We need to protect mimimum wage contractors

Obama must issue an EO that focuses on job quality when procuring for federal contracts, not just the lowest bid

By Jared Bernstein
Published August 17, 2013 9:00PM (EDT)

This originally appeared on Jared Bernstein's blog, On the Economy.

The NYT has a resonant editorial this morning about the need for an executive order to improve the quality of jobs among federal contractors.

These days, when I say “federal contractor,” you think Edward Snowden.  And it turns out there are lots of them doing highly classified work for which they are handsomely paid.  They are not the folks we’re talking about here.  The workers who would benefit from the EO suggested by the NYT, and in an earlier post by yours truly, clean federal buildings, sell food, sew uniforms for the armed services, provide security services, and so on.  They’re members of the low-wage work force.

The president, to his credit, has been on the stump for a minimum wage increase to help reach these workers, and that’s a better way to fight this problem, because it cuts across all industries.  But Congress isn’t listening, and thus he’s been clear and strong on this point: if Congress won’t help, I’ll do what I can through EOs.

So here’s the EO that we need to see, and the sooner the better: procurement officers—the folks who decide which firms get the bid—should be able to factor job quality into their decision.  It’s that simple.  By law, they have to take the lowest bid, but that rule is of course conditional on the quality of the output, otherwise my kid could win the bid to build a bridge out of Legos.  Well, there’s good evidence that the quality of the work is a function of the wage, working conditions, commitments to training, workforce tenure, and such characteristics that we see in high-road versus low-road employers.

Simply allowing procurement officers to consider those characteristics when they’re deciding who gets the bid would improve the quality of work and the living standards of thousands of contracted workers.  The contractors and their lobbies won’t like it, but let’s be very clear: this is a mild intervention—it is not saying “we’ll give the bid to the firm that pays the most.”  It’s saying, all else equal, controlling for the bottom line (and thus protecting the taxpayer), we’ll give the bid to the better employer/producer.

I rarely bug the president directly, and I’m sorry to do so while he’s on vacation.  But sir, I believe you when you say you’ll work around our frozen Congress when you have to, as you have in the past.  This is an excellent time and a great cause to do so again.

Jared Bernstein

Jared Bernstein joined the Center on Budget and Policy Priorities in May 2011 as a Senior Fellow. From 2009 to 2011, Bernstein was the Chief Economist and Economic Adviser to Vice President Joe Biden. Follow his work via Twitter at @econjared and @centeronbudget.

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Congress Executive Order Federal Contractors Low-wage Workers Obama On The Economy