As advocates work to raise the federal minimum wage, the Obama Administration is taking action where it can to fight income inequality. President Barack Obama late Monday introduced a proposal to extend overtime payment to more white-collar workers.
Obama unveiled his plan to extend overtime protections to nearly 5 million workers in 2016. He made the announcement in a blog post on the Huffington Post.
The move would cover most salaried workers, who make up to $50,400 a year. Workers earning $23,660 or less now qualify for overtime. The proposal would raise that level to include more workers.
But just like the minimum wage, critics argue Main Street would bit hit hard by costs related to overtime, and that hiring and expansion plans would have to be postponed. Supporters of more overtime pay argue the plan woujld put more cash in workers' wallets, and spark spending.
The fact that Obama has shifted his focus to overtime pay does not mean the fight for $15 an hour is any less prominent, say advocates working for higher wages. "This is just another policy to bring attention to the conditions of working people," said Judy Conti, advocacy group the National Employment Law Project's Federal Advocacy Coordinator. "It continues to put the emphasis on the things we can do to make jobs better for people and create a working economy."
The current federal minimum wage is $7.25 an hour.
Beyond smaller employers, some of America's largest businesses already have raised wages above $7.25 an hour, the federal minimum.
The Gap announced hikes for workers in February 2014, while Wal-Mart and TJX Companies announced raises for workers in February this year. Target followed suit, announcing it would be boosting wages. McDonald's in April said it was raising wages for workers at store owned-locations. Even Facebook joined the fray in May, announcing wage hikes for the vendors and contractors it works with.
"We've always thought a federal $12 by 2020 was reasonable," said Holly Sklar, chief executive of Business for a Fair Minimum Wage, an advocacy group. Congressional democrats are pushing for $12 an hour, while fast food workers are fighting for $15 an hour.
Sklar added the fight will heat up come 2016. "In a way, these moves show that and add pressure to raise the federal wage floor," she said.