On May 21, I had the opportunity to testify before a Congressional Progressive Caucus meeting on how federal dollars drive inequality by paying contractors who pay too many of their workers too little. The hearing was driven by a study from Amy Traub and her colleagues at Demos, a New York based think tank, that issued a report exposing the many ways that federal contracting often adds to the burden of the low income, especially those who earn less than $12 an hour, or less than $25,000 a year.
If these workers have even one child, they are living at or below the poverty line. As summer looms, we know that children who are in summer programs will be better prepared when they return to school in the fall. Yet those with income limitations will find it difficult to pay fees that range from $50 to $125 a week for summer enrichment programs. This cycle of disadvantage means that low wages yield more limited opportunities for students who, but for their parental situation, might be exposed to the kind of opportunities that would make them more competitive for college admissions. Their limited wages create a cycle of disadvantage for children. [...]
[A]ccording to Demos, we have millions of workers who work full time, but are paid at low wages, thanks to federal contracting policy. If government takes the lowest bid to provide services, workers will likely earn the lowest wage. If our government specified that a living wage and benefits are part of the contract we would reduce inequality. Today, too many contracting executives earn six or seven figure salaries, while workers earn poverty-level wages.