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Overtime!

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Speaking of progressive regulatory measures that would have a material impact on millions of workers, President Obama just announced that he’ll be lifting the cap on overtime regulations for salaried workers to $50,000 a year from its previously negligible level of $23,600 a year.

According to the EPI, this means 15 million workers just got a big raise. Congratulations!

Most of us are familiar with overtime from the Fair Labor Standards Act’s regulations for hourly workers – that once you go over 40 hours a week, you get paid time-and-a-half. However, salaried workers are also eligible for overtime, with a statutory ceiling on who this applies to in order to ensure that benefits are going to workers rather than to management.

The problem is that this statutory ceiling wasn’t indexed to inflation. As the EPI notes, back in the 1970s, some 62% of salaried workers were eligible for overtime, but forty years of inflation gradually pulled more and more workers over that line while making the $23,600 limit no longer a marker of affluence but a sub-poverty income for a family of four. As a result, previous to this ruling, only 8% of salaried workers in America actually qualified for overtime.

As someone who’s in the early stages of research on the history of the minimum wage, this regulatory history is illustrative of two important factors in public policy. First, the power of inertia – just as the only thing that conservatives had to do to kneecap the minimum wage was to sit on it for a decade until inflation destroyed its real value, the only thing that turned overtime regulations into a dead letter was 29 years of inaction. (This raises a secondary question as to why Carter and Clinton completely failed to address this issue, and why Obama waited until now to issue this regulation, instead of doing in January 2009)

Both progressives and policy scholars tend to focus first and foremost on enactment of legislation, only secondarily on enforcement, and almost never look at the power of inaction. Our counterparts on the right have made a much better study on how to turn the status quo to their advantage, such that they only have to batten on to one of the many veto points in the American state to not merely prevent progressives from achieving victory but also to achieve their policy aims. Given that periods of progressive reform are rather rare in American history, we would be wise to start thinking about ways of designing public policy that would harness inaction to progressive ends rather than requiring us to leap giant legislative hurdles to keep what we have, let alone make advances.

Second, it speaks to the necessity for progressives of being thorough and comprehensive in our struggle to deal with income inequality. Between 1938 and 1975, overtime regulations were a major factor in the growth of the American middle class of both blue- and white-collar varieties, part of that New Deal system of social protection that looks far more robust in retrospect that it did at the time. However, fixing overtime regulations hasn’t exactly been high on the list of progressive priorities. It’s just not as sexy as the Fight for 15 – it’s focused primarily at helping “missing class” and middle class salaried workers, rather than the most oppressed. It’s also an area where attention to legislative draftsmanship trumps direct action.

None of that makes it less critical for progressives. I’ve long believed that progressives need to fight inequality all the way up and all the way down, rather than only focusing on the top of the 1% and the bottom of the 99%. As we’re trying to lift people out of poverty, we also need to be looking at making sure that people can progress out of near-poverty, both because we want people to have a better standard of living than just above our rather stingy poverty line, and because we want to make sure that people don’t fall back down into poverty.

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