New Overtime Reforms Will Benefit 12.5 Million Americans

A combination of inflation and out-of-date regulations has prevented too many us from getting paid for all of the hours we work. Despite the fact that our economy is increasingly productive, families across the country are feeling the one-two punch of sluggish wage growth and rising costs on the things we can’t do without: housing, child care, education, health care, and other basic necessities. When overtime protections were first introduced, they covered more than half of all salaried employees. But now a mere 8 percent are covered.

Nearly all of us are working extra hours, and the money we should be paid isn’t making it home to our families. Something in the system is broken. And at least part of that something is our nation’s overtime rules, which a few powerful corporate interests like the Chamber of Commerce and National Retail Federation have kept stagnant so that they can get as much free labor as possible and grow their own profits.

Presently, overtime protections only apply to certain individuals making up to $23,660 a year, which is less than the federal poverty line for a family of four. But the Obama Administration has issued a new rule that will help more people receive extra pay for extra work. This is the kind of action taken by presidents of both parties in the past—from Franklin Roosevelt in 1940 to Gerald Ford in 1975.Through this reform, the Administration is expanding access to overtime protections for millions of working people who are currently struggling to climb the economic ladder.

12.5 million Americans in all stand to benefit from the reform.

Soon, employers will be required to provide overtime protections for qualified employees making less than $47,476 in 2016. That means people earning below this annual salary will be paid time-and-a-half for every additional hour they work beyond 40 hours a week. And the Department of Labor plans to increase the salary eligibility level every three years to make sure people aren’t getting left behind. Odds are that this policy fix will have a significant positive effect on you or someone you know—12.5 million Americans in all stand to benefit from this reform.

Dawn Hughey, for example, managed a Dollar General store outside of Detroit where she earned just shy of $35,000 a year; and she did working 70-hour weeks without any overtime pay. But with these new overtime protections, Dawn would have earned either a substantial pay bump or had many extra hours of her life back every week.

Requiring an employer to pay people more when they work extra hours isn’t just the right thing to do. It will also help kick-start our out-of-balance economy by incentivizing employers to hire new staff, ensuring that our friends and neighbors can afford to purchase basic necessities, and boosting commercial activity on Main Street, which helps all of our communities thrive. In all, expanding overtime protections will create somewhere between 120,000 and 300,000 new hourly jobs as employers staff up to avoid paying time and a half, giving their current employees extra time with their families or much-needed discretionary time.

Our country’s wage and hour laws were enacted with the belief that Americans should earn a fair day’s pay for a fair day’s work. Rewriting our overtime rules will not only help move us towards that goal, but also allow working people more time to live their lives outside of work and more money to spend in their communities.  And that’s key to creating an economy that works for all of us.


Comments +

First Person

Middle Class Work Deserves Middle Class Wages

This post was originally published on Medium.

Single mom Elizabeth Paredes is the assistant manager of a sandwich shop in Tucson. She’s paid a flat salary of $24,000 per year. While she routinely puts in 50 or more hours each week, she doesn’t earn a single dime of overtime. That’s because, under outdated rules that govern the overtime eligibility of managers, her employer doesn’t have to pay her for the extra hours she works.

When I was a kid growing up in Buffalo, a job like Elizabeth’s was a well-paying, middle-class job. Being a manager meant being in the middle class. And rightly so. Managers supervise people, open and close the store, handle the money, and make important decisions. They should be able to own a home, raise a family and build a nest egg for retirement.

These were middle-class jobs by design. The blueprint was the Fair Labor Standards Act, which gave most Americans the right to a minimum wage and time-and-a-half pay when they worked more than 40 hours in a week. The Fair Labor Standards Act was the crown jewel of worker protection and helped build the middle class.

But because of both the erosion of the salary threshold over time and concerted policy choices made by the previous administration, that crown jewel has lost its luster. So we’re taking action on behalf of working people like Elizabeth Paredes.

New rule

Today, the Department of Labor announced a significant change to the overtime rule that simply hasn’t been working for working people. In the process, we’re making it simpler for employers to identify which white-collar workers are covered and owed time-and-a-half for work beyond 40 hours in a week.

For decades, the salary threshold under which all white-collar, salaried workers qualify for overtime has failed to keep up with the rising cost of living. In 1975, 62 percent of full-time salaried workers were eligible for overtime protection based on their pay. Today, only 7 percent are eligible under the outdated salary level. The current salary level is so low that it does not effectively identify which white-collar workers are entitled to overtime protection. That is an economy out of balance.

