— by Nick Hanauer, via Democracy for America
President Obama and the Department of Labor just proposed giving millions of Americans a raise, increasing the overtime threshold from $23,600 a year to $50,440. From the fearful squawks coming from the U.S. Chamber of Commerce and other business lobbyists you’d think the sky was falling.
But all this trickle-down scare-talk about job-killing regulations and unintended economic consequences is just that — trickle-down scare talk — without an ounce of empirical data to back it up.
Business lobbies are already hollering this will kill jobs. Baloney. We call it: Chicken Little Economics.
Far from the end of the world, middle-class Americans never did better than when the overtime threshold — the annual salary below which workers are automatically entitled to time-and-a-half overtime pay — was at its peak.
President Obama’s plan is a courageous step in the right direction. It’s like a minimum wage hike for the middle class. The Department of Labor has started the rule-making process to make the increase official. They’re taking public comment right now, and we need you to let them know you support it.
A half-century ago, more than 60 percent of salaried workers qualified for overtime pay. But after 40 years in which the threshold has been allowed to steadily erode, only about 8 percent do. If you feel like you’re working longer hours for less money than your parents did, it’s probably because you are.
The erosion of overtime and other labor protections is one of the main factors leading to worsening inequality. But a higher threshold would help reverse this trend.
Under the higher salary threshold, employers would have a choice: They could either pay you time-and-half for your extra hours worked, or they could hire more workers at the standard rate to fill your previously unpaid hours. Employers could put more money into your pockets, or put more leisure time at your disposal while directly adding more jobs. And either would be great for workers and great for boosting economic growth.
Here’s why the right-wing and the business lobbyists are wrong about overtime. Lower- and middle-income workers don’t stash their earnings in offshore accounts the way CEOs do . When workers have more money, they spend it. Businesses have more customers; and when businesses have more customers, they hire more workers.
A higher overtime threshold would increase total employment, tightening the labor market and driving up real wages for the first time since the late 1990s.
Conservative pundits and politicians will attempt to preserve the status quo by warning that a return to more reasonable overtime standards would somehow cripple our economy, hurting the exact same workers we intend to help.
But that’s what they always warn about every regulation – from the minimum wage, to Obamacare, to child labor laws. Yet it never turns out to be true. And trickle-down economics looks more like Chicken Little Economics with every passing day.
Thank you for taking a stand against income inequality.