President Obama has outsmarted Congressional Republican obstructionists with a planned executive action that will raise the wages of millions of American workers.
President Barack Obama is preparing to do what the U.S. economic recovery has been slow to accomplish: raise the wages of millions of Americans.
His administration is drafting new rules on who qualifies for overtime compensation, forcing more businesses to pay time-and-a-half after 40 hours of work. Many employees now earning as little as $23,660 a year — below the federal poverty line for a family of four — aren’t entitled to overtime pay because they are considered managers.
Millions of workers in the service sector have been victimized for years by the tactic of being labeled a manager, but not receiving commiserate pay for the position. By not paying managers overtime, corporate giants can keep wages artificially low. With a stroke of President Obama’s pen, millions of workers will be paid for the extra hours that they are currently working for free.
Managers at fast food restaurants like McDonalds and retail stores often work 50-70 hours a week for a salary that leaves them below the federal poverty line. One of the fastest ways to rebuild the middle-class is to make sure that the system is fair, and workers are being paid for the hours that they are working. The executive action won’t apply to all managers, just those who are earning under a defined amount. Some officials at the Department of Labor want the limit to be set at $51,000. Democratic Senators are urging the President to go as high as $56,680.
Republicans are breaking out their widely debunked claims that raising wages kill jobs, but the change will be very popular with workers and provide an immediate boost to the economy. President Obama and his pen are going to make things better for millions of Americans.
If businesses counter Obama’s move by hiring fewer managers, they will play into Democratic hands by feeding the growing movement for higher wages. Either way, businesses will end up paying their workers a more livable wage.
The basic issue behind this executive action is fairness. Workers deserve to be paid either a salary that reflects their hours or compensation for the actual hours that they are working. With one stroke of his pen, President Obama will outsmart his Republican opponents and deliver a victory for millions of workers.