Propaganda is one thing, but Trump’s actual policies will hurt job and wage growth once they kick in.
Remember when President Obama had been in office a few months, and the fiscal year 2009 deficit was reported to be $1.4 trillion? Right-wing propaganda outlets showed charts drawn to convey that the 2009 budget deficit was his fault.
The 2009 fiscal year budget ran from October 1, 2008 to September 30, 2009. Obama’s first budget year began the following month. The 2009 budget deficit wasn’t an “Obama deficit,” is was a Bush deficit. Obama did not have time to do anything. For the same reasons, the 2017 economy, and any health it has, is still Obama’s.
That job reversal was the result of actual policies put in place by Obama, not Republican propaganda.
Propaganda, Not Policies
Like almost everything Republican, the Trump administration is almost entirely about propaganda, not actual, rubber-meets-road policy. Healthcare is the best example of this. After years of propaganda opposition to Obamacare, Republicans had no actual coherent, alternative policy plan to put forward, and were unable to come up with one when the opportunity came for them to do it. The actual policies they finally came up with would have caused 24 million Americans to lose their healthcare.
Propaganda might achieve a propaganda goal, policies get actual things done.
As of today, there is no real Trump economic policy in place. He has submitted a ridiculously extreme budget proposal. He has proposed to “study” trade. He has no real “trillion-dollar” infrastructure plan – his budget proposal actually cuts infrastructure spending – and his tax “reform” plan does nothing more than give corporations and wealthy people huge breaks.
Actual Trump Policies Undercut Jobs And Wages
Trump’s actual policies will undercut job and wage growth. Right off the bat, Trump’s budget proposal would eliminate as many 200,000 federal jobs.
Trump is trying to reverse the “overtime rule” that increases the salary threshold for receiving overtime pay from $23,660 per year to $47,476. This rule is a big deal and would mean that would immediately boost the pay of 12.5 million workers, if Trump allows it to go into effect. Even with the rule the percent of workers who are eligible for overtime pay would still be lower than it was in 1975.
Trump’s executive orders also undercut job and wage growth. He has removed protections against wage theft and rights violations by federal contractors, affecting one in five workers.
The stock market has risen under Trump; Tomahawk missile-maker Raytheon stock just went way up. Cruise missile strikes aside, bumps like these aren’t based on economic fundamentals or sound projections, but instead on the expectation of windfalls for corporations and the already-wealthy stock-owning investor class through the huge tax cuts Trump has promised.
But beyond momentary market gains, the idea of a booming Trump economy is a myth – at least for people who work. There are no actual policies, existing or on the horizon, aimed at actually boosting jobs and wages. Only bluster. In fact, Trump has said we need to reduce American wages to the point where we can be “competitive” with Mexico and China. Yes, he said that.
His executive orders so far undercut jobs and wages. His budget eliminates jobs. His dramatic cuts in the things government does to make our lives and economy better — education, scientific research, regulation, etc. — will eat the seed corn of our future prosperity.
Trump does not offer real policy, only the propaganda of the moment, to be reversed at the next moment if convenient.
This post originally appeared on ourfuture.org on April 10, 2017. Reprinted with Permission.
Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.
The U.S. economy added 227,000 jobs in January in the last employment report of the the Barack Obama administration. Unemployment was little changed at 4.8%, according to figures released this morning by the U.S. Bureau of Labor Statistics. President Donald Trump is inheriting a relatively strong economy based on years of work that Barack Obama and his administration did to bring us out of the horrible recession brought on, in part, because of George W. Bush-era deregulation and weak enforcement. Obama inherited a failing economy, with 589,000 jobs lost in January 2009 and an unemployment rate in February 2009 of 7.6%. Trump, on the other hand, is inheriting a much stronger jobs market, with 227,000 jobs added in January 2017 and an unemployment rate of 4.8%. Trump’s challenge is to continue the pattern of job growth and rising wages. The administration needs to create policies benefiting working people so the recovery continues.
