Big Business Uses Universities in Last Ditch Effort to Kill Fair Overtime Rules

For decades corporate CEOs have used their political power to neuter the Federal Wage and Hour laws -- first passed in 1938 during the New Deal to provide Americans a 40-hour work week and guarantee that most working people received time and half for overtime.

Last year, the Obama administration proposed new rules to put teeth back into the law so that it once again served its original intent.

But now big business is making one last desperate attempt to kill the new rules, and it is using a group of innocent-appearing "public spirited" shills to do its dirty work: America's universities.

Business has recruited universities and colleges to file letters with the Department of Labor seeking to prevent implementation of the new tougher overtime rules -- claiming they simply can't afford it.

Oh no, they say, if we are forced to pay our research assistants, librarians, cafeteria workers and other non-academic employees the overtime they are due, we will have to raise tuitions or cut back "academic" programs.

But something is wrong with this picture. While big universities -- many of which are heavily dependent on big business for research grants and donations -- claim they can't afford overtime pay, they are falling over themselves to raise the salaries of their own CEOs.

In fact, 32 university CEOs made over $1 million in 2013. And the average pay for CEOs of public universities went up 7 percent in 2014 -- to $428,000.

In 2013, the country's highest paid university CEO was Columbia's James Bollinger, who made $4.6 million -- about as much as 153 cafeteria workers making $15 an hour. Bollinger made $2,211 an hour.

And while they say they can't "afford" to pay research assistants overtime, they pay their football coaches millions.

Last year Alabama's Nick Saban made $7 million.

In fact, 71 universities pay their football coaches more than $1 million dollars a year. And many assistant coaches made $800,000 a year.

Now here are institutions that really have their priorities straight: deny overtime pay to ordinary employees so they can pay their CEOs and football coaches fortunes.

With priorities like these, it should come as no surprise then that these organizations with purely "educational" missions should line up with the country's corporate elite and against their employees.

The Federal Wage and Hour Law was intended to assure that every working person is covered by its overtime requirements, with the exception of professional personnel and those working in executive and managerial positions. But to prevent corporations from using the professional, executive and managerial position exception as a giant loophole, the law required that no one who made less than a specific wage threshold could be qualified as "executive, professional or managerial." The law gave the power to set that threshold to the Department of Labor.

Three decades ago when the wage threshold was set, 62 percent of all workers made less than threshold and qualified for automatic overtime, no matter their job classification.

But the threshold has not been materially increased for three decades. As a result, only 8 percent of all employees now qualify for automatic overtime. And, not surprisingly, many companies have driven a Mack truck right through the "professional, executive and managerial" loophole. As a result many employees, like some who spend most of their days making sandwiches at Subway, are classified as "managers" and required to work 50 or 60-hour weeks with no overtime pay. In fact, they are often put on fixed - if tiny -- "salaries" so they get no pay for overtime at all.

The disappearance of overtime protections is precisely one of the rules of the economic game that has been rigged by the CEO class to assure that virtually all of the new income growth in America has gone to the top 1 percent.

Last year, the Obama administration proposed increasing this threshold to $50,000, which -- after adjusting for inflation -- would come close to restoring the original threshold level and increase take home pay for millions of ordinary Americans. Not surprisingly, CEOs and big corporations don't like this idea at all. They don't want any rule that would limit their ability to siphon off income growth for themselves, their stockholders and Wall Street banks.

But most ordinary Americans instinctively understand the need to raise this wage threshold. In a poll last year by Public Policy Polling, 73 percent supported a substantial increase in the threshold. Sixty-five percent of voters think workers making up to $75,000 a year should be allowed to receive overtime pay when working more than 40 hours in a week regardless of job classification.

You'd think that institutions of higher learning might have a different view of overtime pay than big, for-profit corporations. But I suppose we shouldn't be surprised. Universities have been treating employees like big corporations for many years. And for me, the way universities treat their non-academic employees is very personal.

On the night of April 4, 1968, I was studying in my dorm room at Duke University when a fellow student burst into my room, in tears. He blurted out words that were being repeated all over the country: "Martin Luther King has been shot."

The next day we organized a march to home of the president of the University. Half of the crowd listened to an address by the president in the front yard. The rest took up positions inside.

When he was done, a group of us greeted him at the door. We said, "Mr. President, we appreciate your speech, but we have several demands. We'd like to sit down and negotiate, and we're not leaving until our demands are met." By then, there were riots in cities nationwide, and a machine gun mounted on the steps of the U.S. Capitol. We believed that we had a responsibility to take action -- to make change.

The changes we sought centered on the way our university treated its non-academic employees.

  • An increase in the1.15 per hour wage for many of the mostly black, non-academic employees (even then1.15 was a pittance).
  • Recognition of the American Federation of State County and Municipal Employees (AFSCME), who had been organizing a union for non-academic employees.
  • Withdrawal of the president from an all-white Hope Valley Country Club.
Three days later, we were still sitting in the house when the head of student activities came to tell us that the president of the University had had a nervous breakdown. The Chairman of the Board of Trustees would fly in from Detroit to take interim control of the situation; he was the Vice President of Ford Motor Company. Our leadership met, and after several hours of deliberation, we decided to shift tactics. We would move our protest to the quadrangle of the University in front of the massive Duke University Chapel. There we would maintain a vigil until our demands were met.

We marched to the quadrangle and were joined by representatives of AFSCME, who announced they had called a strike.

Over the next two days, the "Duke Vigil," as it came to be called, grew from several hundred students to thousands. Sororities prepared food for the demonstrators. A group of faculty members called their own work stoppage. Threats were made by the North Carolina Ku Klux Klan to attack the students. The state police were called out to protect the campus. Joan Baez and Pete Seeger came to sing. Senator Robert Kennedy sent a telegram of support. Dr. King's funeral was broadcast live to the crowd. News came pouring in about riots and unrest all across America.

Negotiations finally began. About a week after it all had started, the administration signed an agreement with the student leadership, meeting our demands. Wages were to be increased, the union was on its way to formal recognition, and the President quit the all-white country club. We had won.

That battle taught me that if we organize, ordinary people can actually make change.

I suppose that "vigil" was the decisive event in my life. I was hooked. That experience convinced me that the most empowering and fulfilling calling to which I could possibly commit my life was the struggle for justice.

But that struggle for justice in America is a marathon, not a sprint. And over the last thirty years, American elites have found new ways take the fruits of our ever more prosperous economy for themselves, instead of allowing them to be shared by those who create that wealth through their daily work and sacrifice.

The incomes of ordinary Americans have not been stagnating because our economy has failed to grow. In fact our per capita Gross Domestic Product has increased 48 percent over that period.

Neither have they stagnated because of some law of nature -- or because of global forces beyond our control.

In fact, they have stagnated because of rules that have been rigged by living, breathing human beings who have used the power of lobbyists and big campaign contributions to prevent our government from leveling the playing field for all ordinary Americans.

The emasculation of the overtime protections is without a doubt one of the ways CEOs and big corporations have rigged the rules of the economy to benefit themselves.

But when -- any day -- the Obama administration publishes final rules that restore those protections, over the objections of the big corporations and big universities -- it will show the world once again that living, breathing human beings can change those rules and create a more just, more prosperous future for us all.

Robert Creamer is a long-time political organizer and strategist, and author of the book: Stand Up Straight: How Progressives Can Win, available on Amazon.com. He is a partner in Democracy Partners and a Senior Strategist for Americans United for Change. Follow him on Twitter @rbcreamer.