Wages in America: A middle-class mirage
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Wages in America
The president wants businesses to pay more overtime
AMERICA’S workers have seen better days. Over the past decade private-sector wages have grown at an average yearly rate of just 0.3% after accounting for inflation—a fraction of their typical pace of growth. One response, embraced by Barack Obama this week, is to oblige firms to grant 5m more workers “overtime pay”—1.5 times their normal wage—for any period they work in excess of 40 hours a week. Hillary Clinton, the probable Democratic candidate for president, called it “a win for our economy and workers”. The economic evidence behind the policy, though, does not justify her enthusiasm.
The Fair Labour Standards Act (FLSA) of 1938 fixes a threshold salary above which workers are not entitled to overtime. The intention is to strip out managers and supervisors who, the argument goes, are harder to …<div class="og_rss_groups"></div>
Source: The Economy