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“Really Dumb Politics”: The Stupidest Thing GOP Leaders Have Done Lately? Threaten To Take Away Middle Class Overtime Pay

Talk about a political tin ear! Wednesday, House Republican Leader Paul Ryan and Senate Leader Mitch McConnell threatened to take away middle class overtime pay.

Speaking as a Progressive Democrat my response is simple: go ahead — make our day. Talk about bad politics.

Here is the backstory. On Wednesday, the administration announced its final rule revising the threshold used to define who is automatically required to be paid time and a half for overtime when they work more than 40 hours per week.

The Wage and Hour Act that was passed in 1938 requires overtime be paid to almost all hourly workers. But there are exceptions for professional, managerial and executive personnel.

To prevent employers from declaring that people who do ordinary jobs are professional, managerial or executive personnel, the law required the Labor Department to set a pay threshold. If a worker makes less than that threshold, he or she cannot be categorized as a professional, manager or executive, no matter what his or her “duties.”

Three decades ago, when the wage threshold was set, 62 percent of all workers made less than that threshold and qualified for automatic overtime, no matter their job classification.

But the threshold has not been materially increased for 30 years. As a result, only 8 percent of all employees now qualify for automatic overtime. And, not surprisingly, many companies have driven a Mack truck right through the “professional, executive and managerial” loophole. As a result many employees, like some who spend most of their days making sandwiches at Subway, are classified as “managers” and required to work 50- or 60-hour weeks with no overtime pay. In fact, they are often put on fixed — if tiny — “salaries” so they get no pay for overtime at all.

The disappearance of overtime protections is precisely one of the rules of the economic game that has been rigged by the CEO class to assure that virtually all of the new income growth in America has gone to the top one percent.

So Wednesday, Labor Secretary Tom Perez, Vice President Joe Biden and Senator Sherrod Brown went to Columbus, Ohio to announce that the threshold would be raised from $23,000 — where it has been stuck for years — to $47,500.

This is a huge victory for the middle class and all ordinary workers, and it is likely to benefit more than 12 million American families. It will once again make certain that workers are actually paid for their overtime.

But to hear the Republicans, this was a gigantic Obama overreach that will stifle job growth and hurt small businesses. This is the same thing they say whenever we increase the minimum wage or take other steps to make certain that ordinary people get to keep a bigger share of economic growth that they themselves create. But Republican predictions of doom never turn out to be true.

Of course the reason it never turns out to be true is that economic growth — and with it, job growth — is actually fueled by putting more money into consumer pockets rather than in the offshore accounts of corporate CEOs.

But putting the economics of the case aside — for the GOP this is really dumb politics. It doesn’t take a rocket scientist or political guru to tell you that trying to take away the overtime pay of ordinary voters will not make them happy — no matter how happy it makes the GOP’s corporate givers.

If there is one thing that this election season has made crystal clear: ordinary voters are plenty unhappy about the fact that their incomes have flatlined at the same time CEO salaries and bonuses have soared. It makes no sense to them that per capita Gross Domestic Product has shot up 48 percent over the last 30 years and yet their incomes have stagnated. And they are figuring out who is to blame — the .01 percent that rigged the rules of the economic game so they could keep virtually all of that gain for themselves.

But Paul Ryan and Mitch McConnell have convinced their rank and file that they are better off being dragged around by their noses by corporate bigwigs who give them money than they are by paying attention to the needs of ordinary voters.

Newsflash: want to know why the GOP rank and file has turned on the GOP elite? It’s because they have time and time again failed to deliver for the white working class men who they have used as cannon fodder in their quest to give more tax breaks for the rich.

So now this brilliant GOP leadership has threatened to use the Congressional Review Act (CRA) to pass resolutions overturning the new overtime rule — and in effect take away people’s overtime pay. But when they do, President Obama will veto their resolution, and there is no way Democrats will give the GOP the votes to override his veto of this very popular new regulation.

Instead, Democrats plan to have a field day reminding voters that their GOP representative voted to take away their overtime pay.

Sometimes, as the famous organizer Saul Alinski once said: you can count on your enemy. This time, the Republican’s blind allegiance to corporate orthodoxy and rightwing ideology will lead them into a bloody political ambush. It couldn’t happen to a more deserving crew.

 

By: Robert J. Creamer, The Blog, The Huffington Post, May 20, 2016

May 23, 2016 Posted by | Middle Class, Mitch Mc Connell, Overtime Pay, Paul Ryan | , , , , , , | 1 Comment

“I’m Down With The Trends”: Jeb Bush Wants To Be The Uber Candidate. Here’s The Problem With That

Jeb Bush is desperate for you to know that he is the Uber candidate. The old, 20th century ways are not for him and his bold campaign for the future. He’s sharing a ride to the glorious tech-driven tomorrow.

