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We are heartened that OMB and other executive departments and agencies are attempting to identify how they could better advance equity and support underserved communities. The federal government played a role in creating and perpetuating structural inequities, and it should work towards ending them. Many of the social programs and laws that we associate with benefiting working people–
Unions and collective bargaining serve as a counterbalance to economic oppression
Work is a channel through which existing social inequities reinforce themselves. Much of the work our members do–providing childcare, cleaning buildings, driving buses, working in laundries and more–has historically been underpaid and undervalued simply because it’s work predominantly done by people of color and women.
Unions give working people the collective power to negotiate for a fairer share of the profits our work produces. Over the past 140 years, the successful unionization of workplaces has increased the wages of African Americans, who made nickels compared to their white counterparts, and has raised the floor for anti-discriminatory hiring and benefit distribution labor standards./2
Research finds that, “union-represented workers in service occupations make 52 percent more in wages than their nonunion counterparts”/3 and women’s hourly wage is, on average, five percent higher than non-unionized women./4
Similarly, there is a union wage premium, for workers with disabilities, of nearly 30 percent./5
Wage premiums are only one part of the story. Belonging to a union comes with other ancillary financial benefits for workers of color. For instance, research shows that nonwhite union members have a 50 percent greater chance of having a 401(k) plan, in comparison to their nonunion counterparts./6
Furthermore, from 2010-2016 nonwhite unionized families “had a median wealth that was almost five times as large as the median wealth of nonunion nonwhite families.”/7
Overall, unionization provides workers more income and employment stability./8
We think every worker, no matter their gender, race, sexual orientation, immigration status, or disability status, should have economic security and equity of opportunity, including the chance to join unions. For that reason, workers’ right to join a union is an essential tool in the fight to promote equity.
Equity in the healthcare system
SEIU brings a unique perspective to this issue. We represent more than one million healthcare workers, including approximately half a million home care providers and 150,000 nursing home workers. At the same time, like other unions we are also a purchaser – through our health funds – of healthcare, and other SEIU members who do not have access to these plans rely on Medicaid and
Area 1: Equity Assessments and Strategies
The rulemaking process should be made more accessible
Rulemaking is an important avenue by which both the OMB and agencies can gather information about the concerns of underserved communities. However, this process, carried through the regulations.gov website, while ostensibly open to the public, can be operationally restrictive because of inadequate outreach and confusing and arcane language. Because of this, the OMB and agencies end up hearing disproportionately more from lawyers, well-funded advocacy organizations, and corporate interests, and disproportionately less from individuals from and smaller organizations representing underserved communities. It shouldn’t take a law degree or a public policy degree for someone to know about and understand RFIs and NPRMs, and to write coherent responses to them.
Ineffective outreach is a solvable problem. OMB and the agencies need to go to affected communities for input and feedback, rather than expect them to come on their own. We recommend the OMB speak to advocacy organizations that do outreach well and glean their best practices. For instance,
The OMB should incorporate distributional analysis into its assessments
This memo tasked the agency with identifying how regulatory review could promote equity, and determining how it could include distributional analysis into its procedures. Adding distributional analysis of the expected effects of policies and regulations, and, just as importantly, calculating the costs of inaction (i.e. not implementing policies and regulations) would be impactful.
Separately, the OMB should recognize that some policies and regulations fall outside of the purview of traditional benefit-cost analysis. Policies in pursuit of equity and/or justice result in significant benefits to individuals and society, benefits which outweigh economic costs.
Agencies should utilize their Offices of Civil Rights more robustly
Agencies should utilize their civil rights offices both in their rulemaking and enforcement. Rules and standards should be reviewed by civil rights offices before they are finalized. Civil rights offices should also be actively engaged in agencies’ enforcement work.
Collect better demographic and economic data on publicly funded direct care workforce
There is a basic need to collect better demographic and economic data on the publicly funded direct care workforce (especially but not only Medicaid-funded home care), with attention to different service delivery models and employment models (note that a substantial portion of home care workers are employed under independent provider models in which individual consumers are the employer, sometimes in a co-employment model with the state or an agency).
