Obama has a pen and a phone and the NY Times, which reports that Obama thinks it is time for more people to get a raise. Or at least, time for employers to be saddled with more paperwork:
Obama Will Seek Broad Expansion of Overtime Pay
WASHINGTON — President Obama this week will seek to force American businesses to pay more overtime to millions of workers, the latest move by his administration to confront corporations that have had soaring profits even as wages have stagnated.
On Thursday, the president will direct the Labor Department to revamp its regulations to require overtime pay for several million additional fast-food managers, loan officers, computer technicians and others whom many businesses currently classify as “executive or professional” employees to avoid paying them overtime, according to White House officials briefed on the announcement.
Spending other people's money! We quickly segue to the likely price of meals:
Conservatives criticized Mr. Obama’s impending action. “There’s no such thing as a free lunch,” said Daniel Mitchell, a senior fellow with the Cato Institute, who warned that employers might cut pay or use fewer workers. “If they push through something to make a certain class of workers more expensive, something will happen to adjust.”
In ObamaWorld a bunh of employees who were previously taking home X will suddenly get X+ and a bunch of fat cats (presumably the Koch brothers and Mitt Romney's sons) will just have to make do with a bit less.
Here on the lonely streets of Realityville we expect job restructurings and administrative headaches. And even this supporter of the proposal needs to think through his talking points:
Jared Bernstein, the former chief economic adviser to Vice President Joseph R. Biden Jr., and the former executive director of the White House Task Force on the Middle Class, embraced Mr. Obama’s move.
“I think the intent of the rule change is to make sure that people working overtime are fairly treated,” he said. “I think a potential side effect is that you may see more hiring in order to avoid overtime costs, which would be an awfully good thing right about now.”
So some folks near the bottom of ther pay ladder will have a new job-sharing scheme imposed on them, cutting their total hours and almost surely cutting their pay. Oh, that's a win for the little guy, all right.
Let's have a brief To Be Fair interlude:
Under the new rules that Mr. Obama is seeking, fewer salaried employees could be blocked from receiving overtime, a move that would potentially shift billions of dollars’ worth of corporate income into the pockets of workers. Currently, employers are prohibited from denying time-and-a-half overtime pay to any salaried worker who makes less than $455 per week. Mr. Obama’s directive would significantly increase that salary level.
Mr. Bernstein, now a senior fellow at the Center for Budget and Policy Priorities, a liberal research group, and Mr. Eisenbrey wrote a paper last year urging the administration to raise the salary threshold for overtime to $984 a week. Their study estimated that in any given week, five million workers earning more than the current threshold of $455 a week and less than $1,000 a week are likely to be exempted from overtime. President Bush raised the threshold to $455 in 2004.
Mr. Bernstein said, “Remember, inflation has eroded this threshold a great deal over the years, so it’s hard to see why it’s unfair to make that adjustment.”
I don't remember inflation being real high between 2004 and 2014 but I guess that is the talking point du jour. This inflation calculator says a 25% adjustment would be about right, but progs want to round that to 100%, so hey, hey. As to why this government interference in the private labor market makes any more sense than raising the minimum wage, well, I don't want to ask. Generosity with other people's money is a core progressive value.
And can we pry a correction out of the Times? These two paragraphs meld truth and, hmm, non-truth (my emphasis):
Since the mid-1980s, corporate profits have soared, reaching a post-World War II record as a share of economic output. The profits of the companies in the Standard & Poor’s 500 have doubled since the recession ended in June 2009, but wages have stagnated for a vast majority of workers in the same period. Recently, workers’ wages fell close to an all-time low as a share of the economy.
In 2012, the share of the gross domestic income that went to workers fell to 42.6 percent, the lowest on record.
Per the recent GDP report, we see that the Bureau of Economic Analysis reports both "Compensation of employees" and "Wages and salaries" (Table 10, p. 14 of 16).
Compensation is about 53% of GDP; as to its trend, I eagerly await reader assistance (or stronger coffee) to come up with a times series. "Wages and salaries" in 2012 was 42.6% of GDP, just as Messrs. Shear and Greenhouse reported.
So this phrase - "workers’ wages fell close to an all-time low as a share of the economy" may be true; their follow-up - "the share of the gross domestic income that went to workers fell to 42.6 percent" is simply not consistent with BEA reporting.
We eagerly await a Times correction. And a Knicks playoff run. And a 90 win season from the Mets. And the Easter Bunny will be hopping by any day now...