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Contracting out US government work: not a model employer

With little oversight, workers treated poorly, taxpayers ripped off.

Contracting out US government work: not a model employerby David Madland, Michael Paarlberg, Center for American Progress Action Fund

December 8, 2008 — The federal government is failing to live up to its legal and moral obligations as a model employer. Through numerous laws and executive orders, Congress and the executive branch have expressed a clear and long-standing objective to set and enforce high standards for the treatment of contracted workers. The federal government, however, is falling far short of this goal. Instead of helping to create quality jobs, all too often the federal government contracts with companies that pay very low wages and treat their workers poorly.

For taxpayers, shortchanging federal contract workers is often penny wise but pound foolish. Without decent wages, benefits, and working conditions, work quality can sometimes suffer due to high turnover, inadequate training and experience, and low morale. And when contract workers are poorly compensated, taxpayers often bear additional costs, such as for Medicaid and food stamps, in effect subsidizing low-road companies. But when contracted workers have quality jobs, taxpayers often receive quality work and law-abiding companies are able to compete on a level playing field. Moreover, like the canary-in-the-coal-mine warning of problems, contracted workers being treated poorly can be a sign that taxpayers are being hurt as well.

Due to massive increases in federal contracting coupled with inadequate oversight, the twin problems of contractors treating their workers poorly and ripping off taxpayers have grown in importance. While people may be aware that some federal contractors are excessively compensated and waste taxpayers' money, the problems of the contracted workforce, and how they are connected to taxpayers' interests, have largely remained hidden from public view.

The government's lack of knowledge about the contracted workforce is shocking and unacceptable. Information about contractors — and especially their subcontractors — is veiled behind layers of lax oversight, inadequate record keeping, and unnecessary secrecy.

This report attempts to pierce this veil by providing one of the first examinations of the federally contracted workforce. As the report makes clear, too many companies that receive federal contracts treat their workers poorly and fail to pay adequate wages or benefits. Among the report's key findings:

— Low quality jobs are a widespread problem. An estimated 80 percent of the 5.4 million federally contracted service workers are low-wage earners. Contracted workers are often excluded from prevailing-wage law protections and, for many jobs, the minimum prevailing wage allowed is below a living wage. And contractors often violate labor laws. . .

To read further. . .

The Center for American Progress Action Fund is a progressive think-tank dedicated to improving the lives of Americans through ideas and action.

Links and sources
  Making Contracting Work for the United States, by David Madland, Michael Paarlberg, The Center for American Progress Action Fund, December 8, 2008
  Read the full report (pdf)

Posted: December 12, 2008

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