President Obama has sent word to the Labor Department to rework the rules on overtime pay, which should raise wages for workers who, up to this point, are considered exempt from the extra income.
Republicans in Congress have already stated that they plan to fight the President’s efforts to raise the federal minimum wage from $7.25 to $10.10. As a result, the President is turning to executive order, which will make “several million” fast-food workers, loan officers, managers of various sort, and others eligible for overtime. At the moment, the rule says that if someone is an “executive or professional” worker, they’re exempt from overtime. Of course, many businesses classify workers as “executive or professional” to avoid paying them more.
The measure is also in keeping with the President’s stated effort to begin the process of closing the wage and inequality gap in this country that stifles the financial ambitions of many lower-income, middle class and working class Americans.
“We need to fix the system so folks working hard are getting compensated fairly,” said Labor Secretary Cecilia Muñoz. Critics say that raising wages will force businesses to cut workers.
Over the past 30 years, The New York Times says, corporate profits have skyrocketed while the share of gross domestic income that went to workers fell to a record low of 42 percent in 2012. At the moment, if a salaried worker is making $455 per week or less, they must be given time-and-a-half for overtime if the additional time is put in. That figure was put in place in 2004.
Economists don’t yet agree on what the outcome of this will be. But NPR says, “… [A] ‘supervisor’ could earn as little as $24,000 a year, while working well beyond 40 hours. In some cases, such a worker might put in enough hours to end up getting paid — in effect — less than the minimum wage.” In that case, not only is this person not even earning a living wage, they’re not left with enough time to get a second job or start a little something on their own to supplement their income. This is untenable.
Overtime is sounding pretty good to us.