Quote of the Day:
With the flick of his magic pen, President Obama will soon grant millions of workers overtime play. At least, that's the fantasy being peddled by the White House and regurgitated by a credulous press.
–the editors of Investors Business Daily
President Obama is working overtime to demonstrate what IBD calls his "economic illiteracy."
The president's new cause is extending overtime eligibility. Like many Obama proposals, it is sold as a way to help working Americans. Like the vast majority of Obama programs, it will do just the opposite.
Here is how overtime rules currently work: salaried workers who earn less than $455 a week are required to pay overtime when the employee goes beyond regular hours. Obama is going to change this so that people making $50,000 must be paid overtime.
Almost always hostile to business, the president says that that many companies are "skirting basic overtime laws, calling somebody a manager when they're stocking groceries and getting paid $30,000 a year." Other people, he did not mention, would dearly love to have a job doing anything in the Obama economy.
Will the president's new rules actually help the millions he claims they will? IBD says not:
But that assumes businesses employing these newly overtime-eligible salaried workers won't change anything, and will just start paying them time-and-a-half.
In a free market economy, these workers are already making the market wage. If they were being underpaid, given their skill levels and the work they're doing, they'd get another job.
So what are employers going to do? Since money doesn't grow on trees, some affected companies will tell these workers to put in less overtime, or ban it altogether. Or they'll bring in more part-time workers to avoid the wage hit. Or lay off some people.
The point is, far fewer than 5 million workers will benefit from this change, and many will lose out.
Of course, some companies might raise prices to pay for more overtime, thereby forcing consumers to bear the cost of Obama's "generosity."
Someone needs to tell Obama that economic prosperity doesn't result from new, more burdensome federal mandates and regulations. If Obama really wants to help middle-class families make more money, he should concentrate on freeing the economy from regulatory shackles, not adding new ones.
Add overtime to hiking the minimum wage, two of President Obama's pet causes, which may help him appear humane but will harm workers by reducing opportunity.