobs. But their argument presumes there's nothing fundamentally wrong with the American workplace, which most of us know just isn't true. Yes, many employers already treat their employers well. But millions don't and would treat their workers even worse if they could get away with it.
As for this measure, we know exactly what employers will say: This will cost us money, which means fewer jobs. But let's turn it around. What if employers said, "We could save money by removing employee bathrooms and telling our workers to wear Depends to the job. And that would mean we'd be able to hire more people." Would we respond, "Well, if it would save you money and produce a few more jobs, then that sounds great?" Of course not. The short-term cost to employers of a regulation is certainly something to consider, but it's not the only thing to consider.
The change to overtime regulations isn't some kind of dramatic transformation. Like increasing the minimum wage, it's nothing more than taking an existing rule and updating it for inflation. It's built on the assumption that the government should come into the workplace and make sure that what happens there is fair.
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