State and local governments finance millions of jobs across our economy with the hundreds of billions of dollars that they spend each year to purchase goods and services. Yet jobs created through government contracting are often substandard, paying very low wages and involving poor working conditions where workplace law violations are common. Such jobs hurt not only the workers, but they also undermine the quality of goods and services that are delivered to government agencies and the public. This often results in significant hidden costs for taxpayers.
Scores of state and local governments have taken an important step to raise standards for workers by requiring that public contractors pay their workforces a nonpoverty wage—either through living wage laws or prevailing wage laws. These laws have a significant impact on the lives of workers who are employed by contractors, they uphold government’s promise to function as a model employer, and they help raise wage standards throughout the local economy.
But state and local leaders can do more to raise standards for government-supported work. Growing numbers of state and local governments are adopting additional “responsible contracting” reforms to improve the quality of jobs generated by their procurement spending—a suite of policies to help raise the wages and improve the benefits of workers who are employed by contractors; to ensure that only law-abiding companies that respect their workers receive government contracts; and to contract out only those services that public employees cannot capably and cost-effectively perform.The above excerpt was originally published in Center for American Progress Action Fund.