On Monday evening, President Obama took to the Huffington Post to announce that he would more than double the threshold for what a person can earn and still be eligible for overtime pay, from $23,660 to $50,440, expanding the number of workers who qualify by 5 million. The new cutoff will restore the threshold to what it was in the 1970s, adjusted for inflation.
The change is “good for workers who want fair pay,” the president wrote, “and it’s good for business owners who are already paying their employees what they deserve—since those who are doing right by their employees are undercut by competitors who aren't.”
The new rule will be a boon to certain groups. As Lydia DePillis writes in The Washington Post, “If all salaried managers making between $455 and $970 per week suddenly became eligible for overtime, the change would disproportionately affect women, minorities, younger people, and the less educated,” who are overrepresented in the jobs that pay in that range.
But, though it may mean a lot to some workers, economist Daniel Hamermesh of the University of Texas was quick to emphasize that this is a relatively small measure, when considered in the context of the entire American economy. “Of all the things that could be done to improve the economy, it’s not a biggie,” said Hamermesh.