NY Times today
The reasoning is:The Obama administration is planning to use the government’s enormous buying power to prod private companies to improve wages and benefits for millions of workers,
By altering how it awards $500 billion in contracts each year, the government would disqualify more companies with labor, environmental or other violations and give an edge to companies that offer better levels of pay, health coverage, pensions and other benefits, the officials said.
Because nearly one in four workers is employed by companies that have contracts with the federal government, administration officials see the plan as a way to shape social policy and lift more families into the middle class. It would affect contracts like those awarded to make Army uniforms, clean federal buildings and mow lawns at military bases.
Although the details are still being worked out, the outline of the plan is drawing fierce opposition from business groups and Republican lawmakers. They see it as a gift to organized labor and say it would drive up costs for the government in the face of a $1.3 trillion budget deficit.
Critics also said the policy would put small businesses, many of which do not provide rich benefits, at a disadvantage. Furthermore, government officials would find it difficult to evaluate bidders using the new criteria and to determine whether one company’s compensation package should give it an edge, said Alan L. Chvotkin, executive vice president of the Professional Services Council, a coalition of 340 government contractors.
Many low-wage employees of federal contractors receive Medicaid and food stamps, he said. Citing studies conducted by the Department of Housing and Urban Development and by academic researchers, he said that contractors that pay their employees well have greater productivity and reliability, while contractors with a record of labor law violations do shoddier construction work.
“This policy is good for workers, it’s good for taxpayers and it’s good for high-road businesses,” Mr. Madland said.One federal official said the proposed policy would encourage procurement officers to favor companies with better compensation packages only if choosing them did not add substantially to contract costs. As an example, he said, if two companies each bid $10 million for a contract, and one had considerably better wages and pensions than the other, that company would be favored.I'm probably being dense, but it seems to me that a cafeteria worker, if not trained or capable of doing more than this work, might not be worth $20/hour. So, if one employer pays $10/hr and another pays $20/hr, the higher-wage contractor would be favored.Some supporters of the new procurement policy — and even some opponents — say Mr. Obama could impose it through executive order. They assert that the president has broad powers to issue procurement regulations, just as President John Kennedy did in requiring federal contractors to have companywide equal employment opportunity plans.
But some opponents argue that legislation would be needed because an executive order may collide with laws that require federal contractors to pay the prevailing regional wage for the type of work being done. The executive order, they fear, would call for higher wages.
Truthfully, I know secretarial staff (which today requires quite a high level of proficiency not required even a decade ago), would be very happy to get paid $40,000/year. And many of them don't get paid that much. I'd easily trade a secretarial job for being a cafeteria worker if the pay was $40,000/yr for the latter.
I suspect that there will always be a need for cafeteria workers or people who mow lawns, but how much are those services worth in an economic sense? Can they be equated with other jobs that require more education/training?