The ability to say you just made it possible for more than 4 million American workers to get a raise is a pretty powerful election year argument. And on Tuesday, the Biden administration did just that.
Biden’s Department of Labor approved a new rule to expand overtime protections by raising the threshold under which salaried workers are eligible for time and a half, from $35,568, to $43,888 beginning July 1. At the start of 2025, the threshold will rise to $58,656.
The change will affect 4.3 million American workers, the administration says. It also will be indexed to inflation. In a tweet, Biden said, “if you work extra hours, you deserve extra pay.”
Republicans and business groups criticized the plan, saying it would exacerbate inflation and hurt small business. The US Chamber of Commerce has said it also would affect workers who don’t want to punch a time clock and who enjoy the flexibility of being salaried, especially in a post-Covid world. The Chamber says the new rule will lead businesses to either raise salaries or reclassify some workers to hourly.
Labor advocates, meanwhile, praised the move.
The Economic Policy Institute said it would have a real impact on the people affected, but said the overall economy wouldn’t be hurt, noting the pay involved amounts to “well under” one-tenth of 1 % of total wages and salaries in the US. Meanwhile, the National Employment Law Project applauded the rule, saying the share of workers guaranteed overtime pay has plummeted since the 1970s, because the threshold hasn’t kept up with inflation. In 2019, NELP said less than 7% of the salaried workforce is covered, compared with the more than 65% in the 1970s.
Essentially, this is a continuation of a battle that began in 2014, when the Obama administration tried to double the threshold to $47,476, noting that, among other reasons, inflation had eroded overtime protections. Republican-led states and business groups said that the administration exceeded its authority, and a federal judge blocked the change. The Trump administration then adjusted the threshold to its current level, but it affected a smaller number of workers, and it wasn’t tied to inflation.
I fully expect this new proposal will be challenged in court, too.
The Iowa impact
Here in Iowa, the group Common Good Iowa praised the overtime proposal in a comment submitted to the Labor Department last year during the rule’s public input period. The group cited a 2022 study it released that attributed more than $500 million in lost wages in the state to violations of overtime law.
A group representing community colleges in Iowa estimated in a comment filed last year that they would face a financial burden of almost $6 million, with the biggest impact on small, rural institutions.
Meanwhile, a non-profit that works with people with disabilities noted the stagnant Medicaid rates in Iowa and said that new expenses without “commensurate funding” endangers the state’s system of community-based services.
The Quad-Cities Chamber of Commerce, also in a comment last year, said that the new rule’s impact would cause “increased instability and economic volatility” in the area’s economy, which it says would hurt workers. The chamber said the rule should not move forward.
Other commenters from Iowa praised the rule. But others, while also supporting it, urged the Department of Labor to rescind the provision that excludes teachers from these overtime protections. The exclusion was kept in place.
The overtime rule was finalized the same day the Federal Trade Commission voted to ban for-profit businesses from having their employees sign non-compete clauses. The FTC says that such clauses keep worker’s pay low and stunts new startups from forming.
Biden praised that move, too, saying, “workers ought to have the right to choose who they want to work for.”
The New York Times says about 30 million workers in the US are bound by non-compete clauses. The US Chamber of Commerce called the move an “unlawful power grab.” It and other organizations have already filed suit challenging the FTC’s ban.
These moves will form part of the backdrop for Biden’s argument that he’s better on issues affecting American workers than Donald Trump. As of yet, I have not seen any comment from Trump himself on the new overtime rule or the FTC’s non-compete decision.
Secret government
If you think the Davenport City Council is the only local government that has been doing public business behind closed doors, think again.
Lately, Davenport has been getting hammered for its secret $1.6 million agreement with former City Administrator Corri Spiegel, who said she’d been harassed by elected officials. The deal was signed a month before the election but kept under wraps until afterward.
However, as Randy Evans, executive director of the Iowa Freedom of Information Council writes in the Iowa Capital Dispatch, the Des Moines City Council has been ducking behind closed doors lately, too.
Evans writes:
City officials moved discussion of possible changes in Des Moines’ “standard development agreement” away from a meeting of the City Council that any interested citizen could attend. The discussion was held, instead, during two private meetings of council members the public did not know about.
You can see the Des Moines Register for more details.
This comes as the Iowa Legislature passed a new measure to increase fines on government officials who violate the state’s open meetings statute. The new bill, which is awaiting Gov. Kim Reynolds’ signature, was prompted in part by what’s been happening in Davenport. But it’s clear secrecy also is being practiced by local governments in other parts of the state, too.
As a reporter and editor for more than 30 years, it’s been my experience that, for the most part, local governments follow the letter of open meetings law. But there have been many instances when they haven’t. Usually, it’s on an issue that’s controversial, or when they just think they can get away with it. I remember once objecting to a local government closing a meeting, and essentially being told, “what are you doing to do about it?”
On another occasion, a local government scheduled a Saturday afternoon meeting, with notice posted late on a Friday afternoon in City Hall. I only heard about it when an alderman happened to be driving by my house while I was working in the yard the day of the meeting, and he told me.
In truth, short of a lawsuit, there is little that people can do to force public officials to live by the letter—and the spirit—of the law. Unfortunately, with the traditional news media shrinking, there is less willingness, and financial ability, to go to court.
This endangers open government.
Fortunately, in Davenport, the Spiegel settlement is now before the courts, thanks in large part to citizen efforts. This appears to be our best hope for achieving accountability, not to mention the truth, in this matter. I also have hopes that the threat of new fines will help. But I am skeptical. Rarely are open meetings violations prosecuted.
Frankly, I think it’s mostly up to local leaders to truly believe, as Evans writes, “that carrying out the government’s business in public view is in the public interest, even if it causes inconvenience and embarrassment at times.”
This requires more than a change in the law. It means a change of heart for some politicians.
Evans, by the way, is a new member of the Iowa Writers’ Collaborative. He writes “Stray Thoughts.” I urge you to subscribe to his Substack.
Along the Mississippi is a proud member of the Iowa Writers Collaborative. Please check out the work of my colleagues and consider subscribing. Also, the collaborative partners with the Iowa Capital Dispatch, which provides hard-hitting news along with selected commentary by members of the Iowa Writers Collaborative. Please consider making a donation to support its work, too.
Hi Ed,
I'm not convinced that extending this is economic based for the affected employees making $58k or less. It would seem this is quite similar to forgiveness of student loans. It's mandating costs for all at the benefit for few. My opinion is this is an overreach and should not happen. Investments in human capital and talent are rewarded in the long-term. Creating a nanny-state where people settle for the beneficence of the government is a dangerous path; it's called socialism and has never worked in the history of mankind.