Information collection, and potential benchmarks could include metrics such as the average hourly wage and average annual salary as a percent of a living wage (e.g., the Family Budget calculated by the
* The ratio of salaries for all long-term care workers (i.e., both home care and institutional) to salaries for workers in occupations with similar training and other entry requirements.
– An analysis of current payment levels and the effect of potential increases on racial income gaps and also on turnover rates and impact on access to services.
– Role of unions of home care and nursing home workers in addressing economic and racial inequities, and analysis of policy changes that would promote worker engagement and facilitate the ability of workers to join together in a union.
While the discussion above focuses on the LTSS workforce, we note that some of these suggestions–and our general proposal to use federal payment policy to address inequities on the workforce level, could also apply to hospitals and other health systems, although we acknowledge that these systems are somewhat less reliant on public dollars than LTSS providers.
Area 3: Procurement and Contracting
The Federal contracting system is a
Yet too many contract workers struggle with low wages and poor working conditions. Repeated analyses of government data have found that federal contractors frequently steal wages or cut corners in workplace safety; in the “economic recovery” following the Great Recession more than 300,000 workers on federation contracts were victims of wage-related labor violations./10
Because of occupational segregation and ongoing systemic bias, the contracting focus on lowest bids first and foremost especially harms the Black, brown, and women workers who are disproportionately employed in low-pay and high-risk industries./12
The federal government contracts billions of dollars each year to businesses in industries like
* building services (41% Latinx, 56% female, 13% Black),
* administrative services (45% female, 12% Black),
* warehousing (22% Black, 20% Latinx),
* food service (52% female, 14% Black, and 27% Latinx),
* security services (26% Black, 23% female, 18% Latinx),
* waste management and remediation (22% Latinx, 15% Black),
* construction (30% Latinx),
* health care (78% female, 18% Black, and 14% Latinx),
* and manufacturing (30% Latinx)./13
Fifty years ago,
* Eliminate “locality” loophole in the Reagan-era regulations implementing the Section 4(c) wage floor. See 41 U.S.C. Sec. 6707(c).
* Clarify that the 4(c) wage floor applies to all predecessor contracts. See 29 CFR 4.1b, 4.53.
* Eliminate or narrow exemptions from coverage that are not justified by the Act. See 41 U.S.C. Sec. 6702(b) and 41 U.S.C. Sec. 6707(b).
* Update the process for determining prevailing wages: DOL should update its process for issuing wage determinations and its methodology for setting wage and fringe benefits.
– Facilitate the process for newly-negotiated CBAs to be adopted as official wage determinations.
– Update its methodology in 29 CFR 4.51(b) for determining prevailing wages on non-union contracts by lowering the threshold for “union dominance” wage determinations from 50% to 30%.
– Consider how the SCA’s statutory directive to give “due consideration” to federal employee compensation could be better used to raise wages and fringe benefits.
* Require staffing plans and labor-cost disclosure for covered proposals.
* Update regulations or issue All Agency Memoranda to address any issues caused by GSA Schedules and other newer forms of contract vehicles.
Update FAR 22.101-1: This regulation should restate that “the policy of
Additional direction to contracting agencies and procurement officials should be considered, consistent with this policy.
Create public education documents: Lack of familiarity with the interaction between the National Labor Relations Act (NLRA) and SCA is a major problem for workers and for contractors who are unfamiliar with collective bargaining under the SCA. Publish a fact sheet for service workers in plain language on how the SCA and the NLRA interact to protect and encourage collective bargaining. Publish a fact sheet for contractors that includes an explanation of SCA price adjustment principles for collectively bargained wage determinations.
