The U.S. economy has made significant strides since the depths of the Great Recession, but broad prosperity remains elusive for middle class Americans. As a nation, we’re working harder than ever, but we seem to have less and less to show for it.
Republicans in Congress have long been against common sense ideas—even bipartisan ones like investing in infrastructure—that would create jobs and bolster middle class incomes. Instead, they’ve been intent on dismantling the Affordable Care Act and rolling back Wall Street regulations.
As I’ve traveled the country over the past year and talked to Americans about what they’d like to see from their government, no one has asked for Washington to give Wall Street another break, shut down the Department of Homeland Security or vote to repeal the Affordable Care Act—56 times. Instead, I’ve heard time and again from families whose finances are too tight, and from workers who haven’t gotten a raise in far too long. While traveling to South Carolina, Iowa and New Hampshire in the weeks ahead, I’ll continue talking to Americans about what Democrats can do to build an economy that works for all Americans.
Unfortunately, Republicans’ aversion to compromise means that many of the common sense economic policies that would most effectively help middle class families make ends meet, like paid family leave and ensuring equal pay for equal work, are stuck in the mud—just like Americans’ wages.
But that doesn’t mean that there’s nothing to be done right now.
For 76 years, federal law has required that certain workers be paid time and a half for overtime when they work beyond a 40-hour week. The premise is simple: If you work more, you should get paid more. But this salary threshold hasn’t been raised in a meaningful way since 1975. It’s been eroded by inflation, undermined by the changing structure of our economy, and failed to put money in the pockets of workers going above and beyond.
Today, the law only requires overtime pay for salaried workers making less than $455 a week—that’s below the poverty line for a family of four. Unless you are already working at poverty wages, you don’t receive time-and-a-half for extra work, like your parents did.
It’s not right. It’s not fair. It’s not good for the middle class. And it’s not good for the economy.
That’s why the Obama administration should propose a bold increase in the overtime pay threshold—and why they should act on it now.
First, the administration should propose raising the weekly earnings threshold to receive overtime to $1,000 a week—and not a dollar less. That would means workers earning up to $52,000 a year would once again be eligible for overtime pay, which is what the threshold would have been had it kept pace with inflation over the last four decades. At least six million Americans would benefit, receiving the compensation they’re owed for extra hours on the job.
Second, the Obama administration shouldn’t continue to wait to propose new overtime rules. While the administration has long been working on an update, their timetable has repeatedly slipped.
What’s behind the delay? To start, the administration has faced vocal opposition from business groups like the Chamber of Commerce. The Chamber named opposing new overtime rules a major priority, claiming expanded overtime will hurt workers and businesses alike. In fact, Chamber CEO Tom Donohue has broadly targeted “a whole host of issues” regarding labor protections to “aggressively target” this year, because he believes they would “hurt our economy and throw people out of work while achieving little or no benefit.”
But Donohue has it backward: It’s the status quo that’s giving workers a raw deal and holding back economic growth. Americans’ pay as a share of the economy hit a 65-year low in 2013—the same year corporate profits hit an all-time high at $1.7 trillion. Businesses are thriving, yet too many are choosing not to share that success with the employees that make it possible.
Time and time again, we’ve seen conservatives trot out trickle-down economics as a reason to slow down, water down or put down common sense policies that would rebalance our economy and empower middle class Americans. And time and time again—for the better part of 40 years—we’ve seen trickle-down economics benefit the best-off among us and leave everyone else behind.
The truth is this: A strong middle class is the source of sustained economic growth and generational prosperity. Raising the overtime threshold would ensure that millions of Americans, especially women and younger workers, receive the compensation they’re owed for putting in extra hours at work instead of spending it with their families. It would create new jobs, as employers who are reluctant to pay overtime hire new workers instead. And it would represent a step forward for the millions of hardworking families whose paychecks no longer stretch far enough to adequately save for retirement, pay for their children’s educations or start their own businesses.
Given the deep gridlock in Washington, we need to take bold action wherever we can to ensure the recent economic growth and booming business profits are shared by American workers. The middle class deserves a raise, and the Obama administration ought to deliver without delay.