So we’re fixing it. We have more than doubled the salary threshold — lifting it from $23,660 to $47,476 per year. That means some 35 percent of full-time salaried workers, based on their pay, will now be eligible for overtime.

What does this mean?

It means that Elizabeth and other workers like her will finally be entitled to overtime pay. Whether they’re assistant managers at a restaurant or supervisors in the human resources department, white-collar workers who earn below the new salary threshold have their overtime protections restored.

Employers have options for how they respond to the new rule, and they’re likely to do the following:

  • Pay time-and-a-half for overtime work.
  • Raise workers’ salaries above the new threshold.
  • Limit workers’ hours to 40 per week.
  • Some combination of the above.

Who benefits?

Today’s rule change, which takes effect on Dec. 1, will benefit 4.2 million workers, making them newly eligible for overtime protections. It clarifies for another 8.9 million salaried workers that they, too, remain entitled to overtime. Now, millions of these middle-class jobs are more likely to be rewarded with middle-class pay, and the millions of Americans who sacrifice family time to work extra will earn extra. If their employer chooses to send them home instead of paying for the extra hours, then it means extra time for family or other professional pursuits.

If you work full-time in America, you should be able to get by; when you work extra, you should be able to get ahead. That’s the commonsense principle we’re reaffirming today. With today’s update to the overtime rule, Elizabeth Paredes and millions like her will be able to punch their ticket to the middle class.



When Landlords Discriminate

This article contains a quote from an interview that may be offensive to readers.

With over a four-fold increase since the 1970s, the United States now boasts the highest rate of incarceration in the world. One in 100 adults are behind bars, and 650,000 return home each year. But where can they live? Although stable housing is key to successful social reentry and preventing recidivism, those with criminal records face enormous barriers in the housing market. They are limited not only by their economic circumstances—facing significant barriers to employment—but are often locked out of the housing they can afford. This makes the Department of Housing and Urban Development’s (HUD) new guidance—which limits the use of criminal history in tenant screening—incredibly timely, if not overdue.

Those with criminal records are not a protected class under the Fair Housing Act, which prohibits “discrimination on the basis of race, color, religion, sex, disability, familial status or national origin.” But because of the disproportionate numbers of African-Americans and Hispanics with criminal records—due in large part to law enforcement practices that have unfairly targeted them—minority renters will be unfairly burdened by blanket rental policies that exclude those who have spent time in prison, regardless of any intent to discriminate. HUD’s new guidance reminds landlords that categorically refusing to rent to people with criminal history may, then, be a violation due to “disparate impact.”

The power of this guidance depends on the actions of one important group of people: landlords. For the past three years, we have led a sociological study of 130 landlords in Baltimore, Dallas, and Cleveland, addressing the key question of how landlords decide whom to rent to.*  While most landlords who rent to poor families will overlook a misdemeanor, few said that they would accept individuals with felony convictions.

Discrimination is not always intentional, but it can have insidious effects on vulnerable populations.

Landlords in our study have a variety of official screening techniques at their disposal to sort through tenants: criminal background checks, calling previous landlords, credit checks, visiting a tenant’s current apartment, and verifying income. But many operate far outside this standard toolbox to find the tenants they want. Indeed, it is perfectly legal for landlords to use their discretion when it comes to many forms of tenant screening, but illegal discretion is common too, for example in the case of families with children. While these impressionistic techniques are sometimes used to circumvent fair housing law, they more often reflect the unconscious biases of landlords in ways that may jeopardize the successful implementation of HUD’s new guidance.

The guidance will likely be most effective for managers like Tracy (whose name has been changed to protect confidentiality), who oversees a large apartment complex in Dallas. Well-versed in fair housing law, professionals her like discuss their screening criteria in precise and rehearsed terms. There are small ways in which she can exercise discretion, mostly by marketing properties more enthusiastically to certain demographics, but the actual screening process is largely outside of Tracy’s control. Her complex simply purchases software from the Texas Apartment Association. She plugs in the information from each application and hits submit—the system determines eligibility.

This isn’t just a matter of efficiency. Corporate landlords intentionally take discretion out of the hands of managers like Tracy, reducing vulnerability to discrimination claims. So long as property managers rely on the software algorithms, owners are protected from litigation. But highly professionalized corporate managers like Tracy represent less than half of the low-end rental market. The rest are individual operators owning anywhere from one to a few dozen properties that they manage themselves, making up the rules as they go along.

Gus is one of these “mom and pop” landlords who uses quite a bit of discretion picking his tenants. Now in his early 60s, Gus spent his career at a money management firm where he amassed enough personal wealth to buy a house in Dallas’ tony Highland Park. But when the firm downsized and Gus was pushed from the high-energy world of stockbroking to a staid quasi-retirement, he decided to invest in low-end rental properties.

