WASHINGTON (TIP): Hours after the White House announced a final rule that will change overtime protection so that it covers millions more Americans, Speaker of the House Paul Ryan (R-WI) vowed to fight it. But just months ago, Ryan was calling for the very sort of raises that the new rule will ensure.
After Ryan was elected to the Speaker position in October last year, he gave a speech outlining the challenges he hopes to address in the role. First on the list was the financial struggles American workers face.
“Here’s the problem. They’re working hard. They’re paying a lot. They are trying to do right by their families. And they are going nowhere fast,” he said. “They never get a raise. They never get a break… They are working harder than ever to get ahead. Yet they are falling further behind.”
This is the very problem that the Obama administration has said it wants to address by updating the overtime rule. Because the threshold that currently stands at $23,660 — meaning anyone earning less than that it is owed time and a half for working more than 40 hours a week — hasn’t been updated since 1975, the number of salaried workers who were guaranteed extra pay for extra work has dropped from 12 million to 3.5 million.
The new rule, when it goes into effect in December, will increase that threshold to $47,476. The administration has estimated that 4.2 million workers will become newly eligible for extra pay, leading to a $12 billion increase in wages over the next decade. The other option employers have is to cut down the ever-expanding workweek back to 40 hours and give workers more time.
That doesn’t work for Ryan, however. In a statement he released on Wednesday, he argued that the overtime rule “hurts the very people it alleges to help” because employers will eliminate salaried jobs. “We are committed to fighting this rule and the many others that would be an absolute disaster for our economy,” he said.
The administration argues the opposite. In announcing the final change, Vice President Joe Biden explained, “More than four million workers are either going to get paid more or get their time back to raise their family, go to school like so many of them are, or retrain to get a better job.”
Research even indicates that the overtime rule can prod employers to add jobs, not eliminate them, so as to add extra help that can keep current employees’ hours below 40 a week. Both the Economic Policy Institute and Goldman Sachs have estimated it could lead to the addition of 120,000 jobs.