Schrader wants to delay a raise for nation’s low-paid salaried workers

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If you ever wonder how it is that a growing U.S. economy, where the income of the top 1 percent jumps up every year, has left the bottom 60 percent with less and less, Rep. Kurt Schrader (D-Ore.) can help you understand. He’s joined the lobbyists and corporations who want to stop working families from getting a raise, by introducing legislation to undermine the Labor Department’s effort to update its overtime rule.

The updated overtime rule requires that employers must pay time-and-a-half to employees when they work more than 40 hours in a week, if they earn less than $47,476 a year—whether they’re blue collar or white collar, salaried or hourly. (Under current rules, employees earning more than $23,660 can be denied both overtime pay and the minimum wage, depending on their job duties.) About 60 percent of workers were guaranteed overtime pay because of their low salaries in the 1960s and 1970s, but fewer than 10 percent are today. The updated rule will extend a guarantee of overtime pay to 12.5 million more working people, giving them either a raise or more free time to spend with their families, and it will create more than 100,000 jobs. DOL estimates that it will put $12 billion in employees’ wallets over the next decade—a little help for millions of struggling American families, at little cost to business.

{mosads}But Rep. Schrader, who owns a small business, thinks it’s too much, too fast. He wants to delay the full effect of the rule for three years and do away with automatic adjustments going forward. Why? In rural Oregon a family of four needs $60,489 to pay for housing, food, child care, transportation, health care, other necessities, and taxes. Forget about retirement or college savings. Rep. Schrader thinks that employees paid $47,476 don’t deserve overtime pay, at least not yet. He thinks they qualify as executives even though they earn less than twice the poverty income for a family of four.

Schrader says he wants a delay for universities, some of which threaten to raise tuition if the overtime rule takes effect. The truth is, universities have been raising tuition recklessly for decades while the overtime exemption threshold eroded in value and covered fewer and fewer employees. Tuitions rose 294 percent in inflation-adjusted dollars from 1975 to 2015, while the overtime salary threshold fell 58.7 percent. But university executives have taken good care of themselves all the while. University of Oregon president Michael Schill, for example, is paid $660,000 a year. The coach of the University of Oregon football team makes $3,150,000 a year, and his assistant coach makes $755,000. Couldn’t the university find some savings in its football program to pay overtime to low-paid food service managers and admissions staff, or PhD researchers who earn less than $45,000 and frequently work 55-60 hours a week?

Rep. Schrader wants those postdocs and many of their fellow employees to wait three more years before they get paid for their overtime, but in the meantime, they have rent and bills to pay, including tuition debt. I hope Schrader’s colleagues in Congress stand up for workers who need a raise now – not in three years.

Schrader’s bill has another insidious effect: it eliminates the indexation of the salary threshold to keep pace with inflation and rising salaries.  DOL’s rule will prevent a repeat of the disaster of the last 40 years, which saw the share of salaried employees guaranteed overtime coverage decline from about 50 percent to less than 10 percent, eliminating overtime protection for more than 26 million workers.  If Schrader has his way, based on CBO projections of wage growth, coverage will fall from 33 percent of the salaried workforce to just 16 percent by 2035, and 10 million fewer workers will be guaranteed overtime pay.

Ross Eisenbrey is the vice president of the Economic Policy Institute and is the author of research on overtime pay.


The views expressed by authors are their own and not the views of The Hill.

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