Increase the SCA fringe rate: Wage & Hour Division (WHD) should publish a variance implementing a one-time increase in the SCA fringe rate, currently set at
Issue All Agency Memoranda to ensure expansive SCA coverage: Ambiguities in SCA coverage is a likely culprit in why contracting officers do not always include SCA clauses in covered federal contracts. All Agency Memoranda are a tool available to DOL to stop this problem. Problematic areas that could be clarified through AAM include the narrow scope of the SCA’s statutory exemption for telecommunications contracts, the applicability of the SCA to GSA schedules and other ID/IQ vehicles, and other common misconceptions about SCA coverage.
Consider updating SCA guidance documents: Updating the DOL’s prevailing wage resource manual, SCA Directory, and other guidance documents may improve compliance.
Labor Standards for Workers with Disabilities. Promote integrated employment with full labor rights for workers with disabilities and appoint pro-worker members of the AbilityOne board, so that program is no longer exploited to undermine workers’ rights under federal labor laws.
Contracting Agency Staffing: Appoint chief contracting compliance officers to include labor issues at each contracting agency or expand the role of existing
Prioritize DOL government contracts staffing: There is no private right of action in the SCA, so it can only be fully effectuated through Federal agency enforcement. Maximizing the enormous potential of the SCA and other federal contractor initiatives requires sustained focus from top officials and fully-staffed divisions focused on the effort. DOL could consider reversing the previous administration’s fragmentation of government-contracts expertise and the position of Associate Administrator for Government Contracts at WHD restored. DOL could also consider creating a Contractor Labor Compliance division or group within DOL’s Solicitor’s Office (SOL). National Office and Regional WHD and SOL offices should staff government contracts administration and enforcement at a robust level, including higher-level civil service positions.
Improve collection of back pay in SCA investigations: Reinstate policy computing back wages to the full six-year statute of limitations. Revoke policy forgoing back pay if contract has expired. The SCA permits DOL to cross-withhold funds from other contracts and to initiate a cause of action to recover back pay if withholding is not an option. See 41 U.S.C. Sec. 6705(b). Prosecute unpaid fringe benefits as SCA violations, not ERISA violations.
Improving communication with back pay recipients: Currently beneficiaries of SCA back pay settlements receive no meaningful explanation of how their award is calculated and sometimes even why they are receiving it. They often perceive their employer’s request that they sign a WH-58 Form as a further violation of their rights by the employer. As a result, beneficiaries are unnecessarily confused and distrustful about the results of WHD’s investigations. WHD should develop standard procedures–including written and oral communication from the agency–that proactively inform backpay awardees and third-party complainants about case findings, and the methodology for calculating back pay awards.
Expand SCA coverage through strategic audits: Use audits, training, and interagency coordination to ensure contracting agencies include SCA clauses in covered contracts.
Increase third-party engagement on SCA enforcement: For example, unions can notify WHD of potential SCA violations and witnesses. WHD should amend internal guidelines to encourage investigators to pursue leads from worker organizations. Additionally, in order to prevent misclassification, WHD should consult unions and other worker organizations on SCA conformance requests and in the process for updating classifications and the SCA Directory of Occupations.
Improve communication with False Claims Act (FCA) plaintiffs: The False Claims Act is an existing mechanism to enforce prevailing wage commitments made by employers in their federal contracts. Increasing communication and assistance during
Increase data collection and public disclosure: Direct OMB,
Improve IT Systems across agencies to track the federal government’s contracted workforce and federal labor enforcement activities.
