The Problem With Not Paying The Middleclass Overtime Pay

Overtime is still the law, but it has been allowed to erode for decades. Now, by definition, it no longer covers the middle class. Only workers earning less than $23,660 per year — below the poverty line for a family of four — qualify for mandatory overtime pay. What Gives?

Billionaire venture capitalist and champion for middle-out economic policies Nick Hanauer talked about how the lack of overtime pay affects unemployment that inadvertently bolsters job security.

“In the absence of a law requiring me to pay you overtime if you earn under a certain amount, you end up working harder—and the harder you work, the fewer employees I need. The fewer employees I need, the higher the unemployment rate. The higher the unemployment rate, the more leverage I have to “encourage” you to “do what it takes” to keep your job. And so you work even more hours, pushing unemployment up and wages down. And that, my friends, is one of the little tricks that keeps you poor and me rich.” -Nick Hanauer

According to Hanuer’s perspective, lack of overtime pay is a self-fulfilling and self-defeating situation all in one. On one hand the employed works harder – increasing productivity – securing the job security of the employed however, the need for additional staff becomes unnecessary. Companies in effect are “pimping” employees because they’re getting more work at a much cheaper rate and the unemployed tend to stay unemployed because they’re not needed.

This overtime quandary can be fixed. The President has the power to to raise the income threshold for overtime. If he restored federal overtime standards to where they were at their 1975 levels that would cover salaries up to $69,000.00. That would put more money into the pockets of most hard working middle class Americans – one step toward restoring America’s dismantled middle class.

The takeaway – All workers deserve an honest day’s pay for an honest day’s or night’s work.

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