On Thursday, President Obama will roll out his plan for strengthening overtime pay protections for millions of workers. In his view, if more workers got fatter paychecks, they could spend more and stimulate the economy.
But if his critics are right, then employers would end up laying off workers to make up for the higher wage costs. And that would hurt the already painfully slow recovery.
Which scenario is right?
Economists are divided. Some say the proposed changes would give the economy just what it needs: more consumer demand. Others say it would lead to exactly what the economy doesn't need: fewer jobs.
Sound familiar? This is very similar to the intense debate over the president's other proposal. He wants to raise the federal minimum wage from $7.25 to $10.10 an hour. That matter is stalled in Congress, but the White House does have the power to rewrite the wording of the overtime rules.
As Obama lays out his case for changes, the two sides are squaring off — each accusing the other of not understanding how today's economy really works.
Let's consider the arguments one at a time. The president gets the floor first.
Why More Overtime Pay Would Help
Obama is asking the Labor Department to revise overtime pay rules to cover many more salaried workers, such as shift supervisors at fast-food restaurants and convenience stores.
The most commonly used exemption to avoid overtime pay involves designating people as "executive, administrative and professional" employees. Under existing rules, these exempt employees can be denied overtime if they are paid more than $455 a week.
It's All Politics
Obama's Overtime Move Designed To Excite Base, Swing Voters