“The ‘Depends’ Defense”: Republicans Will Hate Obama’s New Overtime Rule, But They Can’t Do Anything About It
Last night President Obama announced — in an article on the Huffington Post — that he will raise the threshold for overtime pay in American workplaces. The new regulations are substantively important for the millions of workers who will be affected, and they’re politically important as well. Republicans are going to squawk, saying that this change will cost jobs and is another example of Obama’s tyrannical rule. But they can’t stop it, and they’re going to lose the argument as well.
Under the Fair Labor Standards Act, employers have to provide overtime pay (usually time and a half) to employees who work more than 40 hours a week, but executives and managers are exempt from the requirement, as are those who make higher salaries. The trouble is that the rules don’t account for inflation, and so over time, what constituted a higher salary became absurdly low. The threshold has been raised only once since 1975, when it covered nearly half of U.S. workers; today it stands at less than $24,000, or lower than the poverty level for a family of four. (This document from the Economic Policy Institute offers some background on the regulation if you’re interested.) Here’s how Obama described the change he will be making:
We’ve got to keep making sure hard work is rewarded. Right now, too many Americans are working long days for less pay than they deserve. That’s partly because we’ve failed to update overtime regulations for years — and an exemption meant for highly paid, white collar employees now leaves out workers making as little as $23,660 a year — no matter how many hours they work.
This week, I’ll head to Wisconsin to discuss my plan to extend overtime protections to nearly 5 million workers in 2016, covering all salaried workers making up to about $50,400 next year. That’s good for workers who want fair pay, and it’s good for business owners who are already paying their employees what they deserve — since those who are doing right by their employees are undercut by competitors who aren’t.
That’s how America should do business. In this country, a hard day’s work deserves a fair day’s pay. That’s at the heart of what it means to be middle class in America.
We should note that Obama could have gone higher than $50,400. Earlier this year, some Democrats on Capitol Hill worried that the administration was going to propose a lower overtime threshold, something like $42,000 a year. A group of liberal senators urged Obama to set the threshold at $54,000. They also argued that it should be pegged to increase with inflation going forward, an absolutely critical provision that would give the measure lasting effect. So Obama didn’t raise the threshold as far as they wanted, but he is accounting for future inflation, by pegging the overtime threshold to the 40th percentile of incomes.
As much as Republicans will object, they can’t expect that their next president will undo this action. There are some regulations that we can expect to change whenever the White House changes hands. For instance, the Mexico City Policy, also known as the “global gag rule,” prohibits the funding of any organization anywhere in the world that even discusses abortion with a woman; when a Republican president takes office, he institutes it, and when a Democratic president takes office, he revokes it. But rules such as this one almost certainly won’t fall into that category. Try to imagine a President Rubio or Walker announcing that he was taking overtime pay away from millions of lower-middle-class U.S. workers. It won’t happen. They may argue against the rule when it is proposed, but once it’s in place, undoing it becomes politically impossible.
The more immediate political impact of this rule change lies in its place among a constellation of proposals Democrats will be offering on things such as the minimum wage and paid sick leave, proposals that are aimed at arresting the growing cruelty of the American workplace. As I’ve argued before, one way to think about the contrast between what Republicans and Democrats offer on the economy is that Republicans say they’ll get you as far as your employer’s door, while Democrats want to walk inside with you. Republicans argue that their preferred policies, mostly tax cuts and light regulation on businesses, will accelerate growth so that new jobs will be created. But once you’ve got the job, you’re on your own. The Democratic argument is that government has to come inside the workplace, to make sure people are being treated fairly. So they want to increase pay, provide family and sick leave, allow workers to bargain collectively, make sure no one is discriminated against and generally establish a structure that guarantees that people are treated well and can maintain some measure of dignity.
The Republican counter, of course, is that all those things increase costs to employers and therefore cost jobs. But their argument presumes that there’s nothing fundamentally wrong with the American workplace, which most of us know just isn’t true. Yes, many employers already treat their employers well. But millions of others don’t and would treat their workers even worse if they could get away with it.
