The heart of the progressive argument about income inequality is that for decades now (with a brief hiatus in the 90s) low-to-moderate income workers have been slowly losing ground to higher living (and borrowing) costs and stagnant wages even as people at the top have harvested rich gains in income and assets. So unless it’s all talk, you’d expect a progressive president to take small available steps to halt the erosion of earning capacity for the unlucky many.
That happened today when the president ordered the Labor Department to develop new regulations on overtime pay. Currently employers are given considerable leeway in classifying jobs as “managerial” and thus exempt from overtime pay requirements—unless the job earns less than $455 a week. Since that figure (which hasn’t been raised in a decade) means an annual income under the federal poverty line, it’s clear more and more people are slipping into that region where heavy uncompensated overtime is a strong possibility.
The only defense that seems plausible for resisting this step is the plenary argument that businesses just can’t afford spending any more money or hiring any more people, which quickly translates into an objection to any federal labor regulations at all. Won’t the market provide?
I’ve argued for a while now that the aspect of a sluggish, high-unemployment economy that never gets ink even though it’s a huge reality for millions of people is the temptation it provides to employers to abuse the help. Classifying your job as “managerial” (you know, janitors suddenly becoming “sanitation engineers” with no pay hike) and then demanding more hours is a classic example. Since the subject is indisputably within the regulatory powers of the Labor Department, reopening the definitions and thresholds is indisputably a legitimate exercise of regulatory powers (after all, W. raised the threshold for the overtime exemption last time that happened).
But I suspect the news will be greeted with more cries of “tyranny,” as employers struggle to comply with the radical socialist idea of the forty-hour work week.
Feed the Political AnimalDonate
Washington Monthly depends on donations from readers like you.