In response to the January jobs numbers, AFL-CIO Chief Economist William Spriggs tweeted:
Last month’s biggest job gains were in retail trade (46,000), construction (36,000), financial activities (32,000), food services and drinking places (30,000), professional and technical services (23,000), health care (18,000), transportation and warehousing (15,000), professional and business (15,000), and financial activities (13,000). Employment in other major industries, including mining and logging, manufacturing, wholesale trade, transportation and warehousing, information, and government, showed little change over the month.
Among the major worker groups, the unemployment rate for Asians (3.7%) increased in January. The jobless rates for adult men (4.4%), adult women (4.4%), teenagers (15.0%), whites (4.3%), blacks (7.7%) and Hispanics (5.9%) showed little or no change over the month.
The number of long-term unemployed (those jobless for 27 weeks or more) was little changed in January and accounted for 24.4% of the unemployed.
This blog originally appeared in aflcio.org on February 3, 2017. Reprinted with permission.
Kenneth Quinnell: I am a long-time blogger, campaign staffer and political activist. Before joining the AFL-CIO in 2012, I worked as labor reporter for the blog Crooks and Liars. Previous experience includes Communications Director for the Darcy Burner for Congress Campaign and New Media Director for the Kendrick Meek for Senate Campaign, founding and serving as the primary author for the influential state blog Florida Progressive Coalition and more than 10 years as a college instructor teaching political science and American History. My writings have also appeared on Daily Kos, Alternet, the Guardian Online, Media Matters for America, Think Progress, Campaign for America’s Future and elsewhere. I am the proud father of three future progressive activists, an accomplished rapper and karaoke enthusiast.
Companies in the nation’s second-largest city must stop requiring job applicants to disclose criminal convictions on hiring forms next year after Los Angeles Mayor Eric Garcetti signed a “Ban the Box” law there on Friday.
The law does not prevent companies from conducting background checks once they have made a conditional job offer to a finalist. But it eliminates a standardized checkbox question about previous run-ins with the law, a common feature of job paperwork that makes it much harder for people to get back on their feet after serving their time. Firms with fewer than 10 employees are exempt from the law.
Sometimes called fair-chance hiring laws, such restrictions on how hiring managers solicit information about applicants’ criminal histories have grown in popularity over the past few years.
But the laws have typically applied only to hiring that involves taxpayer money, at government agencies and vendors who do business with the government. When President Obama moved to ban the checkbox last year, the executive action he took was limited to federal government hiring.
Inmates at a crowded California prison. CREDIT: AP Photo/Eric Risberg, File
Out of 24 states with fair-chance hiring laws, just nine extend to the private sector. Los Angeles is the 15th local jurisdiction to extend ban-the-box thinking to private firms. Among the five largest American cities, only Houston has yet to ban the checkbox.
Between 60 and 75 percent of people coming out of prison are unable to find work in their first year back on the street. Research indicates that an applicant’s chances of a callback drop by half if they indicate a criminal record—though white applicants who check the box fare significant better than black ones. There is also evidence that people who get far enough into the process to actually meet with a company representative are much more likely to get an offer despite their record—a key argument for eliminating the check-box filtering mechanism.
The idea’s spread during the latter years of Obama’s tenure seemed emblematic of the broader re-evaluation of a criminal justice system that is more punitive than rehabilitative. Formerly incarcerated people and their supporters rallied in front of the White House in 2015 to call for action, sharing stories of the hardships they faced in finding legitimate work after re-entering society.
The administration’s eventual move on hiring paperwork was just one in a flurry of progressive reforms to the incarceration system, all of which may be in jeopardy once president-elect Donald Trump takes office in January.
Americans leaving prison face high hurdles to regaining their economic and social footing without returning to crime. These obstacles are complicated to dismantle, rooted as they are in societal and individual prejudices about people with criminal pasts.
Policy changes can’t will charity into people’s hearts, of course, and there’s even some evidence to suggest that personal prejudices around the formerly incarcerated are so entrenched that fair-chance laws trigger ugly unintended consequences.
But as the National Employment Law Project notes, that analytic conclusion gets things backward.
“Rather than identifying the root of the problem—which is both coupling criminality with being African American and the dehumanizing of individuals with records—the argument blames the reform,” NELP researchers wrote in response. “This distinctly economic framework, which views employers as entirely rational actors, fails to appreciate the extent to which negative racial stereotypes continue to plague the hiring process.”
