The Government as a Low-Wage Employer

August 13, 2013 |

Economy & OpportunityJobs & Income

| New York Times | The Editorial Board

In 1965, in a nation torn by racial strife, President Johnson signed an executive order mandating nondiscrimination in employment by government contractors. Now, as President Obama has observed, the nation is divided by a different threat: widening income inequality. He could respond much as Mr. Johnson did — with an executive order aimed, this time, at raising the pay of millions of poorly paid employees of government contractors.

Recent studies have shown how hundreds of billions of dollars in federal contracts, grants, loans, concessions and property leases currently flow to companies that pay low wages and provide few if any benefits, even as executive pay among federal contractors has risen. In effect, tax dollars are being used to fuel the low-wage economy and, in the process, worsen inequality.

This research has been underscored by a recent complaintfiled with the Labor Department by Good Jobs Nation, a group representing low-wage workers employed under federal concession agreements. The complaint alleges that food franchises operating at federal buildings in the District of Columbia have ignored minimum-wage and overtime laws. The group has also organized walkouts by low-wage workers of vendors licensed to operate at Smithsonian museums, actions that have dovetailed with recent walkouts by fast-food workers around the nation.

Read Full Article