Is Obama Giving Lip Service or Showing Leadership on Overtime Pay?

Stopgap: Obama signs two-week CR.
National Journal
Ron Fournier
Add to Briefcase
Ron Fournier
March 12, 2014, 5:29 a.m.

Per­son­al ex­per­i­ence and re­search tell me that many U.S. busi­nesses rob their hard­est-work­ing em­ploy­ees of over­time pay by du­bi­ously call­ing them “ex­ec­ut­ives” or “pro­fes­sion­als.” Pres­id­ent Obama says he wants to fix the prob­lem, and he has the power to do so. How this is­sue plays out will be a test of his will, of his word, and of his abil­ity to fully ex­ecute the powers of the pres­id­ency.

Can he lead or just give lip ser­vice?

At is­sue are the over­time pro­vi­sions of the Fair Labor Stand­ards Act, which Con­gress ori­gin­ally passed in 1938. Each pres­id­ent in­ter­prets and ex­ecutes the law dif­fer­ently. For in­stance, Pres­id­ent Bush in 2004 gave busi­nesses more lat­it­ude to clas­si­fy em­ploy­ees as white-col­lar work­ers ex­empt from over­time pay. Uni­ons ob­jec­ted.

Now it’s Obama’s turn. Ac­cord­ing to The New York Times, he has ordered the Labor De­part­ment to over­haul its reg­u­la­tions un­der the 1938 law to:

  • Sig­ni­fic­antly in­crease the salary level be­low which work­ers auto­mat­ic­ally qual­i­fy for over­time. Cur­rently, em­ploy­ers can­not deny time-and-a-half pay for any salar­ied work­er who makes less than $455 per week.
  • Re­quire that em­ploy­ees per­form a min­im­um per­cent­age of “ex­ec­ut­ive” work be­fore they can be ex­emp­ted from over­time pay. Cur­rently, a busi­ness needs only to de­clare that a work­er’s primary re­spons­ib­il­ity is ex­ec­ut­ive, such as over­see­ing a cleanup crew. In oth­er words, the play­ing field is tilted to­ward the em­ploy­er who has a fin­an­cial in­cent­ive to de­clare vir­tu­ally any­body an over­time-ex­empt “pro­fes­sion­al” or “ex­ec­ut­ive.”

Demo­crat­ic eco­nom­ists Jared Bern­stein and Ross Eis­en­brey urged the ad­min­is­tra­tion last year to raise the salary threshold for over­time pay to $984 a week, mak­ing as many as 5 mil­lion more work­ers eli­gible. (Dis­clos­ure: I play pickup bas­ket­ball with Bern­stein and Eis­en­brey, and con­sider them both friends.)

As the New York Times story by Mi­chael Shear and Steven Green­house makes clear, it’s too soon for over­time pro­ponents to cel­eb­rate:

The pro­posed new reg­u­la­tions would in­crease the num­ber of people who qual­i­fy for over­time and con­tin­ue Mr. Obama’s fight against what he says is a crisis of eco­nom­ic in­equal­ity in the coun­try. Changes to the reg­u­la­tions will be sub­ject to pub­lic com­ment be­fore fi­nal ap­prov­al by the Labor De­part­ment, and it is pos­sible that strong op­pos­i­tion could cause Mr. Obama to scale back his pro­pos­al.

The pro­pos­al is cer­tain to be strongly op­posed by the U.S. Cham­ber of Com­merce and oth­er busi­ness in­terests, in­clud­ing some who donate money to Demo­crat­ic causes. For all its talk of in­come equal­ity, the White House cov­ets the deep pock­ets of lob­by­ists, bankers, CEOs, and oth­er gil­ded elites. Cav­ing is al­ways a pos­sib­il­ity.