President Obama’s expansion of overtime pay goes into effect on December 1. But what happens if it gets rolled back in 2017? Here are some of the Department of Labor’s takeaways from a Congressional Budget Office report:
CBO finds that reversing the rule would strip nearly 4 million workers of overtime protections. According to the report, there are nearly 4 million workers whose employers will be required to pay them overtime when they work more than 40 hours a week when the rule goes into effect.
CBO finds that reversing the rule would reduce workers’ earnings while increasing the hours they work. The report finds that if the rule is reversed, the total annual earnings of all affected workers would decrease by more than $500 million in 2017. Further, these workers would earn less money while working more hours.
At a time when income inequality is already of great concern, CBO finds that reversing the rule would primarily benefit people with high incomes. If the rule were reversed, affected workers, most of whom have moderate incomes, would experience a loss in earnings. These losses would be accompanied by an increase in firms’ profits, of which the vast majority (CBO estimates 85 percent) would accrue to people in the top income quintile.
CBO finds that reversing the rule would not create or save jobs. The report finds no significant impact on the number of jobs in the economy.
Nearly 4 million workers.
This article originally appeared at DailyKOS.com on November 19, 2016. Reprinted with permission.
Laura Clawson is a Daily Kos contributing editor since December 2006. Labor editor since 2011.
The vast majority of undocumented immigrants who have been given the temporary ability to legally work in the United States are currently employed or attending school—helping them make “significant contributions” to various labor markets—according to a national survey released Tuesday by immigrant advocacy groups.
The survey took a look at 1,308 people who received legal work authorization and deportation relief through the Deferred Action for Childhood Arrivals (DACA) initiative, an 2012 executive action from the Obama administration aimed at assisting undocumented immigrants who grew up here in the United States.
According to the report, 95 percent of survey respondents are currently employed or enrolled in school. And nearly two-thirds of them reported receiving better pay under DACA, with almost half saying they found a job that “better fits my education and training.” Others said they now have a job with better working conditions.
The report also found that DACA recipients have gone into industries like educational and health services, nonprofit work, wholesale and retail trade, and professional and business services. Close to 6 percent of respondents started their own businesses—twice as high as the entrepreneur rate among the general American public.
The impact of DACA recipients on the U.S. economy has been enormous. Average hourly wages for DACA recipients have gone up by 42 percent, roughly an increase from $9.83 per hour to $13.96 per hour, according to the survey. More than half of all respondents said they recently purchased their first car, while 12 percent purchased their first home.
Sigifredo Pizana Hernandez, of Grand Rapids, Michigan, attends the “Rally for Citizenship” on Capitol Hill in Washington, Wednesday, April 10, 2013, where tens of thousands of immigrants and their supporters are expected to rally for immigration reform. CREDIT: AP Photo/Jacquelyn Martin
“These large purchases [of vehicles] matter for state revenue, as most states collect between 3 percent and 6 percent of the purchase price in sales tax, along with additional registration and title fees,” study authors wrote. “The added revenue for states comes in addition to the safety benefits of having more licensed and insured drivers on the roads.”
The survey was conducted by UC San Diego Professor Tom Wong, the advocacy group National Immigration Law Center (NILC), the immigrant rights group United We Dream, and the think tank Center for American Progress. (Disclosure: ThinkProgress is an editorially independent website housed within the Center for American Progress.)
This survey echoes findings from a similar report conducted last year, which found that DACA recipients were able to get jobs that better matched their skills and that paid them better wages.
This research helps present a clearer understanding about the impact of the DACA initiative, which from its inception has received sharp criticism from Republicans who say the policy is a show of President Obama’s “executive amnesty overreach.” In fact, Obama’s actions are legal and based on a decades-old legal precedent for the executive branch to exercise prosecutorial discretion for some immigrants who have “non-priority enforcement status.”
About 741,546 undocumented immigrants have benefited under DACA as of mid-September, according to the latest U.S. Citizenship and Immigration Services (USCIS) data.
