The Federal Trade Commission banned non-compete clauses in employment contracts, which have proliferated in recent years as a means to prevent (as Senator Bernie Sanders pointed out Tuesday) even low-wage workers like Starbucks baristas from seeking employment with a competitor. Non-competes have become a widely-deployed management trick to limit turnover by closing off the avenues to alternative employment opportunities.
It didn’t last. To the long list of items that went south during the 1970s—heavy industry, the dollar, Main Street, liberalism, literary culture—add the 40-hour work week. The Labor Department stopped increasing x—at first (ironically) because inflation was out of control, later because Ronald Reagan was president, and still later because the Clinton administration somehow never got around to righting this listing ship. Consequently, the proportion of salaried employees who qualified automatically for overtime pay fell to the point where the 40-hour week was no longer a middle-class benefit; it was a poverty benefit, and you had to be extremely poor to qualify. President George W. Bush finally updated overtime rules in 2003, raising x to an annual $23,660, but that was a poverty wage even two decades ago, and because of changes to the duties test, the net effect was that an estimated 6 million workers lost overtime coverage. By 2015, the proportion of salaried workers who qualified for overtime pay automatically was a mere eight percent.
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In the meantime, Biden has restored the 40-hour work week to the middle class for the first time since the 1970s. The median weekly wage in the United States is $1,139. On an annualized basis, that’s $59,228, or just slightly higher than Biden’s eligibility ceiling. That means workers paid very close to the median wage will qualify for time-and-a-half when they work more than 40 hours per week.