Area 3 of the
One specific area that is ripe for attention is spending on long-term care services and supports (LTSS), including both nursing home and other institutional care as well as home- and community-based (HCBS) services, chiefly home care services that allow elders and people with disabilities to remain in their homes and communities. Medicaid is the primary payer for home care, and also accounts for more than half of nursing home revenues; Medicaid and Medicare together pay for nearly three-quarters of nursing home residents. These programs also rely on the labor of an underpaid workforce that is made up largely of women of color. The direct care workforce, which is largely made up of home care workers and certified nurse assistants (CNAs), as well as workers who provide services in other community residential settings (e.g., assisted living facilities) is 86% female, and a majority of workers are people of color. Average hourly wages are only slightly above
Until the Obama administration took action to reform regulations implementing the Fair Labor Standards Act, home care workers had been mostly excluded from labor protections enjoyed by most other American workers–an exclusion directly related to the legacy of slavery and structural racism that pervades the
You ask how to achieve equity in a system that must balance competing economic and social goals including the need to conduct procurement in streamlined fashion. We suggest that–at least in the case of LTSS–this is something of a false choice, at least insofar as it suggests that there is a tradeoff between addressing racial or economic inequities and efficient program operations. As starkly demonstrated during the COVID-19 pandemic, but true even before, failure to address job quality and wage issues has led to high rates of worker turnover, with clear impact on access to care and efficient operation of programs to provide these crucial services. We believe that addressing workforce issues is a key step in lowering barriers to care generally.
Area 4: Financial Assistance
The federal government should not grant subsidies to the private sector unless each investment is tied to standards that create better jobs.
Airport service workers –who are largely people of color, immigrants and women– are underpaid and underprotected. Receipt of federal funds should be conditioned on improved workforce standards. The
Higher education institutions that received federal funding should ensure a safe and inclusive campus climate so that taxpayer funds don’t support discrimination in any form. As campus hate incidents targeting students of color and of different sexualities and religions rose, the previous administration responded by gutting the ability of the
All rulemaking that addresses financing in higher education should make sure that the population that gets support and funding is protected.
These colleges often saddle generations with mounds of debt, extracting wealth from communities of color. The OMB must use its enforcement tools and design accountability measures to protect students, including strengthening existing gainful employment and borrowers’ defense to repayment regulations. The OMB and
Area 5: Stakeholder and Community Engagement
The OMB and the agencies should prioritize representation within their own staff and leadership
The framing of this
for equity problems and solutions. At SEIU we believe that the two most important things we must do are: 1) ensure that all working people can join a union and have economic justice; and 2) dismantle systemic racism. Working people want to be heard in our democracy, and unions amplify our voices. We thank you for the opportunity to submit this letter on how the federal government can be more deliberate in its efforts towards creating a more just and equitable country. If you have any questions, particularly about our recommendations for DOL, DOT, and
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1/ SEIU. “Racial Justice – SEIU,” at https://www.seiu.org/racial-justice.
2/ Agbede, Folayemi,
3/ EPI. “Unions Help Reduce Disparities and Strengthen Our Democracy,” at https://www.epi.org/publication/unions-help-reduce-disparities-and-strengthen-our-democracy/.
5/ Ameri, Mason et al.
6/ Weller, Christian E. & Madland, David, CAP. “Union Membership Narrows the Racial Wealth Gap for Families of Color,” at https://ap-stage.devprogress.org/issues/economy/reports/2018/09/04/454781/union-membership-narrows-racial-wealth-gap-families-color/.
11/ US GAO. “Defense Contractors: Information on Violations of Safety, Health, and Fair Labor Standards,” at https://www.gao.gov/assets/710/708246.pdf.
12/ In the Public Interest. “How Privatization Increases Inequality: Race to the bottom for workers,” at https://www.inthepublicinterest.org/wp-content/uploads/InthePublicInterest_InequalityReport_Sept2016.pdf. This is in stark contrast to the advances some Black workers have steadily made in direct employment in the public sector. See for instance, Pitts, Steven C., UC Berkeley Labor Center. “
13/ Demographics by industry from
15/ For a full description of workforce demographics and challenges, see PHI, Caring for the Future (2021), as well as other PHI analyses of this workforce.
16/ Bauer-Wolf, Jeremy, Inside HIgher ED. “Hate Incidents on Campus Still Rising,” at https://www.insidehighered.com/news/2019/02/25/hate-incidents-still-rise-college-campuses;
17/ Body, Dyvonne,
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The notice can be viewed at: https://www.regulations.gov/document/OMB-2021-0005-0001
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