For weeks, I’ve been writing that the movement to increase the minimum wage near you. Next week, however, that movement will arrive in my own back yard. Low-wage workers organized by Good Jobs Nation are coming to Washington, DC to rally for living wages, on Tuesday, May 21st, at 12:00pm, at Columbus Circle, in front of Union Station.
But this protest isn’t targeting fast food restaurants like McDonald’s or Burger King or retail shops like TJMaxx. On Tuesday, low-wage workers will take their demands to the biggest low-wage job creator in the country — the one funded by taxpayers like you and me: the federal government.
Early this month, a study by Demos, “Underwriting Bad Jobs: How Our Tax Dollars Are Funding Low-Wage Work and Fueling Inequality,” revealed that the federal government revealed that millions of low wage workers employed by private businesses, who serve the federal government in a variety of ways, can’t afford basic necessities like health care, food and housing, because they’re paid such low wages.
We find that nearly two million private sector employees working on behalf of America earn wages too low to support a family, making $12 or less per hour. This is more than the number of low-wage workers at Walmart and McDonalds combined.1 Yet, if anything, this figure underestimates the total number of poorly-paid workers funded by our tax dollars. Our analysis encompasses U.S. workers employed by government contractors, paid by federal health care spending, supported by Small Business Administration loans, working on federal construction grants, and maintaining buildings leased by the federal government. This encompasses the largest share of poorly-paid workers funded by our taxes. However, other streams of funding have yet to be analyzed. For example, loans and subsidies from the Department of Agriculture fund giant agribusinesses that employ more than a million farm workers, while grants from the Department of Education fund low-wage assistant teachers, bus monitors and cooks in Head Start and other programs. Due to lack of data, retail and food service workers for concessionaires of the National Parks Service and other federal agencies also fall outside our analysis.
These are employees working on behalf of America, doing jobs that we have decided are worthy of public funding—yet they’re being treated in a very un-American way. Our nation has a history of ensuring our tax dollars provide decent jobs. From the 1931 Davis-Bacon Act to Executive Order 11246 of 1965, and a host of other laws and executive actions, our laws have mandated that companies working on behalf of the American people are upholding high standards of employment practices. Yet as the nature and prevalence of federal contracting, lending and grant-making have changed, and some laws have been weakened, working people have fallen through the cracks.
When our tax dollars underwrite bad jobs, the economy as a whole is weakened and all of us are negatively affected. There is a ripple effect as low-paid workers and their families have little money to spend, hindering economic growth that could be creating more jobs. Poorly-paid workers also contribute less in taxes and are more likely to rely on public benefits to care for their families. In contrast, we would all benefit from an economy where workers earn good wages—and we have a special responsibility to see that the people working on behalf of our nation are paid and treated fairly. Raising standards for people working on behalf of America is one important piece to providing opportunities for workers to reach the middle class.
At a press conference announcing the launch of Good Jobs Nation earlier this month, workers bore witness to the “ripple effect” federally-funded low-wage jobs.
- Lucilia Ramirez, who has cleaned Union Station for 21 years spoke of making $8.75 an hour, with no benefits. Struggling to pay their mortgage on her small salary, Ramirez and her husband were forced to rent out bedrooms to strangers just to keep a roof over their heads.
- Katina Washington, who earns $9.65 an hour cleaning offices rented by the Department of Justice, lives with her cousin because she can’t afford her own apartment, and has to rely on food stamps to help with groceries.
- Nelly Garcia, 55, works at the Old Post Office Building, for a company that makes lots of money from federal contracts. But Garcia only earns $9.00 an hour, which isn’t enough to afford food or pay for the subway commute to work. A cancer survivor, Garcia has no health benefits, and must rely on Medicaid as a result.
These are just a few of the voices of the over 4 million low-wage workers employed by private companies on behalf of the federal government. Many of them can’t afford basic essentials like food, shelter, and medical care. Some 30 percent of them actually make less than minimum wage. Forty percent must depend on food stamps, Medicaid, and other public assistance to survive. Sixty-five percent of them struggle to pay for things like rent, utilities, and food.
If, like me, you live and/or work in the Washington area, you probably walk past these workers every day. We smile, and say “Hello,” “Good morning,” or “Good night.” We live and work in a place that is one of the biggest examples of economic inequality, in an “recovery” where most of the new jobs created are low-wage jobs. Seven of the ten wealthiest zip codes in the country are in the Washington, DC area, yet DC would have the third highest poverty rate in the country — if DC counted as a state. Federal benchmark compensation for CEO Reimbursement for work on a federal contract is about $760,000.00, but the lowest compensation reported by workers on federal contracts is $6.50 an hour.
Hundreds of billions of taxpayer dollars in federal contracts, loans, and leases go to corporations that pocket billions and pay their CEOs millions in bonuses, but pay such low wages that workers can’t afford food and shelter. Taxpayer dollars go to corporations that pay their employees so little that many of them have to rely on public assistance.
Like I said yesterday, when an employer pays workers so little that workers have to rely on public assistance, is should count as “corporate welfare.” Big, profitable contractors are forcing taxpayers to subsidize their unlivable wages. These companies are receiving funding from the federal government, but they are further burdening taxpayers by leaving their employees to rely on food stamps and other public assistance programs instead of paying them a living wage.
This has to stop. That’s why federally funded low-wage workers are joining together for a living wage and a voice on the job. The federal government has a responsibility to ensure taxpayer-funded contracts help the economy by paying workers enough to afford the basics like rent and food and to put money back into their local economies.
Next week, Washingtonians have a chance to stand with low wage workers, instead of just passing by them every day on our way to or from our homes, condos, and apartments in and around Washington, DC. More than ever, Americans need good jobs, with liveable wages, and real benefits. Maybe the place to start is right in our own back yards.