As for this measure, we know exactly what employers will say: This will cost us money, which means fewer jobs. We know that’s what they will say, because that’s what they say about every marginal improvement in working conditions, benefits or pay. And in the short term, they’re right: It will cost them some money.
But let’s turn it around. What if employers said, “We could save money by removing the employee bathrooms and just telling our workers to wear Depends to the job. And that would mean we’d be able to hire more people.” Would we respond, “Well, if it would save you money and produce a few more jobs, then that sounds great”? Of course not. The short-term cost to employers of a regulation is certainly something to consider, but it’s not the only thing to consider.
The change to overtime regulations isn’t some kind of dramatic transformation. Like increasing the minimum wage, it’s nothing more than taking an existing rule and updating it for inflation. But it’s built on the assumption that the government should come into the workplace and make sure that what happens there is fair. Republicans don’t believe that’s government’s job. But it isn’t going to be easy for them to make that case to a population that feels increasingly insecure at work. And even if they could win the argument, they won’t be able to change the policy.
By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line Blog, The Washington Post, June 30, 2015
“Sympathy For The Speaker” GOP Leaders Appear To Know They Have A Credibility Problem
I have sympathy (not much, but some) for John Boehner.
When it comes to the Affordable Care Act, the Republican House Speaker is nearly always between a rock and a hard place.
On one hand, he and the GOP leadership must stand against President Barack Obama’s health care law, because the longer it remains on the books, the more likely those who receive its benefits are going to support Democrats, not Republicans.
On the other hand, if someday the Republicans repeal the law, after having returned to the White House with congressional majorities, they will be forced to devise an alternative — an impossibility given the reactionary impulses of today’s GOP.
In the former scenario, Republicans lose.
In the latter scenario, they lose.
So Boehner must thread the needle while hoping his credibility as a GOP leader isn’t badly tarnished, even as rank-and-file Republicans discover through their experience that Obamacare isn’t actually a harbinger of North Korean-style totalitarianism.
Of course, that’s easier said than done. Boehner reiterated the Republican position on health care on the May 3 broadcast of Meet the Press, saying that Obamacare wasn’t working.
“Obamacare made it harder for employers to hire people,” he said. “You can ask any employer in America, ask them whether Obamacare has made it harder for them to hire employees, and they’ll tell you yes.”
When asked why none of the Republican Party’s dire predictions about health care came true, Boehner responded: “You know why there’s more people insured? Because a lot more people are on Medicaid.” He continued, “Giving people Medicaid insurance is almost like giving them nothing, because you can’t find a doctor that will see Medicaid patients. So where do they end up? The same place they used to end up: the emergency room.”
Events later in the week suggested, however, that something wasn’t right about Boehner’s claims. On Wednesday, the largest independent study of its kind was released. It found that nearly 17 million Americans are now covered under the Affordable Care Act.
Some lost coverage (about 6 million), according to the RAND Corporation study, but many more found coverage, with a net gain of 16.9 million. The evidence also contravenes those who say Obamacare encumbers hiring. For one thing, the largest gains (nearly 10 million) were made in employer-run insurance plans. For another, some 80 percent of the working population under the age of 65 saw no change at all in their health care coverage.
That wasn’t the only reason to look askance at Boehner’s claims. Last Friday’s monthly jobs report showed the unemployment rate had dropped to 5.4 percent, the lowest it’s been since May 2008, before Obama won the presidency. Even wages, which have not typically kept pace with inflation, rose by 2.2 percent in the past year.
So something’s wrong with the picture Boehner is painting. If most employers are offering insurance, and if the job market is expanding, why is Boehner saying that the Affordable Care Act has led to less insurance coverage and more unemployment?
GOP leaders appear to know they have a credibility problem. They are shifting their stance against Obamacare from quantity to quality. According to a report in The Hill published after Boehner’s appearance on Meet the Press, the Republicans now concede that Obamacare has covered more Americans but argue that the coverage is inferior. Hence, Boehner’s comment about Medicaid: Doctors don’t take Medicaid, and having it is like having nothing.
