Government Has More Low-Wage Earners Than Wal-Mart, McDonald's Combined

Image: Government Has More Low-Wage Earners Than Wal-Mart, McDonald's Combined

Wednesday, 08 May 2013 12:25 PM

By Sandy Fitzgerald

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A new study shows federal taxpayers' dollars are used to employ more than 2 million low-wage contracted workers nationally, more than Wal-Mart and McDonald's combined.

The consulting firm Demos said the private sector jobs, which pay $24,000 a year — or about $12 an hour — are for workers who get their income through publicly funded government contracts, Medicare and Medicaid spending, or federal infrastructure funds, reports The Washington Post.

About 1.2 million of the workers are either home healthcare aides or other healthcare workers whose wages depend on Medicare or Medicaid spending, the report said. Another 200,000 workers' salaries depend on money spent through Small Business Administration loans.

In addition, more than 500,000 of the low-wage earners are federal contract workers, who provide a variety of services, including cleaning federal buildings or serving food in national parks.

By comparison, about 1.4 million workers earn $12 an hour or less at Wal-Mart and McDonald's, the Demos report said.

The report was released ahead of an event to launch Good Jobs Nation, a group that aims to press the Obama administration to guarantee higher pay for federal contract workers.

"We know that growing inequality and these larger, dead-end jobs are a national problem," said Amy Traub, a senior policy analyst at Demos who wrote the report. “This is just a piece of that. But the key is, this is a piece that we’re responsible for and really that we can do something about."

Michael R. Strain, a labor economist for the conservative American Enterprise Institute, said the government should pay contractors enough to ensure quality work. But he said the market, and not the government, "should determine what is a fair wage."

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