Noah Smith, Columnist

Obama's Overtime Rule Defies Econ 101

Mandating higher pay for working extra hours could hold back base wages.

June 9, 2016 at 12:00 PM UTC

Noah Smith is a former Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.

The clock can be your friend.
Source: Daily Herald Archive/SSPL/getty images

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The Barack Obama administration recently changed the rules for overtime pay. The rule affects only salaried workers, since hourly workers already receive overtime. Specifically, the new dictum mandates overtime pay for people earning salaries between $23,660 and $47,476, who previously weren’t guaranteed this benefit.

How should we expect this change to affect the economy and the workplace? The answer isn’t easy.