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OPINION

Raise overtime pay threshold: Our view

The Editorial Board
USA TODAY
A protest in Boston last week.

Every year, Social Security checks and federal pensions are adjusted for inflation. Every few years, the minimum wage goes up for similar reasons. But one thing that rarely gets adjusted is the salary below which employers must pay overtime.

The salary level has been hiked only once in the last 39 years, a decade ago. And that move recovered only a fraction of what had been lost to inflation since the last time it was raised.

As a result, in 1975, a worker making $51,168 or less in today's dollars was guaranteed overtime. Today, someone could make barely half that annually and not get paid for work beyond 40 hours. He or she need only be classified as professional or managerial and be given a straight salary.

For this reason, President Obama has signaled his intent to raise the threshold, and to make other changes in labor rules to prevent lower-income workers from being denied overtime. The move has two purposes: to help close a persistent gap in income equality, and to play to the Democratic base as this year's midterm elections approach.

Though there is an unmistakable political element to Obama's plan, it makes good sense. Unlike his bid to raise the minimum wage well beyond inflation to $10.10 an hour (which we've criticized as too much, too fast), the proposal on overtime is less a bid to mandate higher wages than to apply basic rules of fairness.

The current overtime threshold — $23,660 a year — is below the poverty line for a family of four. All told, 6 million-10 million workers not receiving overtime pay would get it if Obama raised the threshold to the 1975 level. Which is a huge number of people allowed to slip out of one of this nation's most important social compacts: the 40-hour week.

Few people expect the Obama administration to take the threshold all the way back to the 1975 level, at least not at once. But the Labor Department could, and should, raise it significantly. And, to curb abuse, it should put in rules stating that people classified as professional or managerial need to spend at least 51% of their time on professional or managerial duties.

Business groups say paying higher wages would have a negative impact on the economy. Perhaps. But it could also encourage employers to hire more workers, instead of loading unpaid overtime on current employees. And it would give workers more money to spend on the products the companies sell.

Henry Ford illustrated this principle in the early 20th century. By raising his own workers' salaries, and advocating the same for other employers, Ford created a new generation of consumers who could afford to buy cars and other products once reserved for the well-off.

The period from 1938 to 1975 was a generally good one for the U.S. economy. All segments of society benefited from rising wages and economic growth. It's time to do right by rank-and-file employees who work more than 9-to-5.

USA TODAY's editorial opinions are decided by its Editorial Board, separate from the news staff. Most editorials are coupled with an opposing view — a unique USA TODAY feature.

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