But what does that actually mean? So far he hasn’t said, but he’s certainly getting the coverage he wants.

The front page of today’s New York Times features a photo of Bush in an Uber car, over a story about Republican candidates embracing the company. It summed up the purpose fairly well:

Republican candidates are embracing Uber not just as a paragon of their free-market ethos and distaste for entrenched, government-protected industries, but also as an electoral strategy for building bridges to traditionally Democratic cities, where the company has thrived. During his visit to the left-leaning city of San Francisco on Thursday, Mr. Bush was ferried around, fittingly, by an Uber driver, who deposited him at a campaign event in a black Toyota Camry. “Thanks for the ride!” Mr. Bush hollered as cameras snapped away.

So what exactly is Jeb trying to communicate about the kind of president he’d be? On the surface, it’s entirely substance-free. It’s just about attitude: I’m hip to what the kids are into, I’m down with the trends, I’m forward-thinking. In that spirit, Jeb took to LinkedIn and mobilized a phalanx of Silicon Valley clichés to proclaim that his economic ideas are super-futuristic.

In a post entitled “Disrupting Washington to Unleash Innovators,” he went on and on about how liberals just want to crush innovation with their dastardly regulations, while he…well, he actually didn’t say anything about what sorts of policies he would pursue as president, other than to proclaim, “I’ve got a different view on things, and a different approach. I don’t mind disrupting the established order.” Ooo, did he say “disrupting”? How disruptive!

The truth, though, is that the president of the United States has no power to influence municipal disputes over taxi regulations, so there is approximately nothing Jeb will do as president to affect the regulations that govern Uber and other ride-sharing companies. And if you don’t feel at least somewhat ambivalent about Uber in particular, you haven’t been paying attention.

On one hand, the company provides a service that people find invaluable, and the local taxi regulations it fights against are often ridiculous (side note: despite the conservative assumption that the government “closest to the people” is the best government, it’s often local governments that are most corrupt and have the most onerous and illogical regulation). On the other hand, Uber’s leadership is apparently a bunch of arrogant jerks whose business model is built around moving into a new market, blatantly breaking the laws that restrain their ability to operate, and then trying to build pressure to get the laws changed. (Catherine Rampell lays out some of these issues well in today’s paper.)

In any case, one thing the federal government does have power over — and thus something Jeb Bush would have the ability to affect if he becomes president — is labor standards, and that’s a genuine policy dispute worth exploring. If Jeb’s right and more and more people will be earning income from companies like Uber, how should they be treated? What standards will apply to them? How are these workers going to obtain the things we ordinarily associate with a job, like health insurance, retirement savings, or paid leave?

Bush hasn’t spoken to these issues yet, but I’m pretty sure I know what his position is: the market will work everything out, and government just has to get out of the way. But we already have evidence that in some ways this approach is screwing more and more people over. It may or may not be appropriate to consider someone driving for Uber part-time to be an employee of the company, but what about a case like FedEx, which for years classified thousands of its full-time drivers as “independent contractors,” meaning the company didn’t have to pay payroll taxes or overtime, and could evade all sorts of other labor regulations? The company suffered a series of losses in court over the issue, and just settled a lawsuit by drivers in California for $228 million. Does Bush think they were in the right, and other companies should be able to just reclassify workers whenever they want?

That’s an example of what the Obama administration is trying to address with a new guidance the Labor Department just released to employers. It says in effect that you can’t just take an ordinary employee who works only for you and has all the conditions of their work controlled by you, and say, “You’re now an independent contractor” and thereby evade all your responsibilities as an employer. This kind of mis-classification has spread to all sorts of industries, with millions of employees finding themselves with fewer benefits, lower incomes, and less protection than the law says they ought to have. Hillary Clinton has endorsed the administration’s effort to crack down on mis-classification, but as of yet the Republican candidates haven’t addressed it. It’s no mystery what they’ll say, though: this is just more government meddling in the market.

There’s a lot more we should hear from Clinton on this topic and how it relates to companies like Uber, particularly since she’s the one more inclined to have government respond to the ways our economy is changing. In her economic speech Monday, she mentioned it briefly, saying: “This on-demand, or so-called gig economy is creating exciting economies and unleashing innovation. But it is also raising hard questions about workplace protections and what a good job will look like in the future.” Which is perfectly true, but it doesn’t tell us what in particular she thinks government ought to do to protect workers as the economy transforms.

I’m sure she’ll have more to say on the subject, and perhaps in response Jeb Bush can explain why government has gone too far out of its way to ensure that workers get a fair shake. Or he might even surprise us and offer a program of smart, nimble regulations that would allow innovative new models of work to flourish while still protecting people from exploitation. But until he says otherwise, we have to assume that Bush’s answer to the question of what government should do to respond to economic changes that can make workers more vulnerable is: “Nothing.”

