Instead of Not Taxing Overtime Pay, Pay People More and Work Them Less
My dad worked for 37 years in a steel mill in Youngstown, Ohio. He was a millwright for most of that time. He paid dues to the steelworkers union every year, walked picket lines, went to union meetings and read union material. Dad also never missed a chance to vote in a civic election. You name it—Presidential, Congressional, governor, state legislative, county, and municipal elections got him to the polls. It was a duty of citizenship; a way that a working-class guy could have a say in how his world was governed. And he always voted Democratic. Dad did so because “the Democrats were for the working man and the Republicans were for the rich.” Mom also voted for the Democrat candidate, because she thought the party was better for the working woman and her kids. Mom passed 20 years ago, but my father recently turned 96. He voted in 2024. And still he has never voted for a Republican. I know he’s my father, but I’m proud of his political acumen.
I thought of Dad’s persistent partisan political support when Missouri Senator Josh Hawley introduced a bill to “exclude overtime compensation from gross income for purposes of the income tax.” The senator’s press release trumpeting his ‘‘No Tax On Overtime” obsequiously noted that “President Trump promised to change the status quo and put American workers first by ending taxes on overtime pay. Let’s follow through on that promise and deliver a win for workers.”
A “win for workers,” coming from the Republicans? That would be a first in my dad’s lifetime.
It does sound worker friendly. Nothing resonates better with any voter than offering to not tax their earnings. With Hawley’s help, we barely tax capital gains, corporate income tax rates have been more than halved since 1950 (from 50% to 21%) and since 1980, average income taxes on the wealthiest have been slashed. American workers earning hourly wages and middle-class salaries have been supporting this country’s economic, political and social infrastructure. They’re due for relief. But Hawley’s deceptive and disingenuous gesture toward a working-class esthetic would only further enrich the business class.
For someone who claims the “Republican Party is now the party of the working class,” his proposal badly misses what is wrong with overtime, and amounts to a trap for the 50% of full-time employees who say they’re working more than 40 hours a week. According to the Bureau of Labor Statistics, nonsupervisory production workers averaged 3.6 hours of overtime per week in 2024. That’s down from over 5 average weekly overtime hours worked in the mid-90’s. Now, while not all workers feel over worked, economist Lonnie Golden has demonstrated the bifurcated nature of the labor market and work hours. American workers are both overworked and under employed. Professor Golden’s research reveals that those working too much (over 40 hours) would prefer trading off some income for more free time under their control. And those not working enough hours (less than 40) are not clamoring for overtime hours, but rather enough weekly hours at a fair regular rate of pay to make ends meet.
Wage workers logging long hours are doing so either because their standard inflation-controlled hourly rate has been flat for over 40 years, or their employers require a minimum number of mandatory overtime hours. Remember, it’s always cheaper for the employer to work folks to near exhaustion than to pay them more for fewer hours and hire additional people. What Hawley’s bill ignores is that working hours and hourly wages are interdependent. My dad, and most of his mill buddies, relied on the premium pay that the union contract guaranteed to raise their families’ standard of living. It wasn’t all based on overtime hours, but earnings from non-regular rates of pay (e.g., shift differentials, incentive pay, and overtime pay) often amounted to between a quarter and a third of their annual income.
Exempting taxes from overtime earnings is a trap for workers for several reasons.
It further encourages excessive hours of work. We should be reducing the work week to 32 hours without loss of pay, not dangling a carrot in front of workers to run even longer into their graves. Overtime was originally created as a disincentive for employers not to over work their employees. It is how the labor movement “brought you the weekend.” But too often it’s used as a less expensive way for employers to generate more production and produces negative effects on workers. A study by the World Health Organization and the International Labour Organization found that “working 55 or more hours per week is associated with an estimated 35% higher risk of a stroke and a 17% higher risk of dying from ischemic (coronary) heart disease, compared to working 35-40 hours a week.”
The bill will suppress pressure to raise hourly base wages and salaries, when we instead should be empowering workers to earn a higher share of the wealth they generate in a standard 40-hour work week. A 2007 Bureau of Labor Statistics paper titled, “Some New Evidence on Overtime Use, Total Job Compensation, and Wage Rates,” found that lower incidences of overtime work among jobs with standard 40-hour work schedules were associated with higher wage rates.
Additionally, not all workers—for many reasons, like family arrangements and employment status—are going to have access to overtime. From a purely income perspective, the bill “favors” only those workers able to stay at work longer. Why should some workers be disadvantaged by the tax code?
While the bill focuses on individual earnings, it hides the policy’s negative impact on the government’s investment in the foundations of a prosperous working-class. Exempting overtime earnings from taxes reduces the funding for the hard and soft infrastructure (i.e., public schools, higher education grants, roads, mass transportation, public safety, public health, libraries, parks) that working class folks rely on more substantially than Yale law school graduates, like Hawley, and the country’s millionaires and billionaires.
