AP > 'Living wage' could be factor in govt contracts

The Associated Press: 'Living wage' could be factor in govt contracts
By SAM HANANEL (AP) – Feb 26, 2010

WASHINGTON — The White House is looking at a new policy that would give an advantage in bidding on government contracts to companies that offer a "living wage" and generous benefits.

But business groups opposing the idea maintain it would shut out smaller businesses from competing for more than $500 billion a year in federal contracts and increase government procurement costs.

The policy is known as "high road" contracting and could draw the Obama administration into a larger debate over whether the government should use public purse strings to strengthen the middle class and promote higher labor standards.

Advocates of the plan include unions. They say too many jobs financed by government contracts come with low wages and limited benefits and support companies that violate employment laws.

The Economic Policy Institute, a liberal think tank, estimates that nearly 20 percent of the 2 million federal contract workers in the U.S. earn less than the poverty threshold wage of $9.91 per hour. As many as 22 million workers are employed by federal contractors...

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Posted by Chuck Bell at 10:10 AM