There's been a fair amount of hand-wringing about the president's inability to improve the job market, especially without a cooperative Congress. While the president has little he can do directly, there's one idea that hasn't been considered: cracking down on overtime violations under the Fair Labor Standards Act.
For 40 years, workers and businesses alike preferred a loose enforcement policy on overtime. Many workers who spend far more than 40 hours a week on the job are insulted at being considered an hourly worker, or a non-professional. There was a greater desire for flexible schedules than for time-and-a-half. The notion of overtime is so quaint that most people have probably forgotten that the laws exist and can be used to protect them against unreasonable demands of management.
The recession reinforced this trend as companies tried to avoid cutting too many people. It can be career suicide to refuse to do the work that 2 or three people used to, just a few years ago. As corporate profits have improved, though, companies have avoided hiring incremental workers. They can only get away with this because they do not pay overtime. If they did, it would quickly become unprofitable and the better alternative would be to hire new staff.
President Obama has the ability to shake up this status quo. Rigorous enforcement of the FLSA, along with tightening the definitions of who is exempt, would be the right medicine at the right time. Of course, the managers of these companies will complain vigorously; they do not hire in order to preserve their mega-bonuses. But their cries should fall on deaf ears.
Right now, major companies are quite profitable. (The FLSA doesn't apply to small companies). It's the best possible time to force managers to remember that we're better off if more people work 40 hour weeks than if fewer work more. This is a way to transfer income from corporate bank accounts to workers, without a direct government payment. 100 trained labor violation investigators, focused on profitable industries, would result in the hiring of hundred of thousands of incremental employees, and the payment of overtime to potentially millions of others. Except if you're a Republican, what's not to like?
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