However, GOP presidential nominee Donald Trump—who typically refers to immigrants in disparaging terms and has promised to build a wall between the United States and Mexico—has indicated that he would dismantle the DACA initiative altogether if he becomes president.
This blog was originally posted on ThinkProgress on October 18, 2016. Reprinted with permission.
Esther Yu-Hsi Lee is the Immigration Reporter for ThinkProgress. She received her B.A. in Psychology and Middle East and Islamic Studies and a M.A. in Psychology from New York University. A Deferred Action for Childhood Arrivals (DACA) beneficiary, Esther is passionate about immigration issues from all sides of the debate. She is also a White House Champion of Change recipient. Esther is originally from Los Angeles, CA.
A bunch of congressional Republicans (and two Democrats who should be ashamed of themselves) are very upset that the Obama administration plans to expand overtime pay eligibility. The lawmakers have written a letter to Labor Secretary Tom Perez expressing concern about changes that aren’t even being made, but mostly about the fact that they don’t want people to get overtime pay:
What is in the rule, which the members of Congress who signed the letter don’t like, is a long overdue increase in the salary an employee must be paid if an employer wants to avoid paying overtime. The current rule sets that exemption threshold at $23,660 a year—below the poverty line for a family of four. The proposed rule, as the representatives note, “would raise the salary threshold and require employers to pay overtime for all employees who make $50,440 or less per year.” The signers don’t like that, but the reasons they give don’t hold water.
The letter says the increase in the threshold would suddenly make 5 million employees eligible for overtime pay. That’s true, and it’s a good thing. Making employers pay their employees extra when they work more than 40 hours in a week is the purpose of the Fair Labor Standards Act. It’s good for those employees and their families, whether they get paid more or are simply allowed to spend more time with their families. And because it applies to all employers equally, it will not create competitive burdens.
The representatives claim the proposed salary threshold somehow fails to take into account the fact that “the purchasing power of a dollar is drastically different in various parts of our country.” But the claim is ridiculous. The point of the salary threshold is that workers paid less than this amount—even if they are classified by their employers as managers or executives—are automatically entitled to overtime protections. Essentially, this threshold separates workers with genuine managerial and professional responsibility, who have substantial autonomy over their work schedule and have real bargaining clout with their employers, from those workers who are simply labeled “managers” (often by employers precisely looking to avoid the obligation to pay overtime) but who nevertheless can be compelled to work long hours.
A fair day’s wage
? Workers in Las Vegas’s Culinary Union were denied a permit to protest outside the Palace Station Hotel & Casino, so they were like “fine, we’ll commit nonviolent civil disobedience … “
? This is vile behavior to see from a teacher, let alone a teacher whose school has elevated her as a model for others. And before dismissing it as a one-time occurrence, consider that the video was recorded by an assistant teacher who was sick of watching that sort of thing. And that at Success Academy charter schools:
Jessica Reid Sliwerski, 34, worked at Success Academy Harlem 1 and Success Academy Harlem 2 from 2008 to 2011, first as a teacher and then as an assistant principal. She said that, starting in third grade, when children begin taking the state exams, embarrassing or belittling children for work seen as slipshod was a regular occurrence, and in some cases encouraged by network leaders.
WASHINGTON. D.C.—Last night, President Obama gave his State of the Union address before a joint session of Congress—but barely mentioned unions. The president did touch on a number of issues important to workers—such as increasing manufacturing in America, taxing the rich more equitably, increasing education funding and increasing enforcement of trade laws—but said nothing about increased attacks on workers’ rights around the country during the last 12 months.
This despite 2011 being the a year in which unions (especially those representing public-sector workers) have been under unprecedented attacks in places like Wisconsin, Ohio and Indiana.
The only time Obama explicitly mentioned a union was in reference to “Master Lock’s unionized plant” in Milwaukee, which he said is now running at “full capacity” because the company brought back jobs from overseas.
At the beginning of his speech, Obama said: “At the end of World War II, when another generation of heroes returned home from combat, they built the strongest economy and middle class the world has ever known.” However, he did not mention the fundamental role that unions played in building that middle class. Unions represented nearly one-third of all workers in the decade following World War II.
