Overtime cut undermines workers

JOHN SWEENEY
SPI GUEST COLUMNIST

Yesterday, the biggest pay cut in American history took effect: The Bush administration’s overtime pay cut became official. It’s a new federal rule that could strip up to 6 million workers of overtime pay protection, forcing them to work longer hours without fair compensation.

Nurses, police lieutenants, chefs, team leaders, working supervisors, assistant managers and financial services workers are just some of the millions of workers who used to earn overtime pay when they worked more than 40 hours a week — and who will now lose that eligibility.

Not only will these employees no longer get overtime pay — they’ll be working extra hours for free, earning only their base salary. That means a huge pay cut. Currently, time-and-a-half premium pay for overtime work accounts for 25 percent of the income of those who work overtime. That averages out to about $161 every week.

And what incentive will employers have to keep workers’ hours reasonable if they don’t have to pay extra for extra work? Workers without overtime pay rights are twice as likely to work more than 40 hours per week, three times as likely to work more than 50 hours and three times as likely to work more than 60 hours. The fact is that workers will have less time with our families, thanks to President Bush’s new overtime rule.

These overtime rules are also bad news for our economy — at a time when we can least afford it. Our nation is already in a deep jobs hole; we have 1.6 million fewer jobs than when Bush took office.

Last month, experts were disappointed when the economy created only 32,000 jobs as opposed to the 200,000 expected. Under the new rule, employers will tend to work their current workers longer hours rather than creating new jobs, making the underlying problems in our economy even worse. At a time when workers’ paychecks are down, joblessness is up and Americans are working more hours than workers in any other industrialized nation, Bush has made the wrong decision in implementing his new rule.

Even three former Department of Labor officials — three of the highest-ranking DOL officials under Presidents Reagan, Bush and Clinton — agree that these new overtime rules hurt workers. They have issued an analysis that concludes that with one exception, every one of the administration’s changes to the overtime rules will weaken the eligibility requirement and increase the number of workers who will lose their overtime rights.

This new rule was sold as “modernization.” But the truth is these are changes in the law that giant corporations have fought for years to win.

A number of low-income workers will gain overtime pay rights under the new rule, and we applaud this long-overdue change. But this gain does not justify the Bush administration’s decision to take overtime pay rights away from millions of other workers, a move bipartisan majorities of Congress tried to block.

Last May, the Senate voted not once but twice to guarantee that no worker will lose his or her overtime rights. The two amendments passed by the Senate, we believe, would repeal large portions of the Bush regulation that restrict overtime eligibility. This marks the fourth time in the past year that Congress has voted to prohibit overtime pay cuts.

But the overtime guarantee passed by the Senate is unlikely to become law unless approved by the House. This explains why the House Republican leadership has blocked any debate or votes on protecting workers’ overtime rights — because they know that an overtime guarantee would likely pass in the House and would repeal major portions of the Bush overtime regulation. U.S. workers deserve an up-or-down vote in the House on this issue when Congress returns in September.

An overtime guarantee would give workers the peace of mind of knowing they will not be losing their right to overtime pay, and it would calm the intense political passions that have been stirred by the Bush plan. Anything less is simply a massive pay cut for America’s workers.

John Sweeney is president of the AFL-CIO, which represents 13 union members.

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