Norton to Introduce Letter to President at Hearing Today on Low Wages Facilitated by the Federal Government

WASHINGTON, DC – Congresswoman Eleanor Holmes Norton (D-DC) will ask members of Congress to sign onto a letter to President Obama at a hearing today, held by Democratic Leader Nancy Pelosi (D-CA), Democratic Whip Steny Hoyer (D-MD) and the Congressional Progressive Caucus (CPC), at 3:00 p.m. in 340 Cannon House Office Building, on the low wages paid by federal government contractors that result in millions of workers who are barely able to support themselves and whose low wages undermine the nation's economic prosperity. The letter, for which Norton is seeking co-signers, recommends that the president establish a working group of federal agencies to consider suggestions in the letter and others. The letter suggests an executive order requiring that contractors pay a living wage and also recommends that a decent wage count among the points agencies routinely use in competitions to determine recipients of federal contracts.

Although the federal government contracts for many goods and services that tolerate low wages, this letter focuses on mostly retail and janitorial workers in the nation's capital, as "the visible epicenter of federal collusion with vendors and contractors that pay low wages to their employees at federal sites," said Norton. These workers for federal contractors, who have visited members of the CPC, are actively demonstrating for better wages now and are representative of the mostly invisible federal contract workers across the country.

The letter says that low wages paid under federal contracts not only deprive workers but also pass on the cost of benefits for the working poor to federal taxpayers. The letter states, "The federal government cannot avoid responsibility when wages significantly below a living wage are paid to workers on federal premises or with federal funds….These workers perform tasks that would entitle them to decent wages if they were performing the same tasks directly for the federal government. Their employers benefit from the prestige, visibility and imprimatur afforded by their location in prominent federal sites. However, the federal government distances itself from these low-wage workers by outsourcing these jobs to private contractors. Although these contractors enjoy the prestige and get revenue at prime federal locations, the federal government washes its hands of these workers, leaving them with exploitative wages. Moreover, by condoning these low wages, the federal government often shifts onto federal taxpayers the cost of health insurance, food stamps, and other federal benefits for these workers that employers who offer decent wages generally shoulder."

The widespread selection by federal agencies of vendors and contractors that pay their employees low wages was documented in a recent Demos report, entitled Underwriting Bad Jobs: How our tax dollars are funding low-wage work and fuelling inequality, which was released at a CPC press conference and rally, where Representative Keith Ellison (D-MN), co-chair of the CPC, and Norton, a member of the CPC, spoke alongside low-wage workers for federal contractors.

The full text of Norton's letter follows.

Dear Mr. President:

Employees of private contractors located in federally owned buildings or with other federal concession contracts throughout the United States have visited members of the Congressional Progressive Caucus to report serious job-related and wage concerns. Many of these employees work at iconic federal sites, such as Union Station, the Smithsonian, the Ronald Reagan Building and the National Zoo. These workers report that they are paid so little that it is difficult to meet basic needs, that they work without benefits, and that they are sometimes required to work unpaid and unreported overtime, in violation of wage and hour laws. Some have begun working to organize unions, as protected by federal law, but some of the workers who have taken such steps have been fired.

The federal government cannot avoid responsibility when wages significantly below a living wage are paid to workers on federal premises or with federal funds. The widespread selection by federal agencies of vendors and contractors that pay their employees low wages was documented in a recent Demos report, entitled Underwriting Bad Jobs: How Our Tax Dollars Are Funding Low-Wage Work and Fuelling Inequality. A great variety of vendors and contractors that pay their employees low wages provide many kinds of goods and services to the federal government. However, the nation's capital, home of the nation's monumental tourist sites and buildings, is the visible epicenter of federal collusion with vendors and contractors that pay low wages to their employees at federal sites. Their workers are perhaps the highest profile among such workers because they work in retail or janitorial services in federal buildings in the nation's capital. These workers perform tasks that would entitle them to decent wages if they were performing the same tasks directly for the federal government. Their employers benefit from the prestige, visibility and imprimatur afforded by their location in prominent federal sites.

However, the federal government distances itself from these low-wage workers by outsourcing these jobs to private contractors. Although these contractors enjoy the prestige and get revenue at prime federal locations, the federal government washes its hands of these workers, leaving them with exploitative wages. Moreover, by condoning these low wages, the federal government often shifts onto federal taxpayers the cost of health insurance, food stamps, and other federal benefits for these workers that employers who offer decent wages generally shoulder.

In recognition of a lack of bargaining power, Congress took an affirmative step in 1939 to guarantee basic fairness to workers when it passed the Fair Labor Standards Act, the first minimum wage law. However, there is broad recognition that the minimum wage is not a living wage. In your State of the Union Speech, you recognized this problem and asked Congress to raise the minimum wage from $7.25 per hour, the equivalent of a $15,000 annual wage, to $9 by 2015. The current $7.25 minimum wage is lower than the minimum wage in 1968 when adjusted for inflation.

By organizing to expose federal government complicity with their low wages, these workers have stepped to the vanguard of today's controversy about the unprecedented income gap in our country, characterized by falling middle-class and low-income wages and rising income among the affluent and corporations. This gap cannot be addressed if our country continues to tolerate low wages. The place to start is with the federal government itself.

The federal government can set the needed example by using the tools available to it, including executive orders. Another option we recommend is use of the traditional point system that rates vendors, contractors and concessionaires that compete for federal contracts. Points are routinely given for various reasons connected to the contract. Points should be given to vendors and contractors that pay their employees a living wage without passing on additional costs to the federal government. Not only would these workers be afforded a decent wage, the federal government would likely see significant savings in benefits for these workers. In return, for example, vendors would get valued access to the captive customer base of tourists who come to federal sites in the nation's capital ready to spend money and who might not otherwise patronize the contractor if it was located in other parts of the city.

We ask that you establish a working group of federal agencies to consider these and other suggestions for extricating the federal government from funding low-wage jobs. It would not be the first time that the federal contracting power has been used as an incentive for the general welfare. For decades, for example, the federal government has monitored federal contractors to ensure that federal dollars do not fund discrimination. Now is the time to use federal contracting authority to encourage decent wages, remove federal subsidies for low wages and to conserve taxpayer funds.

Sincerely,

Published: May 21, 2013