Friday, February 26, 2010

Federal Contractors and Wages and Benefits

White houseAccording to an article by Steven Greenhouse in today's New York Times, the Obama Administration plans to use federal procurement policy to promote better wages and benefits for workers, as well as better environmental policies. From the article,

By altering how it awards $500 billion in contracts each year, the government would disqualify more companies with labor, environmental or other violations and give an edge to companies that offer better levels of pay, health coverage, pensions and other benefits, the officials said.

Because nearly one in four workers is employed by companies that have contracts with the federal government, administration officials see the plan as a way to shape social policy and lift more families into the middle class.

The article reports that Republican lawmakers see this as a gift to organized labor and object that it would drive up federal costs, disproportionately weed out small busineses, and be too hard to apply.

It doesn't seem much different to me than the welfare reform policies of the 90s. By using work as the way to get more dollars into people's pockets and better safety-net-type benefits, the burden on other parts of the federal budget (Medicare etc.) would be less. That sounds like good economic policy. Getting the most for your money does not necessarily mean buying the thing with the lowest up-front pricetag. This seems to get at more of the costs that work, production, or simply life may entail, but may be hidden by the system, costs like health and safety. And we're not even talking about wholesale regulation of the private sector, using private employment generally to reach these goals. Federal contracting is really only one step away from the federal workplace itself.


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Contracts are supposed to awarded based on cost to the taxpayer, technical merit, and past performance. This is just another proposed taxpayer ripoff which would increase costs by 20 per cent, circumvent Congress, and operate as a special interest sweetheart deal. Ironic how these BigLabor anti-business organizations just love to corner the market and eliminate competition via Davis Bacon, state prevailing wage statutes, forced unionism, and this. The taxpayer gets stuck with the tab.

Posted by: joe marino | Mar 1, 2010 7:49:47 AM

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