By Henry Carmichael

More Interference in the Workplace on behalf of the Obama White House

As if Americans weren’t already suffering enough from the destructive control the Obama Administration wields over the national economy, the Obama Administration has interfered once more in a powerful political move.

President Obama shifted to another tactic, the overtime rule, after his proposed federal minimum wage increase failed to pass Congress.

Thus, on May 23^rd, the U.S. Department of Labor announced a new rule to heavily expand the amount of workers eligible for overtime pay. The rule will become effective as of December 1, 2016.  Further updates will take place automatically every three years beginning on January 1, 2020.

The rule roughly doubles the previous overtime salary threshold from $23,660 to $47,476 (It should be noted that the Census Bureau found the median household income in the U.S. to be $53,657 in 2014.).

This means four million more workers will be eligible for time and a half pay for every hour they work over 40 hours per week.

The overtime rule will most certainly hurt workers and employers as smaller businesses will not be able to afford the costs of paying for overtime. Burdened by the costs imposed by the new rule, employers will be forced to lay off skilled workers – resulting in more unemployment.     

In addition, the cost of labor will increase dramatically at the start of the overtime rule. Indeed, the added regulatory difficulties of the overtime rule alone will place unfair burdens on the hardworking employees and employers of the United States.

The rule also accounts for the 40^th percentile of the lowest wage census region, ignoring the diverse economic environments of the larger United States.

Finally, the President is seeking to implement this overtime threshold increase as a continuous trend within labor regulations. 

In response, House Speaker Paul Ryan from Wisconsin called the overtime rule an “absolute disaster” for the economy: “[b]y mandating overtime pay at a much higher salary threshold, many small businesses and nonprofits will be unable to afford skilled workers.” Ryan explained that the Americans who would be most adversely affected by this rule would be students, nonprofit employees and people trying to enter the workforce.

To further highlight the pitfalls of the rule, Speaker Ryan condemned the President for playing politics rather than preserving the well-being of American workers: “For the sake of his own political legacy, President Obama is rushing through regulations – like the overtime rule – that will cause people to lose their livelihoods.” 

In America’s business sector, David French, the spokesman for the National Retail Federation, reached the same conclusion: “Newly overtime-eligible workers may lose out on opportunities to expand their careers.”

Despite this, Obama’s only acknowledgment of business concerns was a minor salary threshold reduction; three thousand dollars down from what was originally planned to be over fifty. 

For Obama to suggest that half the country be entitled to additional pay demonstrates his abysmal grasp of economics.    

It is clear that this new rule will fail to boost the well being of workers in the United States.  Instead, the rule will threaten the nation’s economic integrity.