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How Your Tax Dollars Fund Bad, Low-Wage Jobs and Help Fuel Inequality

We all have a responsibility to ensure that our tax dollars do not exacerbate economic disparity.

The vacuous, cheerful expression of the Walmart smiley face has long been associated with the paradoxically dark reality of low-wage work. With the recent fast-food worker walkouts in New York, the golden arches may go down, too, in the annals of class-war symbology. But a  report released Wednesday by the public policy organization Demos, reveals that there is one employer responsible for creating more low-wage jobs than Walmart and McDonald’s combined: Us.

According to "Underwriting Bad Jobs: How Our Tax Dollars are Funding Low-Wage Work and Fueling Inequality," taxpayers subsidize nearly 2 million low-wage jobs through federal contracts, Medicare and Medicaid spending, Small Business Administration loans, federal infrastructure funds, and other areas of government spending.

Low-wage workers in these sectors include apparel manufacturers, construction laborers, retail workers, security guards, janitors, and home health aides, to name a few. The vast majority of these workers are paid less than $12 per hour, and depending on the sector, wages are often much lower than that. The struggle to live and raise families on low wages is made even more difficult by the lack of benefits and job security that are typically part and parcel of these jobs.

Home health aide, for example, is among the fastest growing occupations in the country. By 2020, home health aide and personal care aide jobs are expected to grow by 70% to employ 3.2 million Americans. Despite the demand for the important services home health workers provide in caring for the sick, elderly and disabled, the median wage for home health aides is $9.82 per hour. According to the Demos study, two thirds of the home health industry is supported by tax dollars funding Medicare and Medicaid.

However, not all federally funded jobs are underpaid. The report explains that while the government limits the amount of federal funding that contracting executives can receive, the cap is indexed to the compensation levels of private sector executives. So, as CEOs in the private sector have seen