We talked about how labor unions have been deliberately targeted for extinction and how that has contributed to wage stagnation and income inequality, but labor unions are just one piece of the puzzle.
There’s labor unions and then there’s the state side – government regulations and laws that helped create a middle class. The state side of the equation includes things like minimum wage and family and medical leave and unemployment insurance and laws to protect against discrimination and also overtime.
This is overtime:
The federal overtime provisions are contained in the Fair Labor Standards Act (FLSA). Unless exempt, employees covered by the Act must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay.
And this is who used to get it:
In 1975, more than 65 percent of salaried American workers earned time-and-a-half pay for every hour worked over 40 hours a week. Not because capitalists back then were more generous, but because it was the law.
And this is who gets it now:
Only workers earning an annual income of under $23,660 qualify for mandatory overtime. You know many people like that? Probably not. By 2013, just 11 percent of salaried workers qualified for overtime pay, according to a report published by the Economic Policy Institute. And so business owners like me have been able to make the other 89 percent of you work unlimited overtime hours for no additional pay at all.
And here’s what an enterprising political party that was looking to remain relevant to a huge group of people might do about that:
Fulfilling the “opportunity agenda” in his State of the Union address, President Obama signed a memorandum on March 13, 2014 that begins the process of updating the Fair Labor Standards Act’s overtime rules. In some cases, the president said, the federal rule originally designed to limit overtime for highly paid employees now covers workers earning as little as $23,000 a year.
Here’s an example of the type of employee who gets screwed by this, and this is the deliberate government action that cut their wages:
But in 2004, President George W. Bush’s Department of Labor overhauled the rules, which accomplished two things: First, it raised the salary threshold below which all workers are entitled to overtime, from $250 per week to $455 per week. And second, it reorganized all the exemptions in such a way that more employees wouldn’t qualify because of what they did on the job. Under the new rules, people could be defined as managers exempt from overtime, for example, while doing grunt work and supervisory work simultaneously.
I live and work in an area where lots and lots of working class, hourly people still receive overtime. I can tell you that they know exactly what it’s worth. They can tell you how many hours they worked “over” the previous week and in the next sentence they will tell you they can rely on an increase in their hourly wage and paycheck for that overtime work.
Maybe we could put members of the two groups in a room, the working and lower middle class people who still receive overtime and those who don’t. They can compare jobs, hours worked and pay stubs. Then they can ask their elected officials how this was allowed to happen and what they plan to do about it.