Such a shift raises its own question of credibility. Why would a Republican Party that equates tyranny with the presence of government in the lives of individuals be worried about the government’s role in providing quality health care to individuals?
Some might judge this as hypocrisy and thus dismiss the new Republican position as entirely unworthy of scrutiny. There’s merit to that, as Washington wallows in hypocrisy. But hypocrisy can prevent us from seeing what’s really going on. In this case, I wonder if Boehner and the leadership are worried about holding their ranks, as the temptation to defect grows from within.
Over time, the Affordable Care Act will penetrate deeper into the population. The millions of Americans who will benefit from the law will have an incentive to maintain the status quo. They’ll likely support the Democratic Party as long as the Republicans demand repeal of the law. So, as of now, a vote for a Republican, from the point of someone covered by the Affordable Care Act, is a self-destructive vote. And among those millions are conservatives.
Some might argue that in saying things about Obamacare that just aren’t true, Boehner risks alienating conservatives that make up the base of the Republican Party. Why would they trust the House Speaker if he is so consistently wrong? There’s something to that, but a likelier explanation for the GOP’s continued, and shifting, stance against the health care law is that opposition, no matter how contorted, is the best way to keep the conservatives in line.
Given time, more conservatives are going to benefit from the law. And the more they do, they more they will vote their self-interests. And that’s why I have (a little) sympathy for John Boehner.
By: John Stoehr, The National Memo, May 16, 2015
“The Knuckles Are Dragging Again”: The GOP Follows Sen. Sessions—Backward
If you want to see where the impulse to reform the Republican Party in a more libertarian direction of limited government, social tolerance, and free markets goes to die, look no further than the recent attacks on immigration and freer trade by Jeff Sessions, the influential senator from Alabama. Every time the GOP seems finally ready to orient itself in a forward-looking, post-culture-war direction, some holdover from an America that never quite existed to begin with blows his whistle and the next generation of would-be party leaders fall into line like the obedient von Trapp children in Sound of Music.
Indeed, Scott Walker has explicitly attributed his remarkable flip-flop on immigration to conversations with Sessions. Just a few years ago, the Wisconsin governor and leading Republican presidential candidate used to favor liberal immigration and a path to citizenship for illegals. Now he’s calling for “no amnesty” and universal, invasive, and error-prone E-Verify systems for “every employer…particularly small businesses and farmers and ranchers.”
The three-term, 68-year-old Sessions is “the Senate’s anti-immigration warrior,” according to Politico, and he wants to curb not just illegal and low-skill immigration but also the number of folks chasing the American Dream under H1-B visas, which apply to “workers in short supply” who are sponsored by specific employers with specialized needs.
In a recent Washington Post op-ed, Sessions complained that “legal immigration is the primary source of low-wage immigration into the United States.” Exhibiting the zero-sum, fixed-pie economic thinking that conservatives and Republicans routinely chastise in liberals and Democrats, Sessions continues, “We don’t have enough jobs for our lower-skilled workers now. What sense does it make to bring in millions more?”
His solution is a time out on foreigners, “so that wages can rise, welfare rolls can shrink and the forces of assimilation can knit us all more closely together.” Only “the financial elite (and the political elite who receive their contributions)” could possibly object, argues Sessions in full populist mode. Immigrants keep “wages down and profits up….That is why [elites] have tried to enforce silence in the face of public desire for immigration reductions.”
Sessions brings the same populist and anti-immigrant animus to his critique of the Trans-Pacific Partnership (TPP), the trade deal the Obama administration is brokering between the United States and 11 other countries. Sessions, along with progressive Democrats such as Sen. Elizabeth Warren and Martin O’Malley, only see the shadowy machinations of elites at work in the reauthorization of Trade Promotion Authority (TPA) or “fast-track” negotiations.
Such rules, which have been standard operating procedure since 1974, allow the executive branch to negotiate terms and then bring the deal to Congress for an up or down vote. Citing “the rapid pace of immigration and globalization,” Sessions wants not “a ‘fast-track’ but a regular track.” He, Warren, and others charge that negotiations under TPA are “secret” and are somehow selling out basic American “sovereignty”—despite the fact that any deal will be voted on by Congress.