But the bill is a trap for an even bigger reason—it detracts from doing the things that would substantially improve a worker’s quality of life.
If Hawley genuinely wanted to champion working-class interests, there is a lot he could do that would be impactful. He could vote to raise the federal minimum wage to $15. By doing so, it would lift the floor for millions, and millions more who earn just above the minimum would get a pay boost, too. Oh yeah, he claimed to support that measure and had a chance with Biden’s “Build Back Better Plan,” but when it came time to vote, he took a pass.
Ok, there’s other stuff too. He could support raising the income threshold on overtime pay exemption to salaried workers earning over $58,600, as Biden proposed, so that roughly 4 million additional workers earning less would be eligible for time and a half pay. Whoops. Hawley preferred Trump’s much lower cut off point of $35,500 and therefore, opted to help fewer workers.
Let’s try again, here. He could vote to protect worker pensions. That should be an easy lift, right? My dad might vote for a Republican who did that. And yet, when given the opportunity, he refused to support the Butch Lewis Act, legislation that would have secured Teamster pensions.
Not to worry, there’s other ways to champion people like my father. Senator Hawley could forthrightly lead his party to vote for the union friendly Protecting the Right to Organize Act (PRO Act). The original Act had many features that would strengthen workers ability to unionize and raise their incomes without having to work extra hours. But, no. He had that chance, but instead opposed the Act and voted with corporate America. Here’s how the St. Louis Post-Dispatch editorial board described Hawley’s stance: “Hawley’s recent claim that the [PRO Act] would ‘hurt workers more than it helps’ is classic anti-Labor doublespeak.”
Now to be fair, he has released a conceptual “pro-worker framework” and offered rhetorical support for a revised PRO-Act-like bill. But why go through all that trouble, now? He acknowledges the original bill is dead within his party. Getting Republican support for a revised bill would undoubtedly mean weakening the measure. And he had a perfectly good bill to endorse that labor unions universally supported, and it came with the President’s and nearly unanimous Democrat support. Even his friends at the Teamsters’ union were lobbying for it.
Not to fear. There’s more that a guy can do who wants to go beyond virtue signaling like passing out water on a few picket lines when he wants to get reelected. Hawley could consistently vote with the labor movement on major pieces of legislation. And yet, according to the AFL-CIO’s Committee on Political Education scorecard, Hawley has a lifetime pro-labor record of 11%.
Well, supporting labor is proving more difficult than it should be for this U.S. Senator. How about this? At least he could just say nice things about workers unionizing. But apparently even that is difficult for him. According to the Kansas City Star, he drew a distinction between public and private sector workers joining unions, by stating that government unions were holding “vital government services to people, hostage.” Does that explain why he has been mute on the firings of thousands of unionized federal employees for doing their job? That all seems darn unfriendly to working class folks.
This isn’t primarily about whether Josh Hawley is or isn’t a new breed of union and working-class supporting Republican. It’s about the false narrative that the Republican Party is the party of the working class. Since at least Richard Nixon’s “Southern Strategy,” the idea of a labor-friendly Republican Party has permeated political consciousness. The notion got supercharged when Ronald Reagan won a handful of blue-collar Congressional districts in Michigan. Trump’s popularity with median income households has added to the proposition.
It’s true that Nixon (learning from segregationist George Wallace’s presidential campaign) used non-economic issues like support for the Vietnam War, civil rights and urban crime to peel white working-class voters away from the Democratic Party and separate rank-and-file union members from their union loyalties. From his earliest days in office, Nixon sought to cultivate blue-collar voters and set out to draw both rank and file and labor leadership into a planned “new majority” coalition. He famously embraced building trade union leaders and courted AFL-CIO President, George Meany.
In 1970, that relationship gave cover to the May 8 bloody physical attacks on young people who were demonstrating against the war in the Wall Street section of New York City. Nearby, construction workers were erecting the tallest towers in the world—the World Trade Center—and seemingly on command, they left their work perches and wailed fist flying into the crowd beating protestors. A New York Times story quoted a University of Michigan student witnessing the hard-hat melee saying, “If this is what the class struggle is all about there’s something wrong somewhere.” The press labeled it the “Hardhat Riot.”
In 1972, for the first time since the AFL-CIO chose to endorse presidential candidates, it decided to officially stay neutral. The Nixon campaign charged McGovern with being too radical for working people, and defined him as the candidate of “amnesty, abortion and acid.” According to a Gallup Poll, Nixon went on to win a majority of the union members who voted; the first and only time it has happened. But by 1973, largely due to his anti-inflation economic policies, Nixon’s blue-collar strategy was in shambles and once sympathetic union leaders had grown deeply disenchanted with the president. Meany was publicly berating him for scapegoating union worker demands for pay increases. Pollster George Gallup concluded that Nixon had bet too much that the “hard hat or otherwise was angry, frustrated and bitter at national conditions and ready to switch parties.”
