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President Obama just announced a raise for up to four million middle-class Americans starting December 1st, 2016. Workers who have been exempted from receiving overtime pay and who earn as little as $455 a week are currently exempt from getting overtime for extra work. As of this Wednesday, workers earning less than $47,476 per year will once again qualify for overtime pay when they work more than 40 hours.
President Obama raised the floor to $984 per week, when he used his authority to help American workers under the Fair Labor Standards Act, which was first passed in 1938. Obama wanted to help America's hardest working members of the middle-class, and without Congress this was the best solution short of a bill raising the Federal minimum wage. Even more important, the President's rules change also specifies that every three years, the overtime thresh-hold should be updated, or raised for inflation.
"It's amazing what people can do when you treat them with dignity and respect," said Vice President Biden in remarks delivered to an ice cream factory in Ohio (after noting that he LOVES ice cream), "It goes to the hard of the most important issue of our time, expanding and supporting the middle class. It's who we are, that's our strength."
Economists say this will result in $12,000,000,000 being earned by middle-class Americans in the next 10 years alone. According to Vice President Joe Biden only 7% of American workers qualify for overtime before this change was finished. Until this Wednesday, a salaried employee earning more than $23,600 was considered exempt from rules that require employers to pay overtime when they work more than 40 hours. California Democrats are thrilled that their constituents will benefit from fair pay for a hard day's work in the first state to mandate a $15 minimum wage to be phased in by 2020 as the LA Times reports:
Rep. Mark Takano (D-Riverside), who had pushed the White House to revise the overtime rule, called it a bold step by the president that will offer voters a clear choice as both parties have been forced to address income inequality.
"You see candidates capitalizing on anger in the electorate. And what is that anger? It's all about a feeling that the economy is rigged, and that the government is complicit," Takano said in an interview. "The president has taken a serious step to un-rig that unfairness."
Nobody can dispute that there has been a proliferation of low paid "managers" on salary who were earning $24,000 a year to avoid overtime rules were not really part of management in America's large corporations like Walmart, McDonalds and Home Depot. The Fair Labor Standards Act hasn't been adjusted since all the way back in 1975 when the $23,600 figure was set, and never updated for inflation. Back then 62% of the American workforce was eligible for overtime pay when working over 40 hours.
"In America, the most important belief is that we think," said Biden today, "They think, 'If I work hard, if I do the right thing, I can make it, I, Can, Make It.' Since the 30s, the law was clear and both parties supported it, if someone works more than 40 hours, they should get paid for it."