Chamber Insider Blog

Overtime for everyone because we care

President Obama doesn’t believe that American businesses pay out enough overtime.  So, last spring, the President ordered the federal Department of Labor to revise the salary threshold rules governing which private sector employees get overtime pay. 

A recent report in the Huffington Post suggests that the administration is eying a threshold, of around $42,000, almost double the current threshold of about $23,600 (generally employees who earn above that threshold are ineligible for overtime).  

The Huffington Post report set off a firestorm within the President’s party in Congress.  The progressive wing of the President’s Party feels the threshold must be set much higher.  Their reasoning, a higher threshold will show America that the Democratic Party cares more about the middle class than Republicans.  Let that sink in for a minute.   They don’t want a higher threshold because the economics says a higher threshold is more beneficial for the economy (a very arguable point anyway); they want a higher threshold simply to help their campaign marketing.  The audacity of this argument is truly stunning. 

First, while I freely admit that each political party tries to shape government policies to the benefit of their own core constituencies, being so nakedly obvious about it is just arrogant crony capitalism.

Second, the argument assumes that business is just a giant piggy bank stuffed with an unlimited supply of money.  But, the real world, the world where businesses must compete, make payroll, and make a profit to stay in business, doesn’t work that way.  Businesses, unlike the federal government, can’t just print money.  So, the money to meet new government mandates must come from somewhere and it’s either going to come from raising prices, cutting hours, staff or benefits or by not buying new equipment and hiring new staff.  And that hurts the business, the employees, and the overall economy.

According to the Competitive Enterprise Institute, the pace of federal agencies issuing new regulations has hit a record high under President Obama, and the pace shows no signs of slowing down with another 2,375 new rules – including the overtime rule – coming in 2015.   In 2014 alone, according to a study by the American Action Forum, American businesses needed to find an extra $181.5 billion dollars to pay for new federal regulations.  That’s $181.5 billion that couldn’t be reinvested in new research, new equipment, community building or personnel (the people the progressive democrats want you to think they care about). 

I’m not suggesting that we have no regulations.  Some regulations are warranted and business supports them.  But our government officials need to recognize that regulations have real world consequences and that overregulation is a serious threat to our economy.   And even when regulations are warranted, those regulations need to be realistic.  They need to be achievable; the benefits MUST truly outweigh the costs; and, most importantly, they shouldn’t be written to punish one group of Americans just to satisfy crass short-term political needs.