By Julianne Malveaux
During his State of the Union address, President Obama promised to use the power of his pen to achieve the policy objectives that Congress continues to block. After advocating fairness and being rebuffed by Congress, the president chose to use the power of his pen to require federal contractors to pay workers at least $10.10 per hour, or $21.800 per year. That puts a single parent with two children below the poverty line.
Now the president is using the power of his pen to ensure that workers receive overtime pay. Currently, the only workers required to receive overtime pay are those who earn $445 a week, about $11 an hour or $23,000 per year. The president has proposed that that amount be raised to somewhere between $550 and $970 a year. Splitting the difference means that those who earn about $760 a week or $39,500 a year would be entitled to overtime.
Already the business lobby has said that both a higher minimum wage and mandatory overtime cuts into their profits. Already they have talked about cutting the number of workers they will employ, and the number of hours they will employ people. These greedy corporate giants fail to note that while wages and salaries for the top one percent soared by nearly a third in the past three tears, the wages of those in the remaining 99 percent rose by a fraction of one percent in three years. A worker earning $30,000 a year saw her wages rise to $30,300; someone earning $300,000 a year saw his wages rise to $396,000.
Clearly, those who earn $30,300, if not poor, are a stone’s throw away from poverty. These are the folks who struggle from paycheck to paycheck, who make decisions about whether to buy their children new shoes or pay the cable bill. These folks aren’t trying to purchase luxuries, and they aren’t looking for handouts. They just want to live decently, with enough food on the table, with bills paid, and with a little breathing room. These are folks who don’t take vacations. Luxury for them may mean a couple of days off to visit neighborhood parks. Summertime, when the living is easy for children, may be a burden to those parents who can’t afford childcare.
With his effort to reduce income inequality and improve the lives of those at least the President is moving in the right direction. Unfortunately he can’t get enough members of congress to follow, because they are committed to obstructionism. Aren’t there poor people in these republican districts? Are they willing to sacrifice the well being of their constituents to hold fast to party principles? Researchers should look at the levels of poverty in each Congressional district and shame these miscreants into doing the right thing.
Republicans forget, and some Democrats fail to argue, that increasing the economic well being of those at the bottom improves the nation’s economic status. Those at the bottom will use added wages to pay bills, to buy some of the things they’ve put off purchasing, to pump money into the economy. In contrast, those at the top are likely to save their money or invest it, failing to spend enough to trickle down their spending to benefit those at the bottom.
It is said that a rising tide lifts all boats. But some folks are riding a luxury yacht, while others are struggling to survive on a raft. The rising tides argument only works for those at those at the top who have seen their wages grow dramatically. Those at the bottom are barely floating on a tottering raft that has dozens of holes, as evidenced by their small pay increases, low wages, and lack of overtime.
To the extent that President Obama has the power of the pen he can both improve the lives of those at the bottom, but also remind us of the meaning go fair labor standards. This is a conversation our nation has not had in awhile. We have been content to let the wages of those at the bottom continue to drift downward, while using tax policy and fiction (rising tide) to enrich those at the top. What does it take to sensitize those at the top to the plight of those at the bottom? The Occupy movement looks better by the day.
Julianne Malveaux is a Washington, D.C.-based economist and writer. She is President Emerita of Bennett College for Women in Greensboro, N.C.