 

By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line Blog, The Washington Post, July 17, 2015

July 19, 2015 Posted by | Jeb Bush, Overtime Pay, Workers | , , , , , , , , | Leave a comment

“Bush ‘Woefully Misinformed’ On Overtime Policy”: The Economy, In Other Words, Is Not Bush’s Strong Suit

With Congress unwilling to pass meaningful economic measures, President Obama’s recently unveiled overtime policy is one of the year’s biggest stories on the domestic economy. Jeb Bush, not surprisingly, doesn’t like it, but he may not fully understand it, either.

To briefly recap, under the status quo, there’s an annual income threshold for mandatory overtime: $23,660. Those making more than that can be classified by employers as “managers” who are exempt from overtime rules. The Obama administration’s Labor Department has spent the last several months working on the new plan, which raises the threshold to $50,440 – more than double the current level.

The policy doesn’t just nibble around the edges; its scope includes roughly 5 million American workers. NBC’s Kristin Donnelly reported the administration’s move constitutes “the most ambitious intervention in the wage economy in at least a decade.”

Campaigning in Iowa this week, Jeb Bush said the policy would result in “less overtime pay” and “less wages earned.” The Guardian did some fact-checking.

Numerous economists attacked Bush’s statement, calling him woefully misinformed. And several studies on the rule contradict Bush’s assertion that the overtime rules would “lessen the number of people working”.

Daniel Hamermesh, a University of Texas labor economist, said: “He’s just 100% wrong,” adding that “there will be more overtime pay and more total earnings” and “there’s a huge amount of evidence employers will use more workers”.

Indeed, a Goldman Sachs study estimated that employers would hire 120,000 more workers in response to Obama’s overtime changes. And a similar study commissioned by the National Retail Federation – a fierce opponent of the proposed overtime rules – estimated that as a result of the new salary threshold, employers in the restaurant and retail industries would hire 117,500 new part-time workers.

The Economic Policy Institute’s Ross Eisenbrey added that Bush “should be embarrassed about how misinformed he was.” Noting that the Republican presidential candidate also said Obama’s policy would also prohibit many bonuses, Eisenbrey added, “All of that is exactly wrong – and pretty much nonsense.”

On a surface level, it’s problematic that Bush would flub the issue so poorly, but it’s even more significant in the context of related confusion about economic policy.

Remember, the Florida Republican remains deeply committed to 4% GDP growth – a target no president has reached in the post-WWII era – despite the fact that the number was basically pulled out of thin air.

Bush picked the growth goal because, as he sees it, four is a “round number.” The fact remains, however, that this is “backed by zero substantive analysis of any kind.”

The former governor still sees himself as some kind of economic expert, thanks to Florida’s growth in the 1990s, but as we’ve discussed before, whether Bush is prepared to admit it or not, Florida’s economic growth during his two terms was the result of a housing bubble. In fact, Paul Krugman accurately described it as “the mother of all housing bubbles – and when the bubble burst (luckily for Jeb! just after he left office) it promptly wiped out 900,000” of the 1.3 million jobs created when Bush was in the governor’s office.

The economy, in other words, is not Bush’s strong suit.

 

By: Steve Benen, The Maddow Blog, July 17, 2015

July 18, 2015 Posted by | Economic Policy, Jeb Bush, Overtime Pay | , , , , , | Leave a comment

“A Win For Workers”: Perfect Timing For The New Overtime Rule

The June jobs report (223,000 jobs added and unemployment rate down to 5.3%) extends the longest period of private sector job growth in our country’s history.

But there are two things that are causing concern. First of all, the labor force participation rate (LFPR) dropped 0.3 percentage points to 62.6%. As I’ve written before, it is important to keep in mind that there are several factors that affect this number:

1. The increasing number of baby boomers who are retiring
2. The increasing number of high school graduates who are going directly to college
3. The number of people who find it difficult to get a job because of a criminal record

I haven’t seen anyone attempt to quantify this, but it would also be interesting to find out the number of people who are voluntarily leaving the job market for early retirement (or other reasons) because Obamacare has made that a viable alternative. That might also be a factor.

Finally Betsey Stevenson, a member of the Council of Economic Advisors, points out that the change in LFPR might be credited to something as simple as the fact that the survey tracking it was distributed earlier than normal last month.

Taking all that into consideration, the big focus on the LFPR drop is probably over-heated. Of all the potential explanations, the one that should spur us to action is the need for passage of something like the REDEEM Act, which would allow non-violent offenders to have their criminal records expunged.

The other cause for concern in the jobs report is much more significant – little to no increase in wages. That’s why this is the perfect time for President Obama’s new overtime rule. In the best case scenario, people who are working overtime but not getting paid for it would get a big pay increase.

