Long a punch line, the idea that the government can step in and improve lives has its deep seated detractors. But the Obama administration is discussing using the federal government’s massive economic power to change the way workers are treated. According to a New York Times article, one in four workers is employed by a company with a federal contract.
One in four workers translates into more than a quarter of American families affected, since so many families have two wage-earners. The administration intends to scrutinize the procurement process, and favor companies with good records on labor and the environment, and those with good wage structures. Naturally this potential executive order has drawn fire. Critics contend that the cost of government contracts will increase, that union shops will be favored, and that many companies will drop out of contention. The article points out a Maryland study, however, that shows the opposite. When Maryland required contractors to pay a living wage (higher than minimum wage), morecontractors placed bids. “Some higher-wage companies said they began seeking government bids because the new policy leveled the playing field.” In addition, the drain on government resources by the working poor would decrease. Moreover, some evidence indicates that the lowest paying contractors do not produce the same quality work as the companies that pay higher wages and provide employee benefits. No executive order has issued yet, and critics questioned whether legislation would be necessary to change the procurement process. The ramifications could be significant, however, in reversing the rising gap between the most and least affluent in this country.