Rep. Mark Takano: What Jeb Bush Doesn’t Get
Last week, former Florida Governor and current Republican presidential candidate Jeb Bush said that in order to grow the economy, people “need to work more hours.” While I know times weren’t exactly tough for Jeb Bush growing up in one of the richest families in our nation, the regular Americans struggling just to get by and working 40, 50, or even 60 hours a week know they just don’t have any more hours to give.
Jeb Bush doesn’t get it. Productivity is at an all-time high, while wages have remained relatively flat. In order to grow the economy, we need a system that helps workers and lets them climb the economic ladder, not a system that squeezes workers for every ounce of productivity they have.
Luckily, the pendulum is starting to swing in the other direction. As the issue of income inequality has become mainstream, many states and cities have begun to implement progressive ideas, such as raising the minimum wage. And just last week, President Obama announced that his administration would be updating the rules for what is believed to be one of the most effective ways to help working Americans — overtime pay.
Like many of our great programs, overtime pay is a product of the New Deal, part of the Fair Labor Standards Act, which established a minimum wage, protections for child labor, and overtime pay. While most hourly workers are eligible for overtime, the law set requirements for salaried workers who may qualify. The idea was that salaried workers with significant clout didn’t need overtime protections, but that those with lesser bargaining power and little ability to control their schedules did.
Salaried workers’ eligibility for overtime depends on their incomes and the nature of their duties. Those earning below a certain income threshold are guaranteed overtime pay, while those earning above the threshold and spending a significant amount of time completing executive, administrative, or professional duties, known as the “white-collar exemption”, are exempt from overtime protections. In 1975, 62 percent of salaried workers fell below the threshold and were eligible for overtime pay.
As time has passed, federal regulations have not kept pace with inflation or our changing economy. The current salary threshold is $23,660, and applies to only 8 percent of the nation’s salaried workers. This threshold is below the federal poverty level for a family of four. This means that workers earning just above the threshold can work 60-70 hours a week without any additional compensation. These workers are lower level managers, associates, and clerks at businesses across the country. They may spend a small fraction of their time working on executive, administrative, or professional tasks, and the majority of it stocking shelves, ringing up customers, or doing maintenance. They have little choice but to accept the extra hours their supervisors give them.
When word got out that the Obama administration and the Department of Labor were considering updating the income threshold, I wrote a letter to the president and asked him and the Department of Labor to ‘take bold action.’
I’m pleased to see that they have done just that, as the Department of Labor intends to raise the salary threshold for overtime pay from $23,660 to $50,440. When the final rule is implemented in the next several months, overtime pay will be expanded to an additional 5 million working Americans, and put $1.2 billion in workers’ pockets.
Far too many are working harder without seeing the rewards. This new rule will begin to even the scale, which has been tipping in the wrong direction for decades.
It’s about time, because no matter what Jeb Bush thinks, Americans don’t need more hours, they need an economic system that works for them.
Mark Takano is the U.S. Representative for California’s 41st District.