One of the only times that President Obama did indirectly to address union issues was in what could be interpreted to be a reference to wanting more “flexibility” in contract language “to replace teachers.” Obama said:
Teachers matter. So instead of bashing them, or defending the status quo, let’s offer schools a deal. Give them the resources to keep good teachers on the job, and reward the best ones. And in return, grant schools flexibility: to teach with creativity and passion; to stop teaching to the test and to replace teachers who just aren’t helping kids learn. That’s a bargain worth making.
While some could interpret this language as attacking the contract clauses of teacher union contracts, American Federation of Teachers President Randi Weingarten did not see this as an anti-teacher union statement, telling In These Times, “I heard a different tone about what teachers and students need—as well as what he has always said about teacher accountability.” Weingarten further praised the speech, saying that it was about “fighting for the middle class, for economic fairness, taking on the banks, telling others to stop bashing and leading with accountability—it’s an important populist message for the times we are in. I think the president deserves that acknowledgement.”
The only other time that Obama referenced an event involving a union was in speaking about the role of workers (represented by the United Auto Workers union) in helping to revive the auto industry. Obama said: “In exchange for help, we demanded responsibility. We got workers and automakers to settle their differences. We got the industry to retool and restructure. Today, General Motors is back on top as the world’s number one automaker.”
While praising GM’s return to profitability, Obama did not mention how, despite the auto industry returning to profitability, the industry has done nothing to eliminate a two-tier wage system that was implemented as part of the bailout. The UAW did not return request for comment on the president’s section of the speech.
“There is little or nothing in this speech to oppose what most employers are doing; cutting jobs, busting unions, slashing wages, liquidating benefits, and running roughshod over workers in every way possible,” said UE Political Action Director Chris Townsend. “As for workers, we are forced to work for a poverty existence at a “competitive wage” until we tipple into the grave. How inspiring is that?”
Kim Bobo, executive director of Interfaith Worker Justice, criticized the speech for failing to emphasize the importance of protecting living standards and workers’ rights. “We need a national jobs policy that creates enough jobs for all those who are able to work, raises core standards around living wages and family-supporting benefits, stops and deters wage theft, and ensures that public and private sector workers have the right to collective bargaining,” she said in a statement Wednesday.
But despite the lack of positive references to the role of unions and organized labor, the speech did receive good reviews for Obama’s calls to renew America’s manufacturing sector, enforce trade laws more fairly, crack down on Wall Street, and reform tax laws to tax wealthy people at higher rates. (Billionaire Warren Buffet’s secretary was actually present for the speech to symbolize America’s dysfunctional tax code; her boss actually pays a lower tax rate overall than she does.) Specifically, he called for the creation of a “Trade Enforcement Unit that will be charged with investigating unfair trading practices in countries like China.”
AFL-CIO President Richard Trumka said:
President Obama’s speech tonight shows that he has listened to the single mom working two jobs to get by, to the out-of-work construction worker, to the retired factory worker, to the student serving coffee to help pay for college. …And tonight he made clear that the era of the 1% getting rich by looting the economy, rather than creating jobs, is over—what a contrast to the vision presented by presidential candidates squabbling over how much further to cut the taxes of the 1%.
The call for reviewing manufacturing and cracking down on unfair trade practices drew particular praise from United Steelworkers (USW) President Leo Gerard. He said:
President Obama has listened to us as American workers and laid out a vision of the America we want and need, one that creates jobs and prosperity for us and not the 1% who have looted the economy….The President’s commitment to discourage job outsourcing and promote insourcing is a ticket to a better economy.
We especially applaud the announcement to renew his policy to get tough on trade enforcement with a new unit to bring together resources and investigators from across the government to go after unfair trade practices in countries around the world, including China.
The GOp chose Indiana Governor Mitch Daniels to deliver the party’s response to the State of the Union address. Daniels has spearheaded the effort to pass “Right-to-Work” legislation in Indiana, which would weaken private-sector unions. On its website, the AFL-CIO said the choice of Daniels sends a “clear signal the party is making attacks on working people a top priority in the 2012 elections.”
