What others say: When people work, they should be paid for it

  • Tuesday, June 14, 2016 4:33pm
  • Opinion

The snapshot view of the US economy is, mostly, a comforting one: Unemployment has steadily fallen, inflation is almost nonexistent, consumer spending in April rose at the fastest rate since 2009, and the housing market remains solid. But the picture is missing something essential: higher wages. For many workers, a pay raise is a fading memory. Household incomes have largely been stagnant for years, exacerbating an already yawning gap between the nation’s economic elite and most everyone else.

President Obama has repeatedly railed against the injustice of income inequality, but he stands no chance of coaxing Congress into doing anything meaningful about it. Recognizing that political reality, Obama wisely exerted his executive powers last month, unveiling a change in federal rules that govern who qualifies for overtime pay. The regulations, which are scheduled to take effect Dec. 1, mark a desperately needed win for lower-level employees who are paid by salary and don’t receive a dime extra when they log more than 40 hours in a week. Under the new regulations, salaried employees earning less than $47,476 annually, or $913 weekly, will have to be paid time-and-a-half after 40 hours. That’s a significant increase from the current threshold of $23,660, which has been updated just once since the 1970s — a number so pitifully low that it doesn’t meet federal poverty guidelines for a family of four, never mind qualify as managerial-level pay.

In his weekly radio address on May 21, Obama noted that four decades ago, more than 60 percent of American workers qualified for overtime based on their salary level, compared with a mere 7 percent now. The rule change will increase that to 35 percent, according to the Department of Labor, adding 4.2 million people to the ranks of overtime-eligible — including 83,500 in Massachusetts. Obama called it “the single biggest step I can take through executive action to raise wages for the American people.”

Predictably, it didn’t take long for business groups, both locally and nationally, to start complaining that the revision creates an economic hardship for them. Some said the requirement will force them to cut employees’ base pay as a way to avoid added payroll costs. That’s nonsense — the Labor Department estimates workers collectively will earn $12 billion more over the next decade because of the revision, a big-sounding number that actually is a tiny fraction of the country’s overall wages.

The National Retail Federation had the audacity to claim that the change will limit employees’ opportunities for career advancement “by taking away their ability to use their own discretion in deciding whether to put in the extra hours sometimes needed to do their jobs.” Translation: Companies that are wrongly profiting from free labor won’t be able to do so any longer.

It may well turn out that certain salaried employees covered by the overtime expansion don’t end up taking home heftier paychecks on a regular basis — employers might sometimes decide to limit their hours instead of paying overtime. Others may opt to give workers pay raises to push them above the $47,476 overtime threshold. The new requirements might even lead to the creation of more jobs. A Goldman Sachs analysis of what happened in 2004 — the last time the overtime threshold was raised — concluded that the adjustment coming in December might compel businesses to hire about 100,000 additional workers next year instead of increasing their overtime budgets. All of this would further boost consumer spending — which accounts for a whopping 70 percent of the US economy — benefiting the very corporations that now warn Obama’s action on overtime will have dire consequences.

After years of a middle class in retreat, the president’s order is a move in the other direction that does away with an outmoded model of compensation, and acknowledges an undeniable fact — when people work, they should be paid for it.

— The Boston Globe,

June 5

More in Opinion

Deborah Morel’s beachhouse near Ninilchik, Alaska. (Photo courtesy of Deborah Morel)
Voices of the Peninsula: The Dream Team saves the day

The story, I believe, speaks to the goodness of humankind.

teaser
Opinion: The truth Dunleavy should tell about COVID vaccines

Dunleavy made a political calculation to appease his party’s angry base by joining the lawsuits against the mandates.

Laura Black, owner of Fireweed Bakery, sells some of her wares during the Merry Little Christmas Market at the Peninsula Center Mall in Soldotna, Alaska on Nov. 7, 2020. (Photo by Brian Mazurek/Peninsula Clarion)
Opinion: Shop local this holiday season!

By Julie Anderson Shopping locally has never been as important or as… Continue reading

A resident casts their vote in the regular municipal election Tuesday, Oct. 6, 2020 at the Kenai Peninsula Fairgrounds in Ninilchik, Alaska. (Photo by Megan Pacer/Homer News)
Voices of the Peninsula: What do voting statistics say about our democracy?

Kenai Peninsula Borough total voter turnout in this past October 2021 municipal election was a sad 11.84%.

Tease
Opinion: Rural broadband is essential infrastructure

Broadband funding is available. The rest is up to Alaskans.

Nurse Sherra Pritchard gives Madyson Knudsen a bandage at the Kenai Public Health Center after the 10-year-old received her first COVID-19 vaccine on Friday, Nov. 5, 2021. (Camille Botello/Peninsula Clarion)
Alaska Voices: A mom’s and pediatrician’s perspective on COVID-19 vaccines for children

I want to see children and their parents who have yet to get vaccinated roll up their sleeves.

Larry Persily (Peninsula Clarion file)
Opinion: State defends its right to cut nonexistent taxes

This from a state that has no property tax on homes or businesses, only on the oil industry.

Gavel (Courtesy photo)
Opinion: The foolish men claiming self-defense

It’s not just misguided teenagers carrying guns who find themselves in trouble with the law.

Dr. Jay Butler, former chief medical officer for the State of Alaska, is seen in this undated photo. (Courtesy photo)
Alaska Voices: Feeling grateful this Thanksgiving for the COVID vaccines

The COVID vaccines remain our strongest tool in combating the pandemic and helping us return to our lives and the things we love and cherish.

Most Read