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Let’s all screw the 1 percent: The simple move Obama could make to strengthen the rest of us
Let’s all screw the 1 percent: The simple move Obama could make to strengthen the rest of us
12/26/14
You're working more hours and not getting paid for them. We can fix that -- and put more people to work. Here's how
“The economy” in the abstract is doing relatively well, with strong job growth, a booming stock market, and rising GDP. But the American people aren’t feeling it—and Democrats have paid a serious political price as a result—simply because the concrete, individual experience is quite different. Raising the minimum wage is one way to get at the problem—but for a problem that big, it’s a limited line of attack. There are millions of Americans making well more than the minimum wage, yet still doing much worse than their similarly situated parents did a generation ago.
...Although the details are a bit complicated, the bottom line is not: there’s a wage level below which everyone qualifies for mandatory time-and-a-half overtime, even if they’re on a salary, and that level has only been raised once since 1975, with the result that only 11 percent of salaried Americans are covered today, compared to over 65 percent of them in 1975. If you make less than $23,660 a year as a salaried worker, you qualify for mandatory overtime—if not, you’re out of luck. Only those hanging on to the lowest levels of the middle class have those protections anymore. Just adjusting the wage level for inflation since 1975—an act of restoration, not revolution—would be as significant an income increase for millions of middle-class Americans as a $10.10 or even $15 minimum wage is for low-wage workers. It would cover an additional 6.1 million salaried workers (by one account) up to $970 per week, about $50,440 annually—the vast majority of those it was originally designed to protect, but who have slowly lost their protections since the 1970s. Hanauer proposes a slightly greater increase, intended to cover roughly all the workforce that was covered in 1975. That would raise the threshold to $69,000 annually, and would cover an added 10.4 million workers.
“Salaried Americans now report working an average of 47 hours a week—18 percent report working more than 60 hours per week,” Hanauer wrote in a follow-up piece for the Hill in December. “If it feels like you’re working more hours for less money than your parents did a generation ago, it’s probably because you are.” But the solution, as indicated, is simple and the best part is that Congress has absolutely no say in the matter. It’s purely an executive branch decision whether to raise the eligibility level.
Oh, sure, conservatives are bound to yell, “Socialism!” But the original rationale behind the overtime regulations—enshrined in the Fair Labor Standards Act during the Great Depression, along with the minimum wage—comes right out of Adam Smith. Here’s a description from a March 2014 report on the subject from the Economic Policy Institute by Ross Eisenbrey and Jared Bernstein:
The fundamental idea behind overtime coverage, and the minimum wage, is to maintain a basic norm within our labor market. Under certain market conditions, for example when unemployment is high or workers hold especially low levels of bargaining power, employers might be able to require employees to labor long hours without receiving additional compensation. This was, in fact, the case prior to the passage of the FLSA. Congress decided that this was a market failure based on the asymmetrical bargaining positions of affected workers and employers, and thus enacted the OT rules to create a financial disincentive to subject employees to excessive work hours....
http://www.salon.com/2014/12/26/lets_all_screw_the_1_percent_the_simple_move_obama_could_make_to_strengthen_the_rest_of_us/
12/26/14
You're working more hours and not getting paid for them. We can fix that -- and put more people to work. Here's how
“The economy” in the abstract is doing relatively well, with strong job growth, a booming stock market, and rising GDP. But the American people aren’t feeling it—and Democrats have paid a serious political price as a result—simply because the concrete, individual experience is quite different. Raising the minimum wage is one way to get at the problem—but for a problem that big, it’s a limited line of attack. There are millions of Americans making well more than the minimum wage, yet still doing much worse than their similarly situated parents did a generation ago.
...Although the details are a bit complicated, the bottom line is not: there’s a wage level below which everyone qualifies for mandatory time-and-a-half overtime, even if they’re on a salary, and that level has only been raised once since 1975, with the result that only 11 percent of salaried Americans are covered today, compared to over 65 percent of them in 1975. If you make less than $23,660 a year as a salaried worker, you qualify for mandatory overtime—if not, you’re out of luck. Only those hanging on to the lowest levels of the middle class have those protections anymore. Just adjusting the wage level for inflation since 1975—an act of restoration, not revolution—would be as significant an income increase for millions of middle-class Americans as a $10.10 or even $15 minimum wage is for low-wage workers. It would cover an additional 6.1 million salaried workers (by one account) up to $970 per week, about $50,440 annually—the vast majority of those it was originally designed to protect, but who have slowly lost their protections since the 1970s. Hanauer proposes a slightly greater increase, intended to cover roughly all the workforce that was covered in 1975. That would raise the threshold to $69,000 annually, and would cover an added 10.4 million workers.
“Salaried Americans now report working an average of 47 hours a week—18 percent report working more than 60 hours per week,” Hanauer wrote in a follow-up piece for the Hill in December. “If it feels like you’re working more hours for less money than your parents did a generation ago, it’s probably because you are.” But the solution, as indicated, is simple and the best part is that Congress has absolutely no say in the matter. It’s purely an executive branch decision whether to raise the eligibility level.
Oh, sure, conservatives are bound to yell, “Socialism!” But the original rationale behind the overtime regulations—enshrined in the Fair Labor Standards Act during the Great Depression, along with the minimum wage—comes right out of Adam Smith. Here’s a description from a March 2014 report on the subject from the Economic Policy Institute by Ross Eisenbrey and Jared Bernstein:
The fundamental idea behind overtime coverage, and the minimum wage, is to maintain a basic norm within our labor market. Under certain market conditions, for example when unemployment is high or workers hold especially low levels of bargaining power, employers might be able to require employees to labor long hours without receiving additional compensation. This was, in fact, the case prior to the passage of the FLSA. Congress decided that this was a market failure based on the asymmetrical bargaining positions of affected workers and employers, and thus enacted the OT rules to create a financial disincentive to subject employees to excessive work hours....
http://www.salon.com/2014/12/26/lets_all_screw_the_1_percent_the_simple_move_obama_could_make_to_strengthen_the_rest_of_us/
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