Report: Some Workers Paid Twice As Much on Federal Contracts
A Washington Examiner report found that some workers with federal contracts make twice what others doing the same work in the same region make.
Luke Rosiak, of the Washington Examiner, went “On The Record” to discuss his report. He reported that laws mandate that the government pays federal contractors a minimum hourly wage determined to be “prevailing” in the area. However, those prevailing wages are often off the mark and dramatically increase the cost to taxpayers.
“It’s so esoteric, some of the categories, that somewhere in Washington, someone is deigning to decide […] in this complicated economy that we have, what everyone should make,” he told Greta Van Susteren.
Read more below, via the Washington Examiner:
The law directs the government to keep hourly rates in line with the regional typical rate to ensure the government’s buying power doesn’t drive down average wages.
But instead, it often has the opposite effect, creating two tiers of workers with comparable skills: Those making the free-market rate and those who are far better compensated and whose salary comes indirectly from Uncle Sam.
Washington-based bureaucrats “rely on professional judgment when calculating wage rates,” as the Government Accountability Office put it, to assemble what the Examiner found were more than 132,000 different regularly updated dollar figures, decreeing what workers should make in each of 339 occupations across 390 regions.
The bureaucrats use BLS rates as one metric, but then adjust them for various factors, even as they make assumptions to fill in information gaps.
For example, if they don't know what one profession is, they'll apply the rate of another that sounds similar. But they do “not include a description of the methodology used to derive the wage rates.”
Those are some of the reasons why in Buffalo, N.Y., those who repair and change tires without a government contract are paid a median hourly wage of $8.98, whereas those contracted by a government entity for the same job earn $18.78.
Read the full report here. Watch Rosiak’s interview above.