Surprisingly, though, Daniels didn’t say anything about unions. At least from my perspective last night, it was as if the massive fights for collective bargaining rights we witnessed in Wisconsin and Ohio last year (which, of course, continue in Wisconsin) never even happened.
Full disclosure: the UAW and USW are In These Times sponsors.
This blog originally appeared in inthesetimes.com on January 13, 2016. Reprinted with permission.
Mike Elk is a labor journalist whose investigative work has been cited on the front page of the New York Times and debated by Whoopi Goldberg and Barbara Walters on ABC’s The View. Elk won a Sidney Award for his coverage of how corporations crafted legislation to exempt prison labor from U.S. minimum wage laws. Elk has also written for the New York Times, the Washington Post, Reuters and The Nation and is currently a reporter at Politico.
President Obama transformed his last State of the Union speech last night into his first farewell address. From his opening twitting legislators for being “antsy” to get back to Iowa, the president acknowledged that in an election year, with a bitterly obstructionist Congress planning to spend less than 90 days in session, not much is likely to get done. Instead of an agenda for action, he offered instead an eloquent summation – and large doses of common sense.
The common sense was a necessary corrective to the stuff and nonsense of the political campaign trail. Noting the progress made in recovering from the Great Recession, the president reminded that the U.S. economy is the “strongest and most durable in the world,” now enjoying the longest streak of months with jobs creation in its history.
In contrast to the hysteria generated by the Trumped-up campaign, he said that the U.S. is the “most powerful nation on earth.” Its military has no competitor; “It’s not even close.” He sought to put the fears fanned by the ISIS and the acts of terror in perspective. We’re threatened less “by evil empires, more by failing states.” ISIS and Al Qaeda terrorists can create terrorist acts across the world. But this is not “World War III,” and it is a disservice to call it that. The terrorists are violent thugs but “do not threaten our national existence.” Needless to say, Republicans immediately panned this common sense and revved up their hysteria. Good sense is a first casualty of terror.
The president celebrated the reality that he has begun to transform our energy policy and essentially declared victory in the debate over climate change. The debate is over. The world was acting together to begin to address climate change. And America is leading, with the president claiming that we had cut carbon pollution more than any other country on earth.
If the economy is so strong, why are the people hurting? Here, Obama reiterated his passive voice populism. Americans “feel anxious” because we live in a time of “extraordinary change.” Technology is transforming our economy in “profound ways.” That’s why workers have less leverage, companies less loyalty, wealth and income is more concentrated. We have to make change our friend, and navigate its currents. He then offered a sensible, if modest, agenda on education, extending shared security guarantees, greater support for the working poor.
But technological change has always been with us. Globalization is the result of policy, not an act of nature. Yes, we have to navigate the changes wrought by technological change. But the reason Americans are “anxious” is that the rules have been rigged to favor the few, not because technology mandates less worker leverage or company loyalty.
The president did offer a dollop of more active voice populism later on, an unstated tribute to Sens. Bernie Sanders and Elizabeth Warren, when discussing the fierce debate over “what role government should play in making sure the system’s not rigged in favor of the wealthiest and biggest corporations.”
“Working families won’t get more opportunity or bigger paychecks by letting big banks or big oil or hedge funds make their own rules…Food stamp recipients didn’t cause the financial crisis; recklessness on Wall Street did. Immigrants aren’t the reason wages haven’t gone up enough; those decisions are made in boardrooms…”
“In this economy, workers and start-ups and small businesses need more of a voice, not less.”
Yet this populist frame led nowhere. The president offered no agenda for empowering workers, no pledge of executive action to give government contract workers the right to join a union. Instead he pledged only to “lift up many businesses” that are doing the right thing.
Similarly on foreign policy, after stating the fact that we are the most powerful nation in the world, the president argued that our challenge is how to exercise leadership without pretending to police the world. Sensibly, he argued this would require a sense of priorities. Yet, he suggested that the U.S. would be on patrol against instability in the Middle East, Afghanistan and Pakistan, Ukraine, Central America, Africa and Asia. The challenge was to mobilize allies to “pull their own weight” in acting with us. But if the U.S. is on guard across the world, then it isn’t surprising that our “allies” as in the Middle East have their own priorities and are happy to let us do the heavy lifting elsewhere.
