What a disappointment that Congress left town without doing much about the joblessness that hangs over our country like a toxic cloud.
However, there is plenty the administration can still do about rewarding companies that create good American jobs – and punishing those that don’t.
The answer lies in one unglamorous word: procurement.
Like it or not, the U.S. government spends about $500 billion a yearon goods and services from private businesses. Only in countries like Somalia does the government not have a major role in the national economy.
As economist Bob Kuttnerpoints out, federal procurement directly or indirectly influences one job in four in the economy.
Kuttner, in the October issue of the American Prospect, notes that the federal government gives business to companies that systemically violate labor law and decent standards. The federal government sometimes awards lucrative contracts to companies that batter down wages.
My boss, Jim Hoffa, Jim Hoffa, points out that the federal government does business with companies that move their headquarters overseas to avoid paying U.S. taxes, or move their factories overseas to avoid paying U.S. wages.
There never should have been a controversy over the U.S. Air Force awarding a contract to Airbus, the European aerospace company. The U.S. Navy shouldn't be granting contracts to companies like Accenture, which moved its headquarters to Ireland to avoid paying U.S. taxes.
Nor does the U.S. government have any business awarding billions of dollars in contracts to companies like Dell Computer. Dell, the federal government's 11th biggest prime contractor, will shut its last major U.S. plant in North Carolina next year and transfer the work overseas.
Just last week, the http://www.gao.gov/...reported that 20 federal contractors received half of the 50 biggest fines levied by the Labor Department’s Wage and Hour Division between the 2005 and 2009 budget years.
According to Federal Computer Week,
...in fiscal 2009, the government awarded those 20 companies more than $9 billion in contracts. None were suspended or debarred as a result of their actions.
It didn’t used to be this way. Kuttner writes:
In the past, government has taken seriously its power as purchaser to improve labor conditions. In the Kennedy and Johnson eras, before Congress passed the landmark civil-rights laws, executive orders beginning in 1961 required companies bidding on government contracts to take "affirmative action" to overturn legacies of racial discrimination and exclusion in hiring and promotion. Affirmative-action plans were required not just on the contract in question but company-wide. Companies that refused to cooperate were barred from doing business with the government. During World War II, the Roosevelt administration required companies engaged in war production to pay prevailing wages and not to interfere with the right of their workers to organize unions.
Things sure have changed. The American Prospect describes how FedEx, a notorious union-buster that routinely misclassifies employees, received $1.5 billion in Defense Department contracts last year. Another union buster, U.S. Foodservice, received $2 billion in military contracts over the past decade.
And here’s a shocker:
Under George W. Bush, as government privatized more functions, federal contracting increased by about half, according to the Economic Policy Institute. The EPI also estimates that nearly one-fifth of federal contracted workers did not earn enough to raise a family of four above the poverty line.
Change to Win, the Center for American Progress and the National Employment Law Project have proposed the administration should embark on a strategy of "high road procurement." And Hoffa has tirelessly advocated for for a more robust "Buy America" policy.
Business groups predictably scream "protectionism." They are, of course, led by the U.S. Chamber of Commerce, which represents multinationals that earn huge profits by sending jobs overseas.
But as Paul Krugman says,
...if you just start yelling "Protectionist!", you’re demonstrating that you don’t understand what economics is about.