Mark Koba CNBC
13 May 2013
The federal government is better at creating low-paying jobs than Wal-Mart and McDonald’s combined, according to a new report.
A study released earlier this month from the public policy group Demos states that through various forms of government funding in the private sector, nearly two million people are making $12 an hour or less. The number of workers at Wal-Mart and McDonald’s together at $12 an hour or less is currently around 1.5 million, according to the report.
“The sheer number of those workers making so little is surprising,” said Amy Traub, a senior policy analyst at Demos and co-author of the study.
“We assume people working on behalf of America would be making more, but that’s not the case,” Traub said. “And many of these people are making less than $12 an hour.”
The report says that when tax dollars underwrite bad jobs, the economy as a whole is weakened.
“People at these levels of income have to go on food stamps or other forms of government assistance and this just compounds the problem,” Traub argued. “They’re not making a living wage and the economy suffers.”
Federal contracting to the private sector has grown over the years, doubling between 1990 and 2009, though it has decreased slightly since 2010, according to the Demos survey.
(Read more: Where the Summer Job Market Is Heating Up)
But the amount is still huge. American businesses got $446.5 billion from taxpayers last year in the form of grants, loans, and subsidies. Industries receiving funds include manufacturing, construction, food service, health care, retail and manufacturing. The number of workers under that funding totals 2.2 million.
The report says that most of the low-wage workers are clustered in sectors like apparel, construction, education and retail. But even industries seen as higher paying, such as scientific research, are among those with workers making $12 or less an hour.
The biggest offenders came from those companies receiving direct federal contracts. Some 560,000 workers in those firms make $12 an hour or less, says the report.
Continue reading at Federal government creates more low-wage jobs than Wal-Mart – NBC News.com.