In ad­di­tion, Obama and his team have not been ad­ept at man­aging the fed­er­al bur­eau­cracy or tog­gling the levers of power. The pres­id­ent’s vaunted “pen and phone” cam­paign prom­ises a smarter use of ex­ec­ut­ive au­thor­ity, but so far most of the muscle-flex­ing is re­served for delay­ing and wa­ter­ing down Obama­care. Fum­bling the ball is not out of the ques­tion.

In a sign of its flex­ib­il­ity, the White House has not em­braced the $984 per week mark put for­ward by the Demo­crat­ic eco­nom­ists. It would not be out of form for Obama to prom­ise a big change, grab a Times head­line, and walk away from mean­ing­ful re­form

Un­like some oth­er Demo­crat­ic ideas, Re­pub­lic­ans can’t stretch the truth far enough to cred­ibly call this idea so­cial­ism or wel­fare. It’s as Amer­ic­an as apple pie: If you work hard, you get paid for it — and that’s not hap­pen­ing now. As The Times put it:

Since the mid-1980s, cor­por­ate profits have soared, reach­ing a post-World War II re­cord as a share of eco­nom­ic out­put. The profits of the com­pan­ies in the Stand­ard & Poor’s 500 have doubled since the re­ces­sion ended in June 2009, but wages have stag­nated for a vast ma­jor­ity of work­ers in the same peri­od. Re­cently, work­ers’ wages fell close to an all-time low as a share of the eco­nomy.

In 2012, the share of the gross do­mest­ic in­come that went to work­ers fell to 42.6 per­cent, the low­est on re­cord.

None of this ex­cuses Obama from his re­spons­ib­il­ity to sell the Amer­ic­an people on the rule change — what he’s do­ing and why. The worst thing Obama could do about over­time pay is let the status quo stand. The second worst thing he could do is change the rule without build­ing sup­port for it. Con­gress could re­verse the reg­u­la­tion, es­pe­cially if the Re­pub­lic­ans win the Sen­ate in Novem­ber. So could the next pres­id­ent.

Let’s hope the White House works over­time to get this right.

What We're Following See More »
$618 BILLION IN FUNDING
By a Big Margin, House Passes Defense Bill
1 days ago
THE DETAILS

The National Defense Authorization Act passed the House this morning by a 375-34 vote. The bill, which heads to the Senate next week for final consideration, would fund the military to the tune of $618.7 billion, "about $3.2 billion more than the president requested for fiscal 2017. ... The White House has issued a veto threat on both the House and Senate-passed versions of the bill, but has not yet said if it will sign the compromise bill released by the conference committee this week."

Source:
SUCCEEDS UPTON
Walden to Chair Energy and Commerce Committee
1 days ago
THE DETAILS

"Republicans have elected Rep. Greg Walden (R-OR) the next chairman of the powerful House Energy and Commerce Committee. Walden defeated Reps. John Shimkus (R-IL) and Joe Barton (R-TX), the former committee chairman, in the race for the gavel" to succeed Michgan's Fred Upton.

Source:
BIPARTISAN SUPPORT
Senators Looking to Limit Deportations Under Trump
2 days ago
THE DETAILS

"Democratic and Republican members of the Senate Judiciary Committee are working on legislation that would limit deportations" under President-elect Donald Trump. Leading the effort are Judiciary Committee members Dick Durbin (D-IL) and Lindsey Graham (R-SC). Sen. Jeff Flake (R-AZ) is also expected to sign on.

Source:
REQUIRES CHANGE IN LAW
Trump Taps Mattis for Defense Secretary
2 days ago
BREAKING

Donald Trump has selected retired Marine Gen. James 'Mad Dog' Mattis as his secretary of defense, according to The Washington Post. Mattis retired from active duty just four years ago, so Congress will have "to pass new legislation to bypass a federal law that states secretaries of defense must not have been on active duty in the previous seven years." The official announcement is likely to come next week.

Source:
MEASURE HEADED TO OBAMA
Senate OKs 10-Year Extension of Iran Sanctions
2 days ago
THE LATEST
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login