Obama Discusses His Overtime Rule In Weekly Address, Shows He Doesn’t Understand Economy

We’ve already seen the news that Team Obama plans on changing OT rules for salaried private sector employees, utterly failing to understand that things do not stay the same in response to government regulations. Today, O speaks on this

(White House) Things like the 40-hour workweek and overtime are two of the most basic pillars of a middle class life. But for all the changes we’ve seen in our economy, our overtime rules have only been updated once since the 1970s. Just once. In fact, forty years ago, more than 60 percent of workers were eligible for overtime based on their salaries. But today, that number is down to seven percent. Only seven percent of full-time salaried workers are eligible for overtime based on their income. (he mixed in two different metrics)

That’s why this week, my Administration took a step to help more workers get the overtime pay they’ve earned. The Department of Labor finalized a rule to extend overtime protections to 4.2 million more Americans. It’s a move that will boost wages for working Americans by $12 billion over the next 10 years. We’re more than doubling the overtime salary threshold. And what that means is, most salaried workers who earn less than about $47,500 a year will qualify for overtime. Or, their employers can choose to give them a raise so that they earn more than $47,500. Or, if employers don’t want to raise wages, they can let them go home after 40 hours and see their families or train for new jobs. Any way you slice it, it’s a win for working families. And we’re making sure that every three years, there will be an automatic update to this threshold – so that working families won’t fall through the cracks for decades at a time ever again.

This is the single biggest step I can take through executive action to raise wages for the American people. It means that millions of hardworking Americans like Elizabeth will either get paid for working more than 40 hours, or they’ll get more time with their families. Either way, they win. The middle class wins. And America wins.

Except, things won’t work out the way this guy, who has never had to actually run a business, thinks, as Andy Puzder, CEO of CKE Restaurants and a member of the Job Creators Network, tells us

(Forbes) The real world is far different than the Labor Department’s Excel spreadsheet. This new rule will simply add to the extensive regulatory maze the Obama Administration has imposed on employers, forcing many to offset increased labor expense by cutting costs elsewhere. In practice, this means reduced opportunities, bonuses, benefits, perks and promotions.

Perhaps the biggest consequence of the rule is that it will cause some employers to reclassify salaried employees as hourly, and set schedules so they can more easily track hours worked and avoid excessive claims for overtime. For example, taking a manager’s current salary and allocating it across 45 hours (with 5 hours of overtime pay) will result in no increased labor expense or increased salaries. However, it would mandate five hours of overtime, rather than allowing managers to take advantage of the flexible schedules they currently enjoy.

Flexible schedules, you say?

For example, he testified that there were times when “local events – such as conventions – provided significant business opportunities with significantly higher customer demands.” Williams was able to allocate more time to his restaurant and “take advantage of that opportunity” because he managed his own schedule unconcerned about getting approval for working the overtime hours the business required. On the personal side, there were also “times when business was slow” and he “was able to spend additional time with [his] family, raise [his] three daughters, attend school functions, work with [his] church, and take vacations.”

That kind of flexibility will go away. These people will be on the clock. The salaries will be reduced to cover the OT potential, and perks will disappear. As Puzder ends “you cannot regulate your way to economic prosperity.” This will hurt Middle Class folks.

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7 Responses to “Obama Discusses His Overtime Rule In Weekly Address, Shows He Doesn’t Understand Economy”

  1. Jeffery says:

    forty years ago, more than 60 percent of workers were eligible for overtime based on their salaries. But today, that number is down to seven percent.

    And the middle class was much better off forty years ago. Shifting lower paid employees to salaries has been a good way for companies to overwork and underpay the people who do all the work. Shouldn’t companies pay employees for the work they do?

    Shouldn’t the right be on the side of the working man, not the bosses?

    The policies enacted by Dems and Republicans alike over the past 40 years have eviscerated our middle class. “Trade” deals sent jobs overseas. Tax policies shifted the tax burden from the wealthy to the working classes. Gov’t policies have decimated union membership. Patent and “trade” policies have potentiated healthcare costs. Monetary policy suppresses employment to suppress inflation. Fiscal policy keeps unemployment high. Taken together, these conservative policies have harmed the nation.

    Your best evidence against the new policy is a lobbyist whose clients are affected by the policy?

  2. John says:

    Teach didn’t you also take the position that higher minimum wages cut jobs?
    NC is in the bottom third for unemployment rates
    You also said tfat when taxes are cut prosperity increases
    Ask Kansas how that is working out
    We cut taxes and those “job creators” didn’t create jobs they just banked (offshore) their higher profits without investing more in infrastructure or their human resources
    If we raise taxes business will have 2 choices what to do with their profits send them to DC or reinvest in their own company

  3. drowningpuppies says:

    Foolish goals are pursued by fools

    Something no one in the administration will say to Barry

  4. gitarcarver says:

    Teach didn’t you also take the position that higher minimum wages cut jobs?

    There is no evidence that higher minimum wages increase employment and there is some evidence that it cuts jobs.

    NC is in the bottom third for unemployment rates

    And California is right there with them and dropping.

    We cut taxes and those “job creators” didn’t create jobs they just banked (offshore) their higher profits without investing more in infrastructure or their human resources

    We didn’t cut taxes under Obama you moron. What we did do was raise the cost of regulations that don’t do anything. This EO is a prime example of that.

    If we raise taxes business will have 2 choices what to do with their profits send them to DC or reinvest in their own company

    So you think it is the job of the government to tell individual business owners what to do with the money they make?

    Wow. You have said some stupid things before but this is takes the cake.

    Here’s a clue for john……. businesses don’t exist to serve the government.

  5. Jeffery says:

    Business in the US exists in a framework made possible by government.

    Monsanto didn’t educate its workforce. Pfizer doesn’t build roads. GE doesn’t enforce its contracts. Walmart doesn’t have a police force or fire department. Costco doesn’t keep American’s safe from invasion.

    Why do so few multinational corporations arise from poor nations with weak governments and rickety infrastructure? Would Bill Gates have started Microsoft in Afghanistan?

    We get it. The objective of business is to maximize profit within constraints imposed by civilized society. And businesspeople are smart, clever, hardworking and aggressive. But note that one of the best ways to maximize profit is to eliminate the competition – which is what most companies want – a monopoly. But in civilized society the desire to profit is balanced by the good of the whole. Conservatives, and pseudoconservative authoritarians like the Turd with a Toupee, think that all regulations are harmful (except those that protect their own interests), but for example, isn’t limiting monopolies GOOD for markets and society?

    A corporation that profits $12 billion a year for its shareholders but doesn’t pay its workers a living wage isn’t really benefitting society much, is it? If the workers must rely on government assistance for food and healthcare, the corporation isn’t benefitting society much, is it? Libertarians argue that that’s beside the point; that there’s a “higher priniciple” of liberty at stake – that a corporation or person should be able to do whatever they wish, however they wish – the rest of society be damned. But there is absolutely no reason to believe the libertarian stance – it’s just that – a stance, a belief, a religious tenet – no more relevant than praying to the East.

    So no, US businesses do not exist to serve government, but they cannot exist without government.

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