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Hard Work Doesn't Pay

September 15, 2004

Taking money away from middle-class workers is a puzzling thing to do months before a presidential election. Even Republicans in the House, normally in lock step with President Bush, were taken aback with the regressive new overtime rules imposed by the administration -- hence 22 of them bolted from the party line last week and joined Democrats voting to block the regulations, which took effect Aug. 23.

For those 22, it was a pretty inexpensive act of rebellion. They get to look like heroes to middle-class families in their districts while knowing the House effort to block the rules will almost certainly go nowhere. Not only has Bush threatened to veto the rebel legislation, it's unlikely to survive a conference committee before this session of Congress ends.

More surprising than the GOP mutiny was that the administration would hand such high-caliber political ammunition to Democratic presidential rival John F. Kerry. The administration points out accurately that the new rules will benefit low-income workers by making those who earn less than $23,660 a year automatically eligible for overtime pay. The current ceiling is just $8,060. But another provision would exempt workers making more than $23,660 from overtime protection if they are classified as administrators, professionals or executives. That could apply to a wide range of job descriptions -- technicians of many stripes, teachers and journalists, to name a few.

There's a bit of deja vu in all this. Though the overtime rules don't require congressional action to take effect, last year the Senate passed legislation that would have prohibited the Labor Department from adopting them. Republican leaders, though, stripped the language during a conference committee, and the rules were subsequently implemented.

The timing couldn't be worse for the administration. The overtime rules simply compound worries for many workers whose take-home pay is being eroded by inflation, rising healthcare premiums and the slow pace of wage increases.

Employers have been unusually dependent upon temporary workers, the job-creating machine continues to sputter and the large pool of the underemployed relieves pressure on employers to offer higher wages. A study of the Center on Budget and Policy Priorities shows that the percentage of corporate profits ending up in paychecks during this economic recovery has sunk to a post-World War II low.

Three former Labor Department officials who worked for Democratic and Republican administrations estimate that as a result of the Bush administration's new rules, overtime protection could disappear for 6 million Americans. Bush had better hope they don't vote.

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