In 1980, Ronald Reagan notably convinced many working-class white voters to view themselves as taxpayers, rather than citizens who needed robust government services. He famously proclaimed at his first inauguration that “government is not the solution to our problem; government is the problem.” Reagan picked up the conservative working-class mantle and lost union household votes by a slim 5%. He even got the endorsement of the Professional Air Traffic Controllers’ (PATCO) union. In a thundering act of unappreciation, after winning the White House, he promptly used his authority to fire striking controllers who were locked in a difficult labor negotiation. Labor historians agree that Reagan’s action signaled to employers that it was open season on breaking unions. Reagan’s hostile worker agenda became quickly evident, and buyer’s remorse set in. In 1981, “Solidarity Day” political rallies in support of organized labor unfolded over two days in Washington, D.C., where an estimated 250,000 to 500,000 people took part. Undeterred, Reagan’s policies shifted wealth from the working class to the rich. Strikes dried up, thousands of good paying union manufacturing jobs disappeared, labor agreements were weakened, and union density fell. It has never recovered.
Disillusionment with the Republican flirtation further settled union member political leanings. Research shows that union households vote at a higher rate than the rest of the population, and vote far more Democratic than the general population. Still, a substantial and growing minority of union members vote for Republican candidates who are extremely hostile to the union movement. Bill Clinton’s 1992 union margin was +31%; Kamala Harris’ was +8%. If Democrats had won the vote of a higher number of union members, they would likely have also captured the White House in 2000 and 2004. Or, if there were just more union members, the Trump-Musk oligarchy and MAGA Republican Party would be relegated to the dark corners of the web, and democracy wouldn’t be at risk.
Nonetheless, non-union working-class voters have grown disaffected from the Democratic Party. In 2016, Hillary Clinton won union households but performed worse with working-class whites than any other nominee of either party since WWII. In 2012, Barack Obama carried the Mahoning Valley, consisting of Youngstown and its suburbs, by nearly 60,000 votes. Four years later, Trump won the valley by more than 20,000 votes, becoming the first Republican President to win a majority of votes in the area where my dad has lived his entire life. And what happened?
In his first term, Trump gave wealthy donors a very luxuriant unneeded tax benefit. He never delivered an infrastructure bill or program to revitalize the manufacturing industry. He told working class folks, like the workers and families laboring in the General Motors plant just up Interstate 80—not far from my hometown—what they wanted and were primed to hear. Then he did what he is doing now, and will continue to do—with a vengeance. As a Rolling Stone expose titled, “Broken Promises: How Trump Betrayed the Autoworkers of Youngstown, Ohio” explained, in 2017 he “made a pledge to the workers of the Lordstown plant that he could save their jobs and their city. Instead, the massive auto plant shuttered and 4,500 workers were left unemployed.”
A winning electoral strategy and governing in the interests of the working class are two separate things.
Republicans have taken advantage of multiple decades of slow percolating genuine working-class grievance and discontent to win votes from groups who once consistently voted Democrat. They have done it by mastering the art of identity politics with appeals to a voter’s essentialist quality. The approach relies on declaring support for working families but basing the outreach to workers mostly on gross racial, gender, sexual orientation and immigrant stereotypes, and thereby stoking fears. But they have failed miserably at the task of developing and implementing substantive policy initiatives that reduce income inequality, grow high quality jobs, provide the foundational supports to allow everyone to enter the labor market, and expand and protect worker rights.
Maybe Hawley and a few other Republicans have had a Saul-on-the-road-to-Damascus conversion. He is a co-sponsor with Cory Booker (D-NJ) of the Faster Labor Contracts Act, which would require employers to start contract negotiations with newly organized workers within 10 days of voting to form their union. Employers typically delay initiating bargaining with hopes of ultimately never having to enter a union agreement. And it works way too often. Hawley and Senator Bernie Sanders (I-Vt.) have also introduced legislation to cap credit card interest rates at 10% for five years. Because workers earn inadequate incomes, they rely on credit payments with usury-level interest rates near 30%. Perhaps Hawley really wants to fight for people like my father. Hell, compared to J.D. Vance’s 0% pro-worker legislative record, Hawley looks like Eugene Debs. Would it be enough for dad to finally find a Republican worth voting for?
In November 2028, if Dad is still in my life and, as my brother-in law says, “God willing and the creek don’t rise,” he will be 99 and will go to the polls again. Perhaps this time he’ll have reason to vote for a Republican. Frankly, I think there’s a better chance of the former than the latter.
Bold to assume we will ever have another free and fair election.
great analysis of real gains for workers