We spent two days with Gus, riding shotgun in his truck while he went about his business. Gus started off the screening process by text message, sending photos of the unit and a flood of screening questions to potential renters. The first applicant got only to question two. Though he stated his income was $3,500 per month as a contractor, he could not provide proof. Gus noted dismissively, “That guy eats what he kills,” and put the phone back in his pocket.

Later on, Gus met another prospective tenant at a McDonald’s. He ate in relative silence while the middle-aged, African-American woman filled out the paperwork. He collected a $40 application fee, and said he’d be in touch. Back in the truck, Gus confided that he would never actually conduct the background check the fee is intended to cover. Her willingness to be screened was enough. That, and a face-to-face meeting, was all he needed. He accepted her application the next day.

It’s not that Gus thinks screening isn’t important—he’s intimately familiar with the costs of placing the wrong tenant. But he believes that the characteristics of a good tenant aren’t written on their application or in their demographic profile. He seeks some unmeasurable quality—a combination of personal responsibility and stability. At first blush, his strategy appears in sync with HUD’s guidance to take context into account. But like many landlords, Gus’s biases are embedded within a highly racialized worldview.  To illustrate this, Gus noted that most of his tenants are black or Hispanic and he would never reject someone based on race, but in the next breath declared, “If they’re just some n***** I don’t want them.”

Gus’s story embodies two key challenges to the goal of preventing discrimination based on criminal history. First is that Gus’s screening process exists outside of both the legal and illegal practices anticipated by HUD. Taken as a whole, his techniques almost certainly result in disparate impact, but to accurately sort out what criteria he is using to make his decisions is largely impossible even when we witnessed it first hand. In addition, the enforcement regime for a landlord like Gus presents an enormous challenge. Gus, and millions of landlords like him, float under the radar of such evaluations. Individually, they are small-time players, but taken together, they represent an enormous portion of the market.

Criminal background checks serve as one of the key mechanisms by which landlords make distinctions—an easy and readily available proxy for responsibility and stability. But they are too often a convenient camouflage for discrimination. HUD’s new guidance hopes to provide tools to litigate non-compliant landlords and incentivize others to rethink their screening policies. However, the policy has blind spots. For example, does the requirement that landlords evaluate criminal records on a case-by-case basis solve the problem? Gus’s story suggests that it may not. Most of the discrimination that we saw occurs on a case-by-case basis, through the gut-feelings of small-time landlords.

Furthermore, the guidance does not apply to the blanket exclusion of renters with drug distribution convictions, who are not protected under the Fair Housing Act. There is a deep irony here. Though the War on Drugs is not solely responsible for mass incarceration, it has nevertheless sent hundreds of thousands of Americans to prison in recent years for nonviolent drug offenses, with a staggeringly disproportionate effect on African-Americans. Those locked up for drug-related crimes made up just over half of the federal prison population in 2014. In other words, a huge portion of those who have spent time behind bars will not be protected under this guidance. This caveat raises larger questions about how those with criminal records can and should be reincorporated into society. HUD encourages landlords to think about whether their practices keep the community “safe.” But if we want citizens from prison to reintegrate, isn’t making sure they find roofs over their heads part and parcel of this endeavor?

Landlords have enormous power when it comes to deciding who lives in their homes. And while discrimination is not always intentional, it can have insidious effects on vulnerable populations. This makes it ever more important to clarify the discretion that landlords have in implementing the new HUD guideline. This will better protect the formerly incarcerated, integrating those who are vulnerable into society by allowing them access to homes, rather than ostracizing them.

*This research received funding from the Department of Housing and Urban Development and the Furman Center for Real Estate and Urban Policy. Opinions expressed herein are solely those of the authors.



If You’re Low-Income, America Is Still an Oligarchy

The U.S. isn’t an oligarchy after all.

At least that’s the argument in a recent article by Vox’s Dylan Matthews. Matthews cites new research finding that the rich and middle class agree on about 90 percent of bills that come before the United States Congress. He adds:

That leaves only 185 bills on which the rich and the middle class disagree…

…on these 185 bills [in which the rich and middle class disagree], the rich got their preferred outcome 53 percent of the time and the middle class got what they wanted 47 percent of the time. The difference between the two is not statistically significant.

