Our federal government is one of the largest employers of low wage workers – men and women making minimum wage or less in government buildings, working in food service, custodial work, security, administrative positions, and transportation. The federal government is giving millions of dollars to CEOs to subsidize this contract work, yet millions of workers are receiving low wages and few benefits.

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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.

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Federally Contracted Low-Wage Workers to Launch “Good Jobs Nation” Campaign for Living Wage and Voice on the Job

DEMOS to Release Report Detailing Low-Wage Jobs Resulting from Federal Government Contracts, Loans, and Leases

Washington – On Wednesday, May 8 at 9 a.m. EST, low-wage workers from around the country employed in a variety of firms operating under federal contracts, loans, and leases will join Members of Congress, community leaders, and local elected officials to announce the launch of Good Jobs Nation—a new organization of low-wage workers joining together for a living wage and a voice on the job. These low-wage workers employed by private businesses serve the American public by working in the food courts at government buildings like Union Station and the Ronald Reagan Building, greeting visitors and selling memorabilia at the Smithsonian Museums, driving trucks hauling federally-owned loads, and making military uniforms for our troops. The new organizing effort comes just weeks after strikes in New York City and Chicago by low-wage workers at major fast food and retail chains including Macy’s and McDonalds.

Hundreds of billions of dollars in federal contracts, grants, loans, concession agreements, and property leases go to large, profitable corporations that pay their CEOs millions in salaries and bonuses but pay their workers such low wages that they are unable to afford basic necessities like food, clothing and rent. Instead of strengthening our economy, taxpayer dollars are being used to pad corporate profits and bonuses, while leaving workers unable to shop at local businesses and reliant on public assistance to provide for their families. Raising pay for these workers would lift our entire economy by putting more money in the pockets of working families.

At the event, a Demos researcher will discuss the findings of their new report, Underwriting Bad Jobs: How Our Tax Dollars Are Funding Low-Wage Work and Fueling Inequality which reveals the number of low-wage jobs supported by federal government contracts, loans, and leases. The Demos report is the first of its kind detailing how federal contracts and other arrangements are contributing to poverty living standards, undermining economic growth. Demos is a public policy organization working for an America where we all have an equal say in our democracy and an equal chance in our economy. The report is part of Demos’ on-going work creating pathways to ensure a strong and diverse middle class.

In response, congressional leaders, including Rep. Keith Ellison (DFL-MN) and Rep. Raul Grijalva (D-AZ), will announce steps to investigate the federal government’s role in promoting low-wage jobs.

WHO:                 

 Federally funded low-wage workers

 Pastor Frederick Haynes, Samuel DeWitt Proctor Conference Chair

Our DC Community Organization

Rep. Keith Ellison (DFL-MN)

Rep. Raul Grijalva (D-AZ)

Rep. Eleanor Holmes Norton (D-DC)

Rep. Barbara Lee (D-CA)

Rep. Jan Schakowsky (D-IL)

Amy Traub, DEMOS

Rev. Michael Livingston, Interfaith Worker Justice

WHAT:                 Launch of “Good Jobs Nation” Campaign

WHERE:               Columbus Club (East Hall), Union Station

WHEN:                 Wednesday, May 8 at 9 a.m. EST