Gutting Health Care Not Enough? Trump Moves to Undercut Overtime for Millions

 

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If the millions of voters—most prominently, workers in the Rust Belt—who switched their loyalties from Barack Obama in 2012 to Donald Trump in 2016 were crying out for anything, it probably wasn’t for the Department of Labor’s Wage and Hour Division to submit a Request for Information about the Obama-era rule that was supposed to expand overtime pay to millions of workers last year.

But that’s precisely what happened Tuesday as Trump’s Labor Department gave its clearest signal yet that it intends either to considerably weaken or simply eliminate the Obama overtime update that would greatly increase the number of salaried workers who would qualify for overtime.

The move is a swift kick in the teeth to those forgotten men and women who voted for Trump—as well as the millions of workers who didn’t.

The last time the overtime salary threshold was substantially heightened was in 1975, when President Gerald Ford set it at $23,660—about $58,000 in today’s dollars. That change meant that more than half the salaried workforce at the time had access to overtime pay. 

Since then, the threshold’s power has withered away in the face of rising costs of living and legal evasion. Now, less than 10 percent of the salaried workforce has automatic overtime protections. Those who earn more than the threshold can only earn overtime pay if they are not classified as administrators, executives, or professionals. This incentivizes employers to misclassify their workers as managers, especially after President George W. Bush implemented an overtime update that declared employees could be exempted from eligibility for spending as little as 20 percent of their time on managerial tasks.

“Clearly, the salary threshold no longer does a satisfactory job of covering those vulnerable to unscrupulous employers,” Ross Eisenbrey, the former vice president of the Economic Policy Institute and the original proponent of increasing the threshold, told the Prospect when the rule was being finalized back in 2015. “These protections were meant to ensure the right to a limited workweek, especially for workers who lack control over their time and tasks, and who do not receive high pay.”

Obama’s overtime update, formally introduced in the summer of 2016 amid the face of heated opposition from corporations, doubled the salary threshold to $47,476 for all salaried workers—regardless of title or duties—and tethered future threshold increases to increases in the cost of living. The rule would expand overtime coverage to more than four million workers while making it easier for more than seven million workers who are already qualified to prove their eligibility, according to estimates by the Economic Policy Institute. It was a crowning achievement of Obama’s second term, which centered on using the executive branch to advance pro-worker policies.

However, the new rule quickly ran into legal trouble when a federal judge in Texas blocked it in November, ten days before it was set to go into effect. The judge ruled that the administration didn’t have the authority to alter the threshold—a highly questionable decision given that past administrations have done so.

The Trump administration’s Justice Department declined to appeal the decision, a clear sign to proponents that the rule was in jeopardy. Now, the administration is moving ahead with a process to either weaken or eliminate the rule, despite the fact that it benefits a substantial chunk of the president’s base.

As analysis by EPI shows that robustly updating the overtime rule not only disproportionately benefits women, black, and millennial workers, but would also be a huge boon for Trump voters. That includes the 3.2 million workers with no more than a high school degree, the white segment of which voted for Trump by huge margins. Roughly 40 percent of workers in transportation and material moving, farming, and construction and extraction (i.e. mining) occupations would directly benefit.

The states where salaried workers stand to gain the most strongly backed Trump in 2016; they include Tennessee, South Carolina, Georgia, Arkansas, and Idaho, as well as West Virginia, where more than 30 percent of salaried workers would directly benefit.

Workers in the bigger states that gave him his Electoral College edge would also benefit from the Obama rule, including one million in Florida, 500,000 in Pennsylvania, 350,000 in Ohio, and 275,000 in Michigan.

The Labor Department’s decision to issue a Request for Information opens the rule back up to a lengthy public comment process that the Obama administration already went through (and which included intensive conversations with business groups). It specifically asks for input on whether the threshold should be set at different levels based on industry, region, duties, and whether the threshold should just be done away with.

If a new rule creates different floors for salaried workers based on a whole range of factors, it could very well render the power of salary threshold useless. “The whole point of having national standards is to ensure decent basic standards for all workers,” Heidi Shierholz, EPI’s director of policy, wrote. “The updated overtime standard is already linked to the lowest-wage Census region. Workers’ should not be undercut even further by weakening the salary threshold.” You didn’t see many Trump supporters holding “Repeal Obama’s Overtime Rule” signs at his campaign rallies, but there is a long line of powerful corporate lobbyists—including swamp-dwellers like the Chamber of Commerce, the Society of Human Resource Management, and the National Retail Federation—knocking on the White House door, eager to weaken workers’ right to overtime.  

It’s those lobbyists whom Trump has been listening to since he first set foot in the Oval Office. And it’s those lobbyists who are dictating Trump’s deregulatory crusade, which now appears to officially include rolling back overtime for workers, many of whom expected something very different. 

Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.

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