Finally, a break
for the middle class
To
see this video directly on YouTube: https://www.youtube.com/watch?v=hWY9xD6rxnE
The U.S. Department of Labor just proposed raising the overtime threshold – what you can be paid and still qualify to be paid “time-and-a-half” beyond 40 hours per week – from $23,600 a year to $50,400.
This
is a big deal. Some 5 million workers will get a raise. (See accompanying
video, which we made last month.)
Business
lobbies are already hollering this will kill jobs. That’s what they always
predict – whether it’s raising the minimum wage, Obamacare, family and medical
leave, or better worker safety. Yet their predictions never turn out to be
true.
In
fact, the new rule is likely to increase the number of jobs. That’s because
employers who don’t want to pay overtime have an obvious option: They can hire
more workers and employ each of them for no more than 40 hours a week.
It’s high time for this change. When the overtime threshold was at its peak a half-century ago, more than 60 percent of salaried workers qualified for overtime pay. But inflation has eroded that old threshold. Today, only about 8 percent of salaried workers qualify.
Overtime
pay has become such a rarity that many Americans don’t even realize that the
majority of salaried workers were once eligible for it.
We
just keep working longer and harder, for less. A recent Gallup poll found that
salaried Americans now report working an average of 47 hours a
week—not the supposedly standard 40—while 18 percent of
Americans report working more than 60 hours a week.
Meanwhile,
corporate profits have doubled over the last three decades – from
about 6% of GDP to about 12% – while wages have fallen by almost exactly the
same amount.
The
erosion of overtime and other labor protections is one of the main factors
worsening inequality. A higher overtime threshold will help reverse this trend.
Finally,
a bit of good news for hard-working Americans.
[This
post is drawn from a piece co-authored with Nick Hanauer with the help of the
Center for American Progress.]
ROBERT B. REICH, Chancellor’s Professor of Public Policy at
the University of California at Berkeley and Senior Fellow at the Blum Center
for Developing Economies, was Secretary of Labor in the Clinton administration.
Time Magazine named him one of the ten most effective cabinet secretaries of
the twentieth century. He has written thirteen books, including the best
sellers “Aftershock" and “The Work of Nations." His latest,
"Beyond Outrage," is now out in paperback. He is also a founding
editor of the American Prospect magazine and chairman of Common Cause. His new
film, "Inequality for All," is now available on Netflix, iTunes, DVD,
and On Demand.