Of course, that leaves out another group of Americans entirely: the poor. Admittedly, individuals cycle in and out of poverty so the notion of who is poor isn’t static. But that doesn’t change the fact that the poor are not only the least-represented group in American society, they’re also the contingent arguably most affected by federal policy decisions. So how do bills supported by low-income Americans fare? Not so well. The passage rate for bills favored only by low-income groups is 18.6 percent—slightly lower than those that lack support from all of the income groups. In fact, as the study’s authors conclude, “These results suggest that the rich and middle are effective at blocking policies that the poor want.”

What’s more, policies favored by the middle class and poor, who together comprise a majority of Americans, passed just 20.4 percent of the time, while those favored by only the rich passed 38.5 percent of the time. In other words, the rich had more success getting their policies enacted than the middle class and poor combined—which is the very definition of an oligarchy.

slevin1Underscoring how little representation low-income Americans receive at the federal level, another recent report found that Members of Congress from states with higher poverty rates were also less likely to support measures that help their low-income constituents.

Each year, the Shriver Center ranks Members of Congress from every state based on how they vote on a series of anti-poverty measures, ranging from the Child Tax Credit to Medicaid. Given that these programs earn overwhelming support from low-income voters (and most income groups), the Shriver rankings also illustrate the responsiveness of elected leaders to the concerns of low-income people.

In most cases, the divisions fall along party lines. In California, for example, every Democrat received either an A or A+, while every Republican received either a D or F. But party identification wasn’t the only predictor of a Member’s voting record. States like Louisiana, Alabama, Kentucky, and Arkansas all have poverty rates above 19 percent—some of the highest in the nation. Yet each of these states has a state delegation grade of D or F. In Mississippi, the state with the highest poverty rate in the country (21.5 percent), Senators Thad Cochran and Roger Wicker both received F grades.

In contrast, Connecticut and Maryland—ranked 48th and 49th in poverty levels—received A grades for their state delegation. Massachusetts, the state with the best average voting record in the country, also has one of the lowest poverty rates.


slevin3Of course, correlation isn’t causation. The fact that states with higher poverty levels also have records that fail to reflect the preferences of many low-income voters doesn’t mean a higher poverty rate leads to undemocratic voting records. More likely, the two share some root causes. Many of the states with the highest poverty rates are located in the Deep South, a region that has historically been hostile to worker organizing and political participation by low-income people in addition to its legacy of slavery and Jim Crow.

But the report sheds some critical light on the paradoxical relationship between families who live in poverty and the politicians charged with representing them. And it suggests that for the most vulnerable Americans, the U.S. is far from democratic.



How Gentrification Exacerbates Hunger

Washington, D.C. is the most expensive place in the country to raise a family of four—a fact that disproportionately harms the ability of low-income residents and residents of color to thrive. Inequities extend from job security and high-quality education all the way down to families’ day-to-day ability to access healthy, affordable food. While wealthy residents of D.C.’s Ward 3 have their pick of 11 full-service grocery stores, families in Ward 8—also home to some of the highest poverty rates and obesity rates in the city—are faced with only three options. To make matters worse, higher-end stores such as Whole Foods and Trader Joe’s have cropped up all over the District’s gentrifying neighborhoods. Instead of bringing access to affordable and nutritious food, the increased demand spurred by the stores can result in long-time residents being priced out of their neighborhoods.

This displacement has resulted in significant demographic shifts across the D.C. area. Until recently, black families comprised a majority of the city’s residents—about 60 percent in 2000. But as of 2014, only 49 percent of Washingtonians are black. Black families who have been displaced from the city due to its high cost of living have been replaced by an influx of mostly white newcomers, along with a growing Latino population.

Gentrification in our cities isn’t new, nor are the debates that surround it. But what is less discussed is how gentrification weakens displaced families’ access to social services that are critical to achieving social mobility. In D.C., local organizations and advocates that work to bring food access to low-income families have watched the number of families they serve dwindle.

One such organization is Martha’s Table, a nonprofit that has been part of the fabric of D.C.’s 14th Street Corridor for over 35 years. Martha’s Table provides everything from early childhood education and after-school programming to youth employment and service learning opportunities. It is perhaps best known for its Healthy Eating Initiative, which coordinates mobile food trucks and farmers markets, reaching some 20,000 residents a year.

But its holistic efforts to ensure that services are meeting the needs of the surrounding community have been compromised by a troubling trend: long-time residents and Martha’s Table beneficiaries are being priced out of the neighborhood. New residential and commercial developments in the historically black neighborhood have attracted a flood of white, affluent newcomers. Due to the lack of affordable housing in D.C., low-income residents are pushed to the periphery of the city and surrounding suburbs, which has undermined the ability of city-based organizations like Martha’s Table to serve them. As Director of Stakeholder Engagement Ryan Palmer says: “35 years ago, this was the epicenter of all of the things that we are trying to address. Now people are taking two to three buses to get here.” In order to stay true to its mission of working in the communities it serves, Martha’s Table is reducing services in its current location and moving its headquarters east of the Anacostia River to Wards 7 and 8 by 2018.

