Federal Contract Workers Are Demanding a Big Raise. But Will They Get It?

Good Jobs Nation

Just outside the U.S. Capitol on Wednesday, hundreds of workers wearing blue shirts that said "Strike!" rallied for more pay. Leaders led chants in English and Spanish, from "Hey, hey, ho, ho, $10.10 is way too low," to "¿Que queremos? Quince y un unión."

These workers were striking for a day against companies contracted by the federal government to ring up powerful politicians’ lunch orders in the Senate, clean offices in the Pentagon, and cook food at the Smithsonian museums.

As the Fight for $15 has gained traction across the United States, workers—supported by a coalition of unions, labor advocates, and politicians—are saying that it’s time for the federal government to become a model employer. A cadre of progressive politicians, including Senator Bernie Sanders, also used the event to introduce legislation that calls for a national $15 minimum wage. But with legislative success along those lines unlikely, advocates are calling on President Obama to take action—through a “Model Employer Executive Order”— that would set a base pay for federal contract workers at $15, bolster benefits, and make it easier to form a union.

This would mean a big raise for workers like Sontia Bailey and Charles Gladden. Speaking at the rally on Wednesday, Bailey explained how despite working full-time as a cashier at a café in the U.S. Capitol, she also had to take a second job at KFC. She works 70 hours a week, Monday through Sunday. Three weeks ago, she had a miscarriage. But with bills to pay, she didn’t even have a chance to grieve before returning to work.

Charles Gladden has a food-service job in the Dirksen Senate Office Building. Yet, for months he had been sleeping outside the McPherson Square metro station because he couldn’t afford rent. In April, the Washington Post ran an op-ed telling Gladden’s story and bringing the perilous plight of impoverished federal contract workers into the national discourse.

In 2014, Obama bumped minimum pay up to $10.10 for federal contract workers. Then in recognition of the fact that federal contractors comprise 30 percent of wage and safety violators, he later issued an order that upped the scrutiny federal contractors must face for working condition standards.

Now, advocates say, it’s time for the president to finish the job.

“Workers are standing up all over the country asking for fair treatment and living wages,” says Paco Fabian, spokesperson for Good Jobs Nation, a federal contract worker campaign supported by the Change to Win Federation. “We hope the White House and the president take action for the workers that they can directly help.”

The size of the federal contract workforce has exploded to two million over the last 15 years—and it is a big business. In 2012, federal agencies doled out more than $500 million on contracted products and services.

The way that the current federal procurement system works is that the lowest bidder almost always gets the contract—and low bids are usually indicative of low wages. This process has essentially turned the federal government, not Walmart or McDonald’s, into the largest creator of low-wage jobs. And these jobs are largely going to already disadvantaged people—more than 70 percent of federal contract workers are women; more than 45 percent are of color.

While current contract wage laws mandate that many federal service and construction contracts meet a certain prevailing wage—policies that ensure more than 5,000 D.C. workers are paid a living wage—there are many contract workers who are left unprotected by existing standards. 

Good Jobs Nation

The living wage for a family of four in Washington, D.C. is $20 an hour, according to the MIT Living Wage Calculator. Nearly 30 percent—24,500—of federal contract jobs don’t reach that threshold, according to a report from Good Jobs Nation that dubs the federal government “The Capitol of Inequality.” Roughly 90 percent of cleaning, maintenance, and building and grounds federal contract jobs and 85 percent of food service work pays less than the living wage in the District.

An Action with Political History

There’s a rather long history of political pressure on the Obama administration to use executive action as a way to make the federal contracting system a wage leader—and more broadly, representative of the progressive agenda.

For years, the Change to Win labor coalition has been on the forefront of the push to increase labor standards for federal contract work. The issue of low wage workers contracted by the government was first illuminated back in 2000 by the Economic Policy Institute, with a study that showed more than 10 percent of federal contract workers made less than a living wage. Such research that exposed the severity of the issue coupled with an intense pressure campaign from Change to Win is largely credited with prodding Obama to raise the minimum federal contractor wage to $10.10 an hour.

Such an order—then dubbed the High Road Procurement Policy—was reportedly being considered by the administration back in 2010 and even reached Obama’s desk. As Steven Greenhouse reported then for the New York Times, a number of political allies, including Clinton-era Chief of Staff John Podesta and then-SEIU President Andy Stern, were pushing the president to sign such an order.

“We have a president who is talking about bringing more people into the middle class,” Stern told the New York Times then. “The government should expect contractors to obey the law, and at the same time contractors should not be building a poverty economy, but should be trying to build a high-road economy.”

Jared Bernstein, who was chief economist for Vice President Joe Biden and a member of President Obama’s economic team at the time, was advocating for such an executive order from within the administration. One of the first projects for the Middle Class Task Force, which was launched right at the beginning of 2009, was to use the federal procurement process as a lever for raising wages and benefits—thus expanding access to the middle class.

“There were a number of influential stakeholders that were pushing for this from the very beginning of the administration,” Bernstein told The American Prospect in an interview.

There was a considerable amount of legal consideration in regards to how the order would interact with procurement law, which is meant to protect taxpayer money. 

Ultimately, the order reached the president’s desk but was never signed. That surprised a lot of the action’s supporters, since it seemed to have gained considerable traction in the White House.

“We [were] juggling a ton of balls in the air back then and there were a lot of legal traps to consider when getting into procurement law,” says Bernstein, who is now a senior fellow at the Center on Budget and Policy Priorities. He contends that the legal hurdles were too much at the time: “I don’t think it was so much [an] ideological message as much as we wanted to make sure the executive order was legally bulletproof before it went live.”

Christy Hoffman, who was heavily involved in lobbying for the proposal on behalf of SEIU, attributes the order’s failure more to the political landscape then. “Government contractors carry a big stick in Washington, D.C., and the High Road proposal generated heavy opposition,” she told me in an e-mail. “I don't believe that President Obama was convinced in 2010 that the benefit of High Road would outweigh the pain.”

Hoffman contends that wage campaigns like the Fight for $15 have inherently changed the political conversation in a way that would make an executive action on this much easier for Obama now. "It's impossible to ignore the crisis of low wages and the gutting of the middle class in America. Changes in procurement rules in order to favor good employers and exclude the bad apples are now more difficult to attack as an abuse of executive power." 

While the original High Road Procurement Policy never made it, the president has arguably revived it in a piecemeal fashion with subsequent executive actions—the minimum wage hike to $10.10 and the increased scrutiny of labor violations in the procurement process.

Advocates like Change to Win commend him for this action, but are trying to compel Obama to go further, especially now that he’s in what has proven to be a highly active lame duck period. Still, the likelihood of Obama signing such an ambitious order now, just a little over a year after he used his executive power to raise federal contract wages to $10.10, appears to be an uphill battle.  


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