A Stroke Of Obama’s Pen Will Lift 10.4 Million Workers Into the Middle Class

Obama signs health care reform bill for veterans in Washington
Over the past month there has been quite a bit of commentary on both how the President is taking executive initiative to get some long-needed things done, and how well the economy is doing. It is true the economy is showing respectable GDP growth, Wall Street is booming, and there has been consistently strong job growth. However, the average American’s is well-aware that their financial situation is not improving and it is due in great part to stagnating wages that the incoming Koch Congress will perpetuate and if possible make much worse.

President Obama has certainly done “almost” everything within his power to lift Americans out of dire poverty into just “normal” poverty by calling on Republicans to raise the minimum wage, but that is, and has been, a non-starter for the Koch Congress; their inclination and hope is abolishing the minimum wage outright. Besides, raising the minimum wage to $10, or even $15, per hour is not going to accomplish much in the way of rebuilding the vanishing middle class or relieving poverty because those minimum wage workers will still be earning incomes below the federal poverty line.

The President certainly champions “growing the middle class” in every economic speech he delivers and one truly believes he is sincere, but thus far he has not taken advantage of the executive authority he has to make it happen for over 10 million Americans. It really makes even an avowed Obama supporter wonder; is the President terrified of the Koch brothers, or devoted to the U.S. Chamber of Commerce, Wall Street, and corporate America to really “grow the middle class” like he claims is crucial to the continued growth of the economy. Something seems amiss. There is a seeming incongruence between the President’s claim he wants to expedite growing the middle class, and his regular economic meetings with the U.S. Chamber of Commerce, Wall Street titans, and corporate CEOs whose only interest is growing their profit margin and not the middle class.

There is hope, though, because last June the President took a tiny step and issued an executive order for federal contractors and instructed the Department of Labor to investigate how best to help Americans out of poverty and into the middle class by adjusting the threshold for salaried workers to get overtime pay. To assist the President, and save precious years of investigation and discussions on how best accomplish his goal of rebuilding the middle class, here is a simple solution that eludes the President’s economic advisors and will enrage the Kochs, U.S. Chamber of Commerce, Wall Street, and corporate CEOs.

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Millions of Americans actually earn more than the minimum wage, yet they are still barely making it compared to thirty years ago. The big difference is that there has not been an increase in threshold for salaried workers to earn overtime pay since the 1970’s. Subsequently, it has contributed greatly to the income inequality crushing their financial situation and a major factor in the demise of the middle class while corporations and big business are reaping inordinate wealth.

As it works out economically, “fair overtime standards are to the middle class what the minimum wage is to low-income workers.” It may not, in fact, be the be all, end all, to rebuild the vanishing middle class, but according to noted economists, “it is an indispensable labor protection that is absolutely essential to creating a broad and thriving middle class.” It is also something that President Obama can unilaterally change with a stroke of his pen over an executive order that will leave Republicans, the Koch brothers, Heritage Foundation, Wall Street, U.S. Chamber of Commerce, and corporate CEOs bitching loudly that Obama is an overreaching dictator; but well within his Executive Branch constitutional power.

According to the decades old Fair Labor Standards Act (FLSA), there is a nominal wage level below which every worker qualifies for mandatory time-and-a-half overtime pay; even if they are on a salary. Like many economic protections for American workers, that level has only been raised once since 1975, and compared to the 65% of salaried employees earning overtime pay in 1975, only 11% are covered today.

What that means for salaried workers is that if they make one penny over $23,660 annually (poverty level for a family of three), they are not entitled to overtime pay regardless if they work 41 hours a week or 80. It is a bonanza for businesses, particularly large corporations, and the reason why last year House Republicans passed a so-called “jobs bill” eliminating overtime pay for all workers. As one of the House’s storied jobs bills the Democratically-controlled Senate would not consider, it will be one the Koch Senate will pass easily.

If the President simply adjusted the salary threshold for inflation since it was last raised in 1975, it would be a more significant income increase for over 10 million low and low middle-class American workers than raising the hourly wage to $15 per hour for the rest of the poverty-wage workforce. It is also something that ALEC, the Chamber of Commerce, the Heritage Foundation, or the Koch Congress cannot prevent because the FLSA is the purview of the Executive Branch.

For about 10.4 million American workers who have lost FLSA protections since the 1970s, billionaire venture capitalist Nick Hanauer proposes the President raise the FLSA threshold to $69,000 annually to restore the protections that were intended to cover all the workforce that was covered in 1975 and raise up 10.4 million workers into the middle class. It is noteworthy that the wealthy elite class’s income has not stagnated and, in fact, has grown exponentially while the rest of the population has not kept up with inflation. It is one of the major contributors to the income inequality decimating the majority of the population and keeping the economy from seriously robust growth.

According to research just last year, if thefederal minimum wage had kept pace with the earnings of the richest one-percent of income earners,” the hourly minimum wage would be $22.62 and that alone would “lift tens-of-millions of Americans out of poverty.” That figure is based on the richest one-percent’s earning rate that increased 212% over the past 20 years, and it is high time the rest of the workforce that produced that 212% wealth increase share in the fruits of their own labor. There is no way the Koch Congress will raise the minimum wage, but President Obama can ensure salaried workers at least earn overtime pay; not a raise, just what the FLSA protections were created for.

President Obama has not, as of late, been reluctant to take action on his own while Republicans fail to act for anyone but their wealthy overlords the Koch brothers, Chamber of Commerce, and Wall Street. It is true that last June he signed an executive order directing the FLSA to ‘investigate’ raising the salary threshold to help all salaried workers putting in 50-60 hours weekly without overtime pay; but what is there to investigate? He is the President, head of the Executive Branch, and with a simple stroke of his pen can raise up 10.4 million Americans into the middle class thus growing the economy, spurring more job growth, increasing revenue, and fulfilling one of his oft-stated goals; rebuilding the middle class.



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