President Obama Does Something Right

It was back in November on his Facebook page that Clinton 42 Labor Secretary Robert Reich credited business owner Nick Hannauer with the idea that

By executive order the President could raise the salary level at which employers are required to pay employees time-and-a-half for every hour worked beyond 40 hours a week. In 1975, more than 65 percent of salaried workers qualified for such overtime pay, and the threshold for receiving it was $69,000 in today’s dollars. But since then the value of the threshold has eroded to $23,660, so just 11 percent of salaried workers now qualify. If Obama raised the threshold back to the same standard we had in 1975, and everyone earning up to $69,000 got overtime pay, 

President Obama might as well have been listening because on Tuesday good news came when we learned

a long-awaited overtime rule from the US labor department would more than double the threshold at which employers can avoid paying overtime, from $455 a week to $970 a week by 2016. That would mean salaried employees earning less than $50,440 a year would be assured overtime if they worked more than 40 hours per week, up from the current $23,660 a year....

To keep up with future inflation and wage growth the proposal would peg the salary threshold at the 40th percentile of income, individuals familiar with the plan said. They requested anonymity in return for discussing the proposal ahead of the official announcement. The president has been scheduled to promote the proposal during a visit on Thursday to La Crosse, Wisconsin.

Obama’s proposal aims to narrow a loophole that the president has long said some employers exploit to avoid paying overtime.

Employees who make above the salary threshold can be denied overtime if they are deemed managers. Some work grueling schedules at fast food chains and retail stores, but with no overtime eligibility their pay may be lower per hour than many workers they supervise.

The existing salary cap, established in 2004 under George Bush, has been eroded by inflation and now relegates a family of four making just above the cap into poverty territory. Obama has long charged that the level is too low and undercuts the intent of the overtime law.  

"In this country, a hard day's work deserves a fair day's pay. That's at the heart of what it means to be middle class in America," wrote the President Monday for the Huffington Post. Thanks to the Trans-Pacific Partnership (and especially to fast-track, which will assure the TPP and future trade deals will be bad for American workers), fewer Americans will experience that middle class feeling. But for today at least, the President, with the new overtime rule he prompted, has given the middle class a major break or as Reich (his video from May, below) put it Tuesday, "a bit of good news for hard-working Americans."










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