One of the great scams in the American workforce has long been the title “assistant manager.” Jesus says in Luke’s gospel that “the laborer is worthy of his hire,” but he doesn’t mention assistant managers getting overtime.
A hard-charging line-worker will get a “promotion” to assistant manager or foreman, a yearly salary instead of an hourly wage and a key to the building, plus benefits if she’s lucky. Then she finds herself working 50 or 60 hours a week, mostly doing the same things she did as an hourly worker, only now she’s a salaried worker so she doesn’t get paid overtime. Then there’s the added pressure of making the numbers work and supervising people who used to be her friends.
The fruits of all that extra unpaid work flow to the owners of the company, shared by — in the case of the fast-food industry, for example — stockholders and high-ranking executives. There are between 5 million and 15 million assistant managers and others in low-paid “management” jobs that ought to be a ticket to the middle class. Instead they’re still flipping burgers and stocking shelves into their 40s.
Now, under prodding by President Barack Obama, the Labor Department is rewriting the 1975 rules governing when someone can be considered a manager and thus exempt from overtime. The proposal — which doesn’t need approval from Congress — would raise the threshold from $455 a week to $970 a week by next year.
Salaried employees earning less than $50,440 a year would be guaranteed time-and-a-half starting at the 41st hour they work each week. Right now they can earn as little as $23,660 a year — poverty level for a family of four — and still not qualify for overtime.
“We’ve got to keep making sure hard work is rewarded,” Mr. Obama wrote in an op-ed published by The Huffington Post. “That’s how America should do business. In this country, a hard day’s work deserves a fair day’s pay.”
(Ironically, the Huffington Post doesn’t pay its “signature lineup of contributors,” nor does it pay for the content it “aggregates” from other sources, but that’s a business model for another day.)
A study by the progressive Economic Policy Institute estimates that currently, only about 8 percent of salaried workers qualify for overtime. When the law was written in 1975, it covered about half of salaried workers.
Under the new Labor Department rules, about 40 percent of them would qualify. The rules were last updated in 2004 under President George W. Bush, but that update actually hurt more workers than it helped.
Mr. Obama noted that the management exemption from overtime was intended to cover only well-paid bosses in white-collar industries. But as inflation eroded earnings and middle-class wage stagnation set in, many “managers” found themselves supervising workers who were making more than them on an hourly basis.
The new rule will attempt to account for future inflation by pegging the overtime standard to those earning at the 40th percentile of the income distribution.
Republicans already are griping that the new rules will choke off economic growth. In fact, America is likely to adjust to a new version of the old normal: A job is supposed to be a fair way to distribute capital in a capitalist economy.
Since 1979, the economy has grown, in real terms, by 149 percent. Productivity (output per worker) has increased by 64 percent. But the vast majority of American workers haven’t shared in the bounty. In real dollars, their incomes have been flat or even declined.
The rewards of productivity should be shared just a little more fairly, so that the richest 1 percent aren’t taking home 95 percent of all the income growth, as they did between 2007 and 2012.
In fact, the EPI reports, Missouri was among 10 states where 100 percent of all income growth in those six years accrued to the top 1 percent. There’s no reason to think it’s gotten any better since then.
Grumble as they will about Mr. Obama’s “tyrannical” use of executive powers, the GOP is likely to find opposition to the new overtime rules a loser in next year’s election. Americans are slowly catching on to how they’ve been exploited. The only question is how many of them can be motivated to go to the polls and do something about it.
St. Louis Post-Dispatch