In an attempt to increase the wages of millions of American workers, President Obama is crafting a new Executive Order that will require businesses to pay overtime wages (time-and-a-half) after working 40 hours.
Some of the employees that will benefit from this proposal have wages that are considered below the poverty line of a four-person family. These individuals make as little as $23,660 per year and currently don’t receive overtime pay because their job title designates them as managers. Businesses are able to do this because those managers work less than 40 hours per week.
The idea behind the proposal is that providing people who need more money simply to afford everyday needs will be able to quickly put that money back into the economy. That will help fuel overall growth, so that conceivably, more people will be needed to fill additional jobs that are created.
The political logic behind Obama’s plan is that it will force Republicans to either accept the plan or look as if they’re taking money away from workers, some of whom are Republicans themselves. The previous fight against the issue was that businesses would be forced to either limit hiring or get rid of employees in order to accommodate such a proposal.
One indication of the lingering effects of the economic collapse of the previous decade is the fact that wages remain roughly $1,500 below where the average wage was in December 2007.