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The Economic Power of Obama's Pen
Los Angeles Times
Christopher Edley Jr.

July 6, 2010
View the Original Article


With the stroke of a pen, President Obama could do more for the economy than the second stimulus measure that's going nowhere fast. He can create the good jobs our economy needs by using the power of federal contracting to reward employers that improve job standards. An executive order to encourage federal contractors to provide their workers with, among other things, a living wage, would require no legislation, no battle in Congress.

Unemployment is stuck near the double-digit mark, but that average blurs the patchwork crisis facing workers. Washington plays the partisan fiddle, as the nation urgently needs to create more good jobs. It is likely that a large part of the private-sector job growth in this limping recovery will be in industries that pay low wages. But wages at the bottom are stagnant, and millions of workers are exploited by companies that cheat on paying the minimum wage and other basic protections.

From Lyndon Johnson's executive order banning racial and gender discrimination, to Richard Nixon's affirmative action goals and timetables, to Jimmy Carter's anti-inflation controls, presidents have long asked federal contractors to lead the nation by example with model business practices. These executive orders have led to positive results for the taxpayers and the nation as a whole.

Federal purchases, such as military uniforms and janitorial services, total a staggering half a trillion dollars a year. But of the resulting millions of jobs, too many pay poverty wages. An estimated 1 in 5 federally contracted workers earns less than the poverty level for a family of four, according to a 2009 analysis from the Economic Policy Institute.

There's more. Why, despite years of scandals about contractor fraud and misconduct, do we continue awarding lucrative, taxpayer-funded contracts to scofflaw companies that violate core labor protections? BP is a case in point. BP received the largest penalty in OSHA history for failing to remedy safety violations that led to a fire and explosion, killing 15 workers at a Texas refinery in 2005. Yet it continues to receive lucrative federal military contracts (totaling $838 million just this year). In another example, a 2004 Labor Department study found 20,347 cases of employers with federal contracts failing to pay their workers even the minimum wages and benefits required under their contracts.