Tags: obama | expansion | overtime | pay

Boehner: Obama's Overtime Pay Plan Will Kill Jobs

Image: Boehner: Obama's Overtime Pay Plan Will Kill Jobs President Barack Obama visited a Gap clothing store in New York City on March 11 to highlight his proposal to raise the federal minimum wage.

Wednesday, 12 Mar 2014 12:55 PM

By Melanie Batley

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President Obama's unilateral plan to force American businesses to pay millions more in overtime is being met with strong resistance from the business community and Republicans, who say the executive order does little to help Americans who still can't find work.

“If you don’t have a job, you don’t qualify for overtime. So what do you get out of it? You get nothing," House Speaker John Boehner said, according to The Washington Post. "The president’s policies are making it difficult for employers to expand employment. And until the president’s policies get out of the way, employers are going to continue to sit on their hands.”

Editor's Note: 22 Hidden Taxes and Fees Set to Hit You With Obamacare. Read the Guide to Protect Yourself.

By executive order, the president this week is is expected to expand overtime eligibility to millions of workers, such as fast-food managers, loan officers, computer technicians, and many other employees currently classified as "executive or professional," according to The New York Times.

Congressional Republicans already have successfully blocked a number of elements of the president's economic agenda, and have pledged  to fight his proposal to raise the federal minimum wage to $10.10 per hour from $7.25.

Business groups, meanwhile, are also expected to oppose the move as they have long fought for more flexibility in paying overtime.

"There's no such thing as a free lunch," Daniel Mitchell, senior fellow at Cato Institute told the Times. "If they push through something to make a certain class of workers more expensive, something will happen to adjust."

Stuart Varney, host of Fox's "Varney & Co." described the move Wednesday as "unprecedented."

"This is buying votes. Businesses will have to pay for this. It's going to depress hiring," he said.

Others have a different view of the law's impact.

"I think a potential side effect is that you may see more hiring in order to avoid overtime costs, which would be an awfully good thing right about now," Jared Bernstein, former chief economic adviser to Vice President Joe Biden, told the Times.

The policy is part of a broader political strategy by the Obama administration to appeal to middle class voters going into the 2016 elections. White House officials hope the focus on lifting worker's pay will translate into support for Democratic congressional candidates this fall, according to the Times.

"We need to fix the system so folks working hard are getting compensated fairly," Cecilia Munoz, director of the White House Domestic Policy Council, told the Times. "That's why we are jump-starting this effort."

Company profits in the Standard & Poor's 500 have doubled since the recession ended in June 2009 but wages have remained stagnant for the vast majority of that period. Recently, workers' wagers fell close to an all-time low as a share of the economy, according to the Times.

Under the new rules proposed by Obama, a wider class of salaried workers would be eligible for overtime pay, a move that would potentially shift billions of dollars worth of corporate income into the pockets of employees, the Times reports.

Editor's Note: 22 Hidden Taxes and Fees Set to Hit You With Obamacare. Read the Guide to Protect Yourself.

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