Even when residents don’t leave the neighborhood, they now have to travel far and wide for basic necessities. Kim Williams is a mother of three children who have benefitted from Martha’s Table programming for four years. She has lived in the 14th Street neighborhood for over 35 years and has seen how its changes have shaped her family’s access to healthy, affordable food. “I can’t afford to grocery shop in the area, so I physically live in the neighborhood but I leave to shop for food. The stores in the neighborhood are for new people coming [here]—not for the families who have been here for generations.”

Kim Williams with her three children. (Tyrone Turner)
Kim Williams with her three children. (Tyrone Turner)

Williams went onto discuss the tradeoffs she is forced to make to ensure she has food for her family. “It’s more cost-effective for me to buy meals from McDonald’s than to spend money on healthy food. And if I do buy healthy food, something else suffers—I won’t be able to pay my bills or something else.”

In an effort to bring a comprehensive set of services into a single location, Martha’s Table is now engaging residents of Wards 7 and 8 in order to shape what will be provided at their new headquarters. But these efforts may be undermined by looming residential and retail development projects that would add 900,000 square feet of commercial properties and 500  residences to Martin Luther King Avenue, a mere 8 percent of which will be affordable housing units. The development is already projected to shift the demographics of these neighborhoods. As Martha’s Table’s Palmer told TalkPoverty, “I would be lying if I said I haven’t wondered what changes will happen in the neighborhood between now and the two years when we get there.”

Across the city, D.C. Central Kitchen (DCCK) has also experienced the effects of gentrification. Through its Healthy Corners effort, DCCK sells nearly 88,000 healthy food products in corner stores throughout low-income wards. But increased rents in those areas have undermined efforts to increase participation in the program.  As Chief Development Officer of DCCK Alexander Moore states, corner store owners are “worried about getting a return on their investment and that makes it much tougher to integrate those stores into our program.” And, due to the decreased supply of affordable housing that arises from gentrification, many store owners simply cannot afford to live in the community where their store is located—which makes them less invested in building the community relationships necessary for marketing the healthy produce and increasing food access for low-income residents. The end result? Low-income residents are unable to access fresh, affordable produce at the local corner stores, while affluent newcomers have access to multiple full-service grocery stores within walking distance of their homes.

The effects of gentrification have also spilled over into the organization’s employment programs. DCCK offers a 14-week Culinary Job Training Program to more than 100 residents in order to prepare them for careers in the food service industry. This initiative has a hiring rate of over 90 percent for graduates. But, due to displacement, there is a growing demand for job training from Maryland residents who once lived in the District. It’s not unheard of for DCCK to provide job training to a parent living in Maryland’s Prince George’s County, while their child resides at a family member’s apartment in the District so they have access to D.C. public schools.

A key way to meet the needs of long-time neighborhood residents—rather than simply shifting them elsewhere—is by investing in more equitable development strategies that ensure the engagement of these residents in the planning, implementation and evaluation of development projects. Currently, there is little opportunity for residents to actively participate in discussions about changes in their neighborhoods. In a recent interview for Empower D.C., Linda Brown, a public housing resident, stated, “The main thing is that residents aren’t presented with the facts and so they can’t make sound decisions or have any input if they’re not presented with the facts.” Brown said that residents are often asked for input only once development processes have begun to take place, at which point they wield very little power or influence.

One hope for ensuring that long-time residents are able to reap the benefits of food-access initiatives is D.C.’s inaugural Food Policy Council. The Council will work to promote food access, sustainability, and a local food economy in which residents, local schools, hospitals and other organizations buy locally-grown food. Advocates like DCCK’s Moore see this development as positive. He is hopeful the Council can provide a “forum for diverse insights for what we need to do with our food system” by “investing purposefully in equity and ensuring all community voices are at the table.”

Organizations like Martha’s Table and D.C. Central Kitchen have set a good example for addressing inequities that are compounded by gentrification, such as hunger and food insecurity.  The Food Policy Council has the potential to expand upon these efforts by making a more sustainable local food economy in the city. But unless we engage the very communities that these programs intend to support, these initiatives will serve a shrinking population—and not because low-income residents have achieved social mobility, but because they have been priced out.