Americans making $36,000 or more a year don't qualify for overtime. Biden could fix that right now.

• Paul Constant is a writer at Civic Ventures and the cohost of the "Pitchfork Economics" podcast.
• A recent episode explored why overtime pay has stagnated, and how President Biden can fix it.
• Only 15% of salaried workers qualify for overtime, despite working more hours than hourly staffers.

"Time is money" is more than a cliché — it should serve as a foundation for what work means in America.

From the late 19th century into the 20th century, generations of workers — many of whom were working up to 100 hours a week — fought for a cap on work hours. But since the 40-hour workweek was written into law in 1940, employers have been quietly pulling back employees' personal time.

A 2019 Gallup poll found that 39% of full-time American workers reported working at least 50 hours in an average week. Gallup also reports that salaried Americans work more than their hourly counterparts, averaging 49 hours a week — with few of them qualifying for overtime pay.

In 1975, 62% of the salaried American workforce was earning time-and-a-half if they logged more than 40 hours in a week. But that threshold has only been updated once over the last few decades — in 2004 by the Bush administration — to account for inflation. As a result, only 15% of salaried workers today are eligible for overtime. In other words, every worker earning more than $35,568 per year is putting in every hour over 40 hours for free.

President Biden could fix this — without needing the cooperation of Congress — by calling on the Department of Labor to raise the overtime threshold. It's a wildly popular policy, with one survey finding that 91% of Democratic voters and 85% of Republican voters support overtime protections, and its adoption could make or break Biden's political fortunes in the midterm elections and in 2024.

We're used to working for free, and companies know it

In a recent episode of the "Pitchfork Economics" podcast, hosts David Goldstein and Nick Hanauer interviewed Marcus Baram, a journalist who recently spoke with workers around the country about overtime protections for the nonprofit publication Capital & Main. Baram said politicians on both sides of the aisle allowed the overtime threshold to stagnate, and today it sits at an embarrassingly low level.

As trickle-down economics gained dominance, he explained, politicians allowed worker protections to atrophy because they believed it was more important to prioritize shareholder primacy over employee pay — in other words, putting corporate profits over paychecks.

One woman Baram interviewed for his story who earned a $24,000 annual salary in 2015 was ineligible for overtime pay because her salary was just above the threshold, despite working 10 to 15 hours per week over the 40-hour workweek. That worker went to her manager to demand overtime pay or higher wages, but she said he shrugged off her demands, telling her flatly, "That'll never happen."

The "insidious" slow erosion of overtime standards means that "people get used to this new miserable situation," Baram said on the podcast. "They have no expectations of anything better." Hanauer added that employers get more than just free labor with low overtime standards. If they're squeezing, say, 10 extra hours from their employees every week, they're getting the productivity of five workers out of every four employees. "If you prevent people from turning three 40-hour week jobs into two 60-hour week jobs, you can create a lot of jobs in an economy of our size," Hanauer said.

'The minimum wage for the middle class'

Overtime protections give workers the sense that their time has value. Under a restored overtime threshold, employers would have to either ask workers to work more hours in exchange for dramatically larger paychecks, or workers would get their personal time back to spend with their families or in their communities. During the early lockdowns of the pandemic, Baram said, workers enjoyed the extra time that they used to put toward commuting.

Now, with increased labor activity and rising public support for unionization, workers are starting to demand that employers honor their time. Striking nurses and railroad workers have both cited overloaded work schedules as a reason for their labor disputes, demanding better schedules, higher pay, or both.

For a president like Biden, who's repeatedly centered the working and middle class in his economic policies, raising the overtime threshold in this moment is a no-brainer. Baram said Biden should consider states like Washington, Oregon, and California as a model — all three have high overtime thresholds, and their economies are booming, with equal or better job creation than other states of the same size and high state GDPs.

In Washington state, for example, the yearly salary threshold for workers eligible for overtime will reach $85,000 after a phase-in period of several years, a number the state reached after discussions with employers, unions, and many other stakeholders, Baram added. Additionally, Washington tied the threshold to the state minimum wage, meaning that middle-class workers enjoyed an increase in overtime protections every time the minimum wage increased. This makes sense, Goldstein said on the podcast, "because if you don't have maximum hours, the minimum wage is meaningless — employers will just pay you the minimum and then work you more hours."

That, Goldstein added, is why he calls overtime "the minimum wage for the middle class." Someone looking to make inroads with voters in the midterm elections and in 2024 could do a lot worse than pass popular legislation that gives a majority of Americans a raise, more free time, or a little bit of both.