business news in context, analysis with attitude

by Kevin Coupe

Companies like Walmart and McDonald's get a lot of grief for employing low-wage employees, with the suggestion that they somehow are exploiting these workers.

Which is why this story from the Washington Post is so Eye-Opening ... because it indicates that there is another entity that employs a lot more low-wage employees: the federal government.

The writes that a report from a public policy organization Demos "estimates that taxpayer dollars fund nearly 2 million private-sector jobs that pay $24,000 a year — about $12 an hour — or less. Those workers owe their incomes to government contracts, Medicare and Medicaid spending, and federal infrastructure funds, among other public sources. In contrast, Demos estimates that about 1.4 million workers earn that amount or less at Wal-Mart and McDonald’s, which are two of the largest employers of low-wage workers.

"The findings highlight inequality within the government contracting industry; as chief executives of major contractors rake in millions, many contract employees are struggling to get by, according to the report from Demos, which advocates for worker-friendly policies. It is a situation that could be worsened by the budget pressures of sequestration, which is pushing the federal government to spend fewer dollars and pursue lower-priced contracts."

I find this interesting ... and I also think there will be a lot of folks out there who will say that they'd rather see this sort of report than one that says all these folks are being paid high wages with federal tax dollars.

BTW ... I saw a story the other day that said, in essence, that sequestration is forcing government agencies to be smarter and more innovative in how they spend their budgets. Now, I can see the arguments on both side of the sequestration issue, and the blanket nature of the mandate probably is forcing some unfortunate choices. But if it is forcing bureaucrats to be innovative and make smarter decisions ... well, that doesn't seem like a bad thing to me.
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