In March of 2022, the hourly earnings of American non-farm employees were rising at a rate of 5.9 per cent on a year-over-year basis, according to the Economic Policy Institute, a Washington think tank. By this summer, the rate of wage increases had fallen below four per cent.
The New Yorker
September 16, 2024
It’s also possible that management could say all workers were paid hourly, letting high-up staff avoid income taxes on their compensation.
“It is not unreasonable to imagine that this policy would lead to a world where corporate CEOs earn $4,000 an hour plus $6 million in overtime,” wrote Heidi Shierholz, senior economist at the left-leaning EPI Action.
MarketWatch
September 16, 2024
The Harris campaign’s take was echoed by economist Heidi Shierholz, who leads the Economic Policy Institute, a left-leaning nonprofit think tank.
“Trump’s new playbook is to claim he won’t tax the earnings of the very groups of workers whose earnings he already has a clear record of undermining,” noted Shierholz, who was formerly chief economist at the Department of Labor.
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Further, Trump’s proposal could wind up mostly benefiting the highest-paid Americans, according to Shierholz.
“To allow their salaried, overtime-exempt workers to get the tax cut, employers could easily switch them to hourly,” she noted. “It is not unreasonable to imagine that this policy would lead to a world where corporate CEOs earn $4,000 an hour plus $6 million in overtime.”
CBS Moneywatch
September 16, 2024
Other critics noted that the proposal would be easy to abuse. “Trump’s claim that he would exempt overtime from taxes is deeply unserious. This policy would be incredibly easy to game,” said Heidi Shierholz, who heads the liberal Economic Policy Institute. “Employers could (and would) easily switch salaried, overtime-ineligible workers to hourly—and set the hourly wage so that, with overtime, they are paying no more than they paid before—and allow their workers to get the tax cut.”
Shierholz added that the winners from the plan would likely be high-income. “[A] huge share of the expenditures on this tax exemption would go to very highly paid workers,” she said. “And good lord, big-firm lawyers would love this.”
Fiscal Times
September 16, 2024
“Trump has a long anti-overtime record,” Heidi Shierholz, senior economist at EPI Action, a labor-oriented advocacy group, said in a statement. “While president, he stripped overtime protections from millions by refusing to defend the Obama-era overtime rule in court and instead publishing his own, much weaker rule.”
By shifting the income eligibility level at which the Labor Department requires workers be paid overtime, Trump helped push an estimated 3.2 million workers out of the category designated to get the extra pay, usually at time-and-a-half, Shierholz’s analysis showed.
An additional 5.2 million workers were subject to losing overtime payments from businesses that could misclassify them as managers or executives, a frequent maneuver employed by businesses, Shierholz said. And rules proposed by Project 2025 — written for a new Trump administration by Trump allies and former aides, but which the former president insists he will not follow — “would strip overtime protections from at least 8 million [additional] workers,” Shierholz said.
LA Times
September 16, 2024
“The vast majority of hourly workers are automatically overtime eligible, regardless of how much money they make,” said Heidi Shierholz, who was the chief economist at the Department of Labor under the Obama administration.
The relative ease with which hourly employees can earn overtime could create a huge tax incentive for more Americans to reclassify themselves as hourly workers. The cost of the tax cut would depend on whether such legislation limited the ability of corporate executives or high-paid lawyers to modify their own compensation and make a chunk of it tax free.
New York Times
September 16, 2024
An analysis of anti-union laws in states across the country by the nonpartisan Economic Policy Institute shows that they have resulted in lower unionization rates, reduced benefits, and lower pay for workers. Full-time workers in states with anti-union labor laws are paid on average $1,670 less per year, or 3.2% less, than workers in states without such laws.
Michigan Independent
September 16, 2024
But business groups sued to stop Obama’s rule from taking effect, and then Trump won the presidency. Once he was in the White House, Trump rolled out a watered-down version of Obama’s proposal that gave far fewer people overtime pay.
The Economic Policy Institute, a progressive think tank that was influential in crafting the Obama plan, said that Trump’s rule was a betrayal of his campaign promises to help the working class.
“This administration is effectively turning its back on millions of workers,” the group said at the time.
Huffpost
September 16, 2024
Economists call this “occupational segregation.” There’s less of it than there used to be, noted Heidi Shierholz at the Economic Policy Institute. But it’s still a big factor in the gender pay gap.
Similarly, “women shoulder disproportionate responsibility for caregiving in our society,” she said. “That is changing, but it is still the truth.”
Marketplace
September 16, 2024