The president returned, somewhat wistfully, to the themes that launched his presidency – the need to recover our sense of one America, to overcome partisan division and discord, the strengths and spirit that sustain us as a nation. In doing so, he reminded us of the historic nature of his presidency, and of the dignity and decency with which he has borne the burdens of office.
He also used this theme to call for us to “fix our politics,” to change the system so people don’t think it is rigged in favor of the rich or the powerful or the narrow interests. That requires changing how we draw congressional districts, reducing the influence of big money, and making voting easier, rather than harder. The president pledged to spend part of the next year supporting these reforms at the state and local level, even while pushing against the wall of opposition at the national level.
Obama knows how to deliver a speech. Like Lincoln, he uses logic and common sense to stake his position and make his case. He has an author’s care about language. But in trying to describe our common ground, he has chosen not to “litigate the past,” either on our economic course or on our foreign policy follies. At a time when Americans had to learn clearly how failed conservative doctrines had led us into the fix we are in, the president chose not to issue the indictment. That was true at the start of his administration as he inherited a failed war and a collapsing economy. And it is true as his term draws to a close, despite the unrelentingly bitter partisan and ideological opposition he has endured.
This blog originally appeared in ourfuture.org on January 13, 2016. Reprinted with permission.
Robert Borosage is a board member of both the Blue Green Alliance and Working America. He earned a BA in political science from Michigan State University in 1966, a master’s degree in international affairs from George Washington University in 1968, and a JD from Yale Law School in 1971. Borosage then practiced law until 1974, at which time he founded the Center for National Security Studies.
Millions of workers who have not been receiving overtime pay would become eligible under a newly announced rule change. According to the Economic Policy Institute, the number of newly overtime eligible workers could be as high as 15 million. The change would update what is known as the “white collar” exemption to the overtime pay rules that covers certain executive, administrative and professional employees. Currently, these types of employees can be classified as “exempt” (meaning not entitled to mandatory overtime pay) so long as they are paid a salary of at least $455 per week ($23,660 per year) – an amount that is below the poverty line for a family of four and that has not been adjusted since 2004. Under the new rules, the minimum salary requirement for exempt white collar workers would increase to $970 per week ($50,440 per year) for 2016 and be indexed going forward to keep pace with inflation. Workers whose salary falls below this level would now be classified as “non-exempt” and guaranteed time-and-a-half for all hours worked over 40 per week.
While some big business groups are opposing the proposed changes, claiming terrible economic consequences will result if their labor costs increase; this is nothing new and the same cry that is heard every time they are forced to increase wages. The facts and history do not, however, support their dire warnings. In cities such as San Francisco and Santa Fe where the minimum wage has for years been set well above the federal minimum, and even coupled with other employee benefits such as paid sick leave and health-care, the impacts on employment have been essentially zero. Contrary to the claims of catastrophic job loss and business closing, studies have shown “no measurable” negative effect on employment when cities or states have raised their minimum wage above the federal minimum wage. Historically, increased pay for workers tends to generate a positive feedback loop – workers earn more, spend more, resulting in positive economic activity.
To put the pay figures in perspective, look back 40 years. In 1975 the minimum salary amount was adjusted and set to $250 per week. At that time, 65% of the American workforce was paid less – entitling them to overtime pay. Today, however, a mere 11% of the workforce earn less than the $455 per week minimum. Today, the $250 per week minimum salary would equate to more than $980 per week (approximately $51,000 per year) if it had been annually adjusted per the Consumer Price Index. So, to merely keep middle-class workers in the same economic position they were in as of 1975, the current $455 per week minimum salary would need to be increased to at least $980 per week. This is roughly what is being proposed under the new rules.
The Fair Labor Standards Act (FLSA) was implemented in 1938 to specifically address the serious problems caused by the overworking and underpayment of our nation’s core middle-class workforce. The two primary reasons the FLSA was put into place are:
Second, requiring the payment of time and a-half for all hours over 40 per week creates and strong economic incentive for employers to hire more people and spread the work, instead of overworking their existing staff. This helps to reduce overall unemployment in the U.S. economy, an issue every bit as relevant today as it was 75+ years ago.
