The bar is being raised for contractors receiving money from the federal government.
President Obama recently gave hundreds of thousands of American workers who do federal taxpayer-funded work under private contractors a boost by issuing an Executive Order raising their minimum wages to $10.10. An analysis by the nonpartisan Congressional Budget Office (CBO) found that raising the wage floor for federal contractors will have immediate, far-reaching effects: moving about 900,000 Americans above the poverty line and increasing real income for workers below the poverty threshold by $5 billion.
Other reforms to how our government contracts out public work could help still more private sector workers and their communities. A momentous opportunity lies within America’s transportation sector, because city, municipal, and regional public transit agencies also use billions of dollars in federal funding from the U.S. Department of Transportation and other sources, and collectively spend about $5.4 billion each year to buy new buses and rail cars from private manufacturing companies.
There are ways for the federal government to leverage these purchases for good manufacturing jobs that pay a living wage and offer a career ladder to American workers. For example, Amtrak, the federally funded railroad transportation company, recently communicated a strong set of job quality priorities by asking private contractors bidding to build new high-speed trains to detail their plans for how many U.S. jobs they would create, the levels at which those workers would be compensated, what kind of training they would get, and how the companies would ensure those jobs were open to diverse groups of workers. As part of its procurement of high-speed rail cars, Amtrak will evaluate the bids –expected from huge global firms like Siemens, Bombardier, and Kawasaki -- based on the strength of their workforce development and jobs plans.
University of Massachusetts economists estimate that expanding this kind of intentional purchasing in the transit sector could create tens of thousands of quality American jobs. The Obama Administration ought to require all local public transit agencies who qualify as federal contractors to adopt procurement policies like “Jobs to Move America,” that create incentives for good jobs, U.S. factories, and opportunities for disadvantaged American workers like veterans.
Raising the wage floor is a good beginning to ensure that publicly contracted jobs mean quality work for taxpayers and workers alike. There are numerous state- and local-level models of how the power of the public purse can create incentives for better working conditions and good-paying jobs throughout the country. The example set by the Amtrak proposal could be the next step in guaranteeing that federal dollars that end up in transit contractors’ hands result in good jobs rebuilding our nation’s infrastructure and our communities.