Republicans who are criticizing the new rule suggest that it will mean fewer jobs. That is completely counter-intuitive. What many employers are likely to do is hire more employees in order to avoid paying overtime. That means more jobs, not fewer.

But here’s where the timing is important. We are now at or near what economists consider “full employment.” If the new overtime rule had been implemented during a time of high unemployment, businesses would have likely hired those new employees at lower wages – thereby actually depressing wage growth. That is highly unlikely now.

Due to federal regulations regarding the need for public comment on these kinds of changes, the new overtime rule won’t go into affect until next year. When it does, employers will have two choices, (1) give existing employees a raise via overtime pay, or (2) hire more employees. Either way it’s a win for workers.

 

By: Nancy LeTourneau, Political Animal Blog, The Washington Monthly, July 4, 2015

July 6, 2015 Posted by | Jobs, Overtime Pay, REDEEM Act | , , , , , , | 1 Comment

“Who Gets Overtime Pay”: The Next Policy To Help The Middle Class That Republicans Will Oppose

Lately, Democrats have been searching for new ways to appeal to working class and middle class voters on economic issues. They know their basic economic perspective is popular, but they worry that the few specific policies they advocate, like increasing the minimum wage, don’t touch enough people’s lives. They also worry about being seen as advocates for the poor but not the middle class. So they’re looking for ideas.

But there’s one policy change already in the pipeline that looks as though it could be the next big Democratic economic push. It’s got everything: the potential to affect millions, guaranteed opposition from business groups, and the specter of another executive action from President Obama. That last point means that the change can be made as soon as the administration wants, and that Republicans will be apoplectic when it happens.

It’s about who gets overtime pay, which has all but disappeared from American workers’ paychecks. But maybe not for long.

A little background: Under the Fair Labor Standards Act, workers are supposed to be paid overtime (time and a half) if they work more than 40 hours a week. That doesn’t apply to executives and managers, or workers whose salaries exceed a certain threshold. The threshold is what’s at issue; it has only been raised once since 1975. The current threshold is $455 a week, or $23,660 a year — under the poverty level for a family of four. If you make more than that, you’re ineligible for overtime pay. Today only around one in ten American workers is eligible for overtime pay, compared to 65 percent of workers who were covered in 1975.

So what some are proposing is to raise the threshold back to something like what it used to be. Raising it to what it was in 1975, adjusted for inflation, would mean a level of $984 a week, or $51,168 per year, which is close to the median family income. According to the Economic Policy Institute, at that level over six million Americans would become eligible for overtime pay. Raise it a bit higher and you could cover millions more.

This March, President Obama instructed the Labor Department to reexamine the rules and propose a revision, and the department’s decision should be coming some time soon. And an organized campaign to promote it looks to be developing. Today in The Hill there’s an op-ed arguing for changing the overtime rules by Nick Hanauer, a liberal billionaire venture capitalist who could become an important figure in the economic arguments we have over the next few years. Unlike many other major political funders like the Koch brothers, Hanauer doesn’t just give other people money — he’s putting himself out as an advocate.

Many people first heard of Hanauer a few months ago when he wrote an open letter addressed to “my fellow filthy rich,” challenging the notion that the wealthy got where they are because of their unusual virtue and telling them that they had to start working to combat inequality in America). It looks like Hanauer wants to be a player in this debate, and he has the money to make an impact.

So don’t be surprised if a lot of elected Democrats suddenly start talking about overtime rules. This issue is more than an arcane piece of labor law. It gets to the heart of the insecurity and dissatisfaction Americans feel with their economic lives and prospects. It’s been repeated to the point of cliché that Americans feel like they’re working harder but not getting ahead. The lack of overtime is one key reason why. It’s one thing to work 50 or 60 hours a week and know that it means you’ll have extra money in your pocket. But if your boss tells you to come in on Saturday to finish up those TPS reports and you get nothing from it, it’s hard not to feel powerless and exploited.

For Democrats looking for specific policy moves that will demonstrate their desire to help middle-class Americans, the overtime pay issue looks like an excellent candidate, not only because it would mean more money for regular people but also because it would push the dynamics of power, compensation, and dignity a little bit back in the direction of workers.

Republicans will argue that raising the threshold infringes on the prerogatives of business owners, and that Obama is a tyrant for using the regulatory process to make the change. But I’m guessing Democrats would be happy to have that debate, so they can show that they’re trying to help the middle class. And at the end of the debate, the administration can issue the rules, and there’s nothing Republicans will be able to do to stop it.

 

By: Paul Waldman, Contributing Editor, The American Prospect; The Plum Line, The Washington Post, December 18, 2014

December 21, 2014 Posted by | Economic Inequality, Middle Class, Overtime Pay | , , , , , , | Leave a comment

   

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