Pastor Frederick Haynes & the Samuel DeWitt Proctor Conference Proudly Stand in Solidarity with Low-wage Workers.
The Samuel DeWitt Proctor Conference (SDPC) and Change to Win(CTW) Partner For Good Jobs Nation Campaign
UNDERWRITING BAD JOBS: HOW OUR TAX DOLLARS ARE FUNDING LOW-WAGE WORK AND FUELING INEQUALITY (Download)
Washington D.C.: A Microcosm for the Inequities of Federal Contracting
In 2011, 15 cents from every dollar in the federal procurement budget flowed through just one metropolitan area: Washington D.C. The Washington region, home to two percent of the nation’s population, was the destination for $80 billion in contracting spending, according to analysis by Stephen Fuller of George Mason University.i The region is therefore an ideal place to observe the dynamics of federal contracting and its influence on the larger economy.
The rise in economic inequality in the region has been stark: an analysis by Deborah Nelson and Himanshu Ojha at Reuters find that the top five percent of households in Washington, D.C. made more than $500,000 on average in 2011, while the bottom 20 percent earned less than $9,500 in the course of the year. The level of inequality has risen dramatically over the past twenty years and is wider than most other American cities.ii While contracting is far from the only factor contributing to the region’s growing income disparity, its impact is visible at all levels of the economy.
At the high end, many of the mostly highly compensated executives of firms headquartered in the Washington D.C. region lead companies with billions of dollars in federal contracts. Wesley Bush of Northrup Grumman, for example, was the D.C. area’s third highest-grossing CEO in 2011, pulling in $21 million in total compensation as his company profited from more than $9 billion in federal contracts. Robert Stephens of Lockheed Martin, Jay Johnson of General Dynamics, and Michael Laphen of Computer Sciences Corp are similarly among the top ten most highly-paid executives in Washington even as their firms are among the top ten largest federal contractors.iii The Washington Post notes that median pay for the region’s top executives soared 22 percent in 2011.iv
At the middle and low-end of the labor market, contracting and other forms of government outsourcing have also played a role in Washington. Stable jobs working directly for the federal government have increasingly been turned over to private contractors, who in some cases pay poverty-level wages or hire workers on only a temporary basis. A study by the Economic Policy Institute finds that the private sector is three times as likely to employ workers at poverty-level wages as the federal government, and that direct federal employees are far more likely to have employer-sponsored health or retirement plans.v While this dynamic exists throughout the country, it is magnified in the Washington, D.C. region, where both federal contractors and federal workers are concentrated. Increased outsourcing expands the gulf between those at the top and low-wage workers, fueled by our tax dollars.
Related articles
Jamye Wooten is the founder and publisher of KineticsLive.com ; a faith-rooted organizer that has documented social movements from across the United States, United Kingdom and Africa. He is the former program director of the Collective Banking Group, Inc. (CBG), a Christian ministry that draws together leaders from the faith, business, and public service sectors to develop and enhance economic empowerment strategies for the African American community.
