Today is a great day for American workers.
President Obama will sign an executive order that in essence demands that companies clean up their acts and comply with labor laws if they are to receive federal contracts. Now they will have to disclose any past violations of wage and safety laws, and other worker protections such as the right to not be discriminated against because of race or gender, and companies with a track record of violating workplace laws will no longer receive the federal contracts they have come to expect.
To put this change in perspective: the United States federal government is the largest purchaser of goods and services in the world, spending $500 billion a year on government contracts. More than one in five workers are employed by a company that contracts with the federal government. Further, reforms that are initially limited to contractors – such as when President Johnson signed an executive order banning gender and racial discrimination – often later expand to the broader workplace.
In short, the executive order that will be signed today will have a significant impact on the lives of American workers.
Unfortunately, our current system for reviewing a contractor’s history of workplace safety and wage violations is inadequate and has allowed those with poor records to continue to receive government contracts. In fact, according to a recent report by Sen. Tom Harkin (D-IA), companies that currently receive government contracts comprise one-third of the top offenders of workplace safety and wage laws. From 2007 to 2012, wage theft by federal contractors amounted to $82 million in back wages for workers – hardly insignificant, especially for low-wage workers whose families are living on the brink. During the same five-year period, 42 workers employed by companies with government contracts died due to workplace safety violations. Responsible contracting reforms will put millions of dollars into workers pockets, reduce workplace discrimination, and increase safety.
This executive order will be good for America’s taxpayers. Contracting with companies that have egregious records of workplace violations – companies that are bad actors – frequently wastes taxpayer dollars and results in low-quality services to the government. According to a report by the Center for American Progress Action Fund, between 2005 and 2009, one-fourth of all government contractors that had the worst workplace safety records also had performance issues ranging from cost overruns to development delays to outright fraud.
This executive order will move the nation towards rewarding businesses that want to do right by their workers and taxpayers. Law-abiding businesses will celebrate this change. They will no longer be placed at a competitive disadvantage with companies that reduce costs by paying lower wages than those required by law and by cutting corners on workplace safety.
All too often, the federal government has contracted with companies based on their ability to provide low-cost services – no matter what they are doing in the workplace. President Obama’s action today will be a game changer – it will help ensure that companies follow the law, and that good companies are rewarded while bad actors are held accountable.
Perhaps most importantly, today’s action will improve the workplace as well as the pay for millions of workers who are struggling to get by – workers whose needs and rights have too often been on the periphery when it comes to awarding lucrative federal contracts.
With this executive order, those days are over, and that’s something worth celebrating.