The proposed changes to the overtime pay regulations are important to restore fair pay to millions of middle-class workers and are consistent with the overall goals and policy objectives that originally inspired the federal overtime pay laws.
About the Author: The author’s name is Jillian Johnson. Jillian Johnson is a freelance writer from New Jersey who has contributed to an array of blogs of various industries, particularly business, finance and health. She freelanced for a local NJ parenting magazine “Curious Parents” magazine and wrote for her college newspaper, “The Tower,” ultimately becoming the Editor-in-Chief. Jillian holds a BA in Communications and is currently working towards a BSN.
President Obama’s administration took another promised step on Tuesday towards raising the living standards of American workers, and Republicans and business groups are not likely to be able to stop it.
Using the administration’s power to update workplace rules regarding premium pay for overtime work, the Department of Labor on Tuesday began taking steps that could bring higher pay or more leisure time to an estimated 5 million middle-income workers by next year.
Business and conservative groups are likely to try to block the new overtime rules with court challenges and legislation, just as Republicans are still blocking President Obama’s modest proposed legislative increase in the minimum wage to $10.10 for low-income workers. But the political and legal winds favor the administration.
There’s a strong legal and factual case for the Department of Labor’s action. The current regulations are grossly out-of-date and out of sync with the intention of the original legislation. According to administration calculations, the new rules should give at least 5 million middle-income workers a boost in pay if they work more than 40 hours a week or fewer unpaid hours at work and more time for themselves and their families if they are not forced into overtime work.
Now all hourly workers are guaranteed time-and-a-half pay for working more than 40 hours, but the rules do not require employers to pay time-and-half to salaried workers who make over $23,660 a year—even though that is below the poverty line for a family of four. Salaried workers below the threshold are regarded as being social equivalents to hourly workers. In 1975, 62 percent of salaried workers earned beneath the threshold and were guaranteed overtime pay by law, according to Ross Eisenbray of the Economic Policy Institute, but today the threshold only protects 8 percent of salaried workers. The new rules with a threshold of nearly $51,000 a year would provide overtime protection to about 44 percent of salaried workers.
If a salaried worker earns above the threshold and is a bona fide executive, administrative or professional employee, the employer does not have to pay him or her overtime. But this “white-collar exemption” is now widely abused, and employers give nominal managerial titles and a few administrative tasks to people in order to avoid paying time-and-a-half for more than 40 hours of work. Christine Owens of the National Employment Law Project, a pro-worker research and advocacy group, also wants the new rules to more adequately define the kind of work that qualifies for the white collar exemption. At this point, the Labor Department has not proposed such revisions in defining who is a manager or professional.
“While we appreciate that doubling the salary threshold will extend overtime pay protections to millions of currently exempt workers,” she wrote in an organizational statement on the rules, “we are concerned that failure to address the existing tests’ vague definitions, laissez-faire approach to the mix of ‘salaried’ and ‘hourly’ duties required for exempt status and other shortcoming threaten to deny far too many workers the overtime pay protections they deserve and the statute contemplates.” NELP, for example, wants the rules to state that exempt workers cannot spend more than half of their time on non-exempt work.
With unions at their weakest since the 1920s, more public policy action to raise wages is necessary, not only for minimum-wage workers but also for middle-income workers, such as those protected by overtime rules. Also, inequality continues to grow. University of California at Berkeley economist Emmanuel Saez recently calculated that despite recent growth in income of workers in the bottom 99 percent (an increase of 3.3 percent from 2013 to 2014), top 1 percent incomes grow faster and families in that sliver of the population captured 58 of real income growth per family from 2009 to 2014.
Overtime protection alone won’t reverse that trend, but it will make a real difference in the incomes and quality of life for millions of working families.
This blog was originally posted on In These Times on July 1, 2015. Reprinted with permission.
About the Author: The author’s name is David Moberg. David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy. He can be reached at firstname.lastname@example.org.