Skip to content
Subscriber Only
Noah Smith

Obama's Overtime Rule Defies Econ 101

Mandating higher pay for working extra hours could hold back base wages.
The clock can be your friend.

The clock can be your friend.

Source: Daily Herald Archive/SSPL/getty images

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.