Sessions will lose the vote against TPA, just as the Republicans will ultimately lose the battle over restricting immigration. Contra Sessions, there is no clear public desire for reducing immigration, except among Republicans. Fully 84 percent of Republicans are dissatisfied with the current generous levels, a super-majority that only shows how out of touch the GOP faithful is with the rest of the country. Earlier this year, Gallup found that 54 percent of Americans are either satisfied with current levels of immigration or want more immigration. Just 39 percent were dissatisfied and want less immigration, which is 11 points lower than the same figure in 2008.
The majority of Americans embrace immigration for a lot of different reasons. Part of it is our history and sense of national identity and part of it is a basic if unarticulated recognition of what economists on the right and left have consistently found: “On average, immigrant workers increase the opportunities and incomes of Americans.”
Leave aside the fact that immigrants are twice as likely to start their own businesses as native-born Americans. The fact is they tend to be either higher- or lower-skilled than the typical worker, so they complement rather than displace natives. And, as the Cato Institute’s Alex Nowrasteh documents in his exhaustive rebuttal to Sessions’s Washington Post piece, immigrants not only consume less welfare and commit less crime than the average American, they pay taxes (often without any hope of getting the money back) and stop coming when the economy sours. If you think immigrants cause problems, check out the parts of the country that nobody is moving to and you’ll understand that it’s precisely when migrants stop coming that your real troubles are starting.
Sadly, lived reality holds little appeal for Sessions and Republicans such as Walker, who are instead doing their damnedest to turn the party of Ronald Reagan and George H.W. Bush decisively against its long and glorious history of relatively open borders and freer trade. In a remarkable 1980 debate between Reagan and Bush I, the two candidates for the GOP nomination literally outdid themselves not simply in praising legal immigrants but illegal ones: https://youtu.be/Ixi9_cciy8w.
In the 2012 election, Mitt Romney pulled just 27 percent of the increasingly important Hispanic vote. That was despite the fact that Barack Obama is, in Nowrasteh’s accurate term, “Deporter in Chief” who repatriated more immigrants far more quickly than George W. Bush. Hispanics aren’t stupid—44 percent of them voted for immigrant-friendly Bush in 2004. They knew things could always get worse and probably would for them under Romney.
With 2016 coming into clearer and clearer focus—and with Hillary Clinton doing her own flip-flop on immigration and now embracing newcomers—the GOP and its presidential candidates have a choice to make. They can follow Ronald Reagan’s example and embrace libertarian positions on immigration and free trade. Or they can follow Jeff Sessions’s retrograde populism and see just how few Hispanic votes they can pull.
By: Nick Gillespie, The Daily Beast, May 12, 2015
“An Ad-Hoc Fallback Position”: Immigration; The Only Time The GOP Cares About The Working Class
Last Monday, Scott Walker, Wisconsin’s Republican governor and a presumed GOP presidential hopeful, kicked the hornets’ nest that is the immigration debate.
He told Glenn Beck’s radio show that America needs to “make decisions about a legal immigration system that’s based on, first and foremost, protecting American workers and American wages,” and that this concern should be “at the forefront of our discussion going forward.”
Walker’s comments are significant because they’re something of a reversal for him, but also because they break with the “legal-immigration-good, illegal-immigration-bad” orthodoxy of the GOP establishment.
Lumping both forms of immigration together as equally questionable makes sense from an economic perspective; market forces don’t care about legal formalities like borders. But it takes near-cosmic chutzpah for Walker to say our first concern should be American wages and workers, given that pretty much every policy move by the Republican Party and the conservative movement seems designed to keep lower class incomes as depressed as possible.
By now, the battle lines on this issue should be familiar. First you get the argument from the center left and right that whenever immigrants, documented or undocumented, come to America, they bring added demand to the economy: They gotta eat, drink, put a roof over their head, get health care, and entertain themselves, just like everyone else. Even as they take on work, they increase the economy’s overall ability to create jobs. So claiming immigrants “take jobs from Americans” is wrong.
This is the view of the economics of immigration from 30,000 feet, and it’s right as far as it goes.
But closer to the ground, the terrain becomes more complicated. The U.S. economy isn’t one big market. It’s actually lots of overlapping markets, with different types of businesses and workers participating in each. And sometimes movement between these markets is easy for those workers, and sometimes it isn’t. So it’s possible for big influxes of low-skill, low-education immigrants to decrease wages and jobs for low-skill, low-education natives. You get more workers in particular markets, so wages go down. Meanwhile, the wealth created by those new entrants flows to other parts of the economy, so jobs in that market don’t increase all that much. And the native workers in those markets can’t easily hop to other markets, so they’re stuck with depressed wages and fewer jobs.
You can click through the links for a fuller examination of this phenomenon. But the short version is that it’s possible the second story is true, even if concrete evidence has been hard to tease out.
What this all boils down to is a problem of bargaining power. If you increase the number of workers in a market, but don’t increase the number of jobs proportionally, employers can play workers off one another, driving wages down. That’s why some Republicans like Alabama Sen. Jeff Sessions — whom Walker is apparently taking his cues from — are opposed to increasing legal avenues for high-skill immigrants. Tech workers, doctors, lawyers, and other professionals don’t like seeing their incomes reduced either.
But immigration policy doesn’t occur in a vacuum. There are lots of ways we could increase worker bargaining power, especially for low-skill Americans, while still taking in many more immigrants than we do now.
We could break up the work the economy already provides into smaller chunks that can be distributed to more workers, through things like national paid leave mandates, paid vacation, strengthened overtime laws, and a shortened work week. We could get the Federal Reserve to run much more aggressive monetary stimulus, or even fundamentally reform the way that policy operates, so that the boost the Fed pumps into the economy goes straight to the Americans hardest hit by bad economic times. We could ramp up government stimulus spending, the generosity of the social safety net, or both, which would also create jobs. And we could change laws to make unions more powerful, so they’d be ready and waiting to take on new immigrants as members and fight on their behalf.
Full employment should really be the top line goal, and it’s what the first four of those five policy options aim at. (With an expanded social safety net and stronger unions also acting as a backstop for wages when full employment isn’t reached.) When there are more workers than jobs available, bargaining power is going to go down across the economy. But at full employment, the first story about immigration — about how it just grows the size of the pie, and everyone benefits — is most likely to be true, because employers aren’t able to play the new workers off the old ones.
Fundamentally, the U.S. economy faces a two-stage problem: First, the share of national income going to labor is getting smaller, as more and more is gobbled up by people who own capital. Second, of that share going to labor, a bigger portion is going to elite workers, leaving the working class with less and less. That’s the context in which the question of immigration has to be understood. Full employment and increased bargaining power for all workers would solve both these problems — equalizing shares between workers, and getting them a bigger slice of the pie vis-a-vis capital.
In a sane and decent world, we would open our borders as wide as humanly possible. Because letting other people immigrate to America makes their lives better; much better in many cases. And we would rely on all those other policy levers to keep the wages and jobs of immigrant and native-born Americans alike healthy and robust.
The perversity of the whole immigration discussion amongst conservatives and Republicans is that they’ve already rejected all these other options for increasing worker bargaining power. That the elite GOP establishment still wants more immigration even after that rejection should make their goal plain as day: keep capital’s share as high as possible!
But for anyone on the right that still wants to claim they give a damn about working class Americans, trying to limit immigration is a kind of ad-hoc fallback position to keep wages up.
By: Jeff Spross, The Week, April 28, 2015
“The Conscience Of A Corporation”: A Deeply Held Relationship With Five Members Of The Supreme Court
So here is Walmart, insisting that “our core basic belief of respect for the individual” is at odds with an Arkansas bill that would allow religious-based discrimination. And here is Marriott, slamming as “idiocy” similar measures in other states. And somewhere in there is the family-run pizzeria, asserting that Indiana’s new law allows them to deny wedding day pies to people whose choice of spouses they don’t approve of.
These businesses sell Chinese-made consumer goods, hotel rooms, and rounded dough burdened with pepperoni and extra cheese. Since when did they start spouting off about the deeply held convictions guiding their corporate consciences?
You can blame last year’s Supreme Court decision in the Hobby Lobby case for unleashing a herd of ponies that have gone off in quite unpredicted directions. There, in a partisan 5-to-4 ruling straight from Republican fever nests, the court gave certain corporations the right to challenge laws that they claim violate their religious beliefs. In that case, it was about contraception in the health care package.
Let’s pause to consider this new entity — a moneymaking organization no different from a lone human being who feels conscience-bound to live a certain way because of a deeply held relationship with God. Let’s pause, because five members of the Supreme Court would not.
One justice, the irrepressible Ruth Bader Ginsburg, warned of the consequences of giving corporations a soul: “The court, I fear, has ventured into a minefield.”
Ginsburg predicted that the court’s “expansive notion of corporate personhood” would invite profit-making companies to start using religion as an excuse to ignore laws they didn’t like. And indeed, states packed with right-wing legislators who see phantom persecution behind every new episode of “Modern Family” have clamored to give companies a spiritual opt-out clause.
So it is in Indiana. State lawmakers were also told to look before taking a big leap into spiritual exemptions for business. In a letter in February, legal scholars warned of corporations’ citing religious justification for “taking the law into their own hands.”
But, lo, look what happened on the way to forcing religion into the marketplace: The corporations — Apple, Nike, Yelp, Gap, PayPal, Big Pharma companies like Eli Lilly and the nine largest companies with headquarters in Indiana — have rebelled. They are saying: No, don’t give us the power to discriminate. We’d rather remain soulless purveyors of product to the widest possible customer base. Which is, I suppose, how capitalism is supposed to work. Bless the free market.
Indiana’s law is “not just pure idiocy from a business perspective,” said Marriott’s president, Arne Sorenson, but “the notion that you can tell businesses somehow that they are free to discriminate against people based on who they are is madness.”
Not March Madness, the culmination of which is what Indiana thought we’d all be celebrating in the Hoosier State this weekend. But political lunacy, of the type that’s been on display ever since the Republican Party hitched itself to the crazies who dominate its media wing.
But let’s not get too far ahead of ourselves. Walmart, which effectively killed the Arkansas bill a few days ago, remains locked in poverty wage mode, despite its recent boast of raising pay to at least $9 an hour. Apple, and most tech companies now strutting across the moral stage, continues to do business with countries where a person can be executed for being gay.
Their outrage is selective, and calculated: In corporate America, the branding conceit of the moment includes just the right dash of social activism. A little environmental nudge from your cereal, a talk about race from your barista — it’s mostly harmless.
Chick-fil-A learned a lesson in its journey from behind the grease counter and back over gay marriage. After condemning same-sex marriage and becoming a culture-war battleground, the corporate leaders of a company that professes to run on biblical principles now say they will stick with chicken talk. Everyone is welcome.
Good call. Nothing in the secular world keeps Chick-fil-A’s founders from free worship in private. For that matter, nothing in the secular world deprives any business owner of a lawful spiritual pursuit outside of the public square. Their profits will rise or fall because of consumer demand, rather than which side of a biblical exhortation the chicken-eater may be on.
All of this, the free market in tandem with the First Amendment, has worked pretty well in a clamorous democracy such as ours. It’s only when activist judges — thy names are Clarence Thomas, Antonin Scalia, Samuel Alito, Anthony Kennedy and John Roberts — have tried to broaden the intent of the founders that we’ve gotten into trouble.
In 2010, those five judges created the notion of corporate personhood — giving companies the unfettered right to dominate elections. After all, Exxon is just a citizen like you and me. And in 2014, those five judges gave corporations a soul, a further expansion of business entity as a citizen. Well, they tried to. As the saying goes, a corporation will never truly be a citizen until you can execute one in Texas.
By: Timothy Egan, Contributing Op-Ed Writer, The New York Times, April 3, 2015
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