A federal judge in Texas this week blocked President Obama’s new overtime rule, which was supposed to go into effect next Thursday. That’s one more thing Americans can be thankful for this season.
The new rule would have affected nearly all American businesses, doubling the salary threshold at which workers must be presumed to qualify automatically for time-and-a-half pay if they work more than 40 hours a week.
Because the rule is now barred from going into effect, working families will have more real income in 2017. As counterintuitive as that sounds, it’s not just our opinion, it’s the conclusion of the non-partisan Congressional Budget Office.
The new rule never held much promise of creating more actual overtime work for people in the workforce. That would require actual wealth creation, not mere bureaucratic fiat.
The most significant predicable effect of Obama’s Canute-like rejection of economic facts would have been the end of workplace flexibility for that half of the working population earning less than $47,476 a year. The boss who used to say it was fine for you to work a few extra hours this week so you could take time off next week to go see your kid’s basketball game, would suddenly have nixed such a humane arrangement because he’d be putting your employer at risk of a federal investigation.
The rule would also hurt ambitious young college grads trying to prove themselves in lower-paying professional fields that require workaholism, such as political journalism. It’s hard to rise to the top when federal regulations require your boss to order you home at 5 p.m.
Obama’s meddlesome rule would also have depressed wages of new hires because employers would take into account the likely extra payments for overtime. It would probably also prompt employers to make more jobs part time just to keep scheduling simpler.
Some workers would have been better off, but the benefit to them would have been outweighed by the harm to others and the higher prices businesses would have had to charge consumers for goods and services. Workers are consumers too. Their real income goes down when prices go up.
Like most of Obama’s labor policies, the overtime rule was a recipe for keeping wages stagnant and conjuring new bureaucratic nightmares for employers — hardly a way of creating jobs.
But the court’s ruling has another, more significant effect that is especially worth mentioning as Obama leaves the Oval Office. Because he lost the public’s confidence after two years in office, Obama lost control of Congress in 2010 and never got it back. Instead, he spent six years trying to govern unilaterally with executive orders.
As annoying as conservatives found this at the time, it does mean most of Obama’s economy-crippling legacy consists of bureaucratic rules, which can be nixed overnight, rather than of laws, which would require repeal.
With the noteworthy exceptions of Obamacare and the Dodd-Frank financial reform bill, Obama will not leave much behind when he vacates the Oval Office.
