Fox host Neil Cavuto opened a Your World discussion by “asking” about President Obama’s plan to expand the number of workers eligible for overtime, “Overtime or just over the top?”
From a Politico article called, “Barack Obama poised to hike wages for millions”:
By law, any salaried worker who earns below a threshold set by the Labor Department must receive overtime. The current threshold of $23,660 lies below the poverty line for a family four. The proposed rule is expected to raise that to somewhere between $45,000 and $52,000—closer to the median household income—greatly expanding the pool of Americans who qualify for overtime pay.
The overtime threshold is not indexed to inflation and has been updated only once since 1975. It covers 12 percent of salaried workers. Boosting the threshold to $50,440 would bring it back in line with the 1975 threshold, after inflation. By one estimate that would give somewhere between five to ten million workers a raise.
Some workers above the salary threshold also qualify for overtime pay under current law. But the historic shift from a manufacturing-based economy to a service economy has reduced their number because white collar workers—defined quite expansively—are exempt. The forthcoming overtime rule is expected to tighten up that definition.
But Cavuto and guest, Swiss America’s Craig R. Smith, acted as though the new rule is just a giveaway. Cavuto introduced Smith by saying he calls the president’s plan “a guaranteed jobs killer.”
Smith claimed, “This is going to create more part-time work, Neil and that’s going to mean the economy is going to be less robust because they have less money to spend.” He said sarcastically, “I loved the headline, Neil, that Politico used. ‘Barack Obama poised to raise wages for millions.’ Nothing could be further from the truth, Neil. It’s going to cause wages to drop.”
Smith also claimed the change will “create all kinds of legal challenges. You’re going to see it tied up in the courts.”
“This is going to slow the economic recovery,” Smith continued. “The guy that’s got a 35 hour-a-week worker now is just going to add on another guy for $10 or $15 an hour.”
”That’s what I suspect might happen,” Cavuto agreed.
Smith finished with a page from the traditional conservative economic playbook: “If he truly wants to help shrink the size of government, put more money back in the hands of the people, allow your regulations to be put to the side for a couple of years, and you’ll see this economy expand again at two, three, four percent.”
Of course, Smith’s view was presented as truth and the scenario that Politico painted of 5-10 million workers getting a raise was not mentioned. Nor was the possibility that the change could lead to more jobs, as Politico noted, because if employers cut hours, “Someone else must hired to perform that work.” And current “managers” would have more time with their family for the same pay.
Watch the one-sided discussion below, from the June 8 Your World.