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

Stopgap: Obama signs two-week CR.
National Journal
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 »
AN AGENCY IN TURMOIL
Former Pilot Steve Dickson to Head Federal Aviation Administration
2 hours ago
THE DETAILS

President Donald Trump will nominate former airline pilot Steve Dickson to be administrator of the Federal Aviation Administration, a move that comes amid a major crisis for the agency following the fatal crashes of two Boeing 737 MAX passenger jets in Indonesia and Ethiopia, the White House said Tuesday.

Source:
BOLSONARO MAY ALLOW U.S. FORCES AT VENEZUELAN BORDER
Trump Threatens New Sanctions Against Venezuela
4 hours ago
THE LATEST

"President Donald Trump on Tuesday said he may impose new strict sanctions on Venezuela in another attempt to force President Nićolas Maduro from office. ... Trump’s remarks came during a joint Rose Garden press conference with new Brazilian President Jair Bolsonaro." The two are working on a rocket launch facility in Brazil, and Bolsonaro is weighing whether to allow "U.S. or international forces to mass along his border with Venezuela."

Source:
COMPANY RESTRUCTURING
Paul Ryan to Join Board of Fox Corporation
7 hours ago
THE DETAILS
34 STATES MUST SIGN ON
Scott Walker to Lead Effort for Constitutional Convention
8 hours ago
THE LATEST

"A national group says its campaign to convene an unprecedented U.S. constitutional convention to balance the federal budget has a new leader: former Republican Gov. Scott Walker. The Center for State-led National Debt Solutions on Monday announced Walker will serve as its national honorary chairman. It marks one of the first efforts by Walker to re-enter the political fray since his November election loss to Gov. Tony Evers. In 2017, Wisconsin became the 28th state to request an Article V convention — so named for the article of the U.S. Constitution that sanctions the process." Thirty-four states must sign on to trigger a convention.

Source:
WOULD ALSO LIMIT MONTHLY PAYMENTS
Administration Aims to Cap Student Borrowing
8 hours ago
THE LATEST

"The Trump administration on Monday proposed placing limits on federal student borrowing programs as part of a series of initiatives to amend the Higher Education Act. ... A number of the proposals seek to change the borrowing and loan repayment process. A senior administration official said the White House wants to institute a limit on loans through the PLUS program, which graduate students and parents of undergraduates use to help pay for college or trade school."

The official did not say what the loan cap would be, but that it could vary by program rather than by institution.

The administration is also calling for Congress to simplify loan repayment programs, in part by condensing five income-driven repayment plans into one plan that would cap monthly payments at 12.5 percent of the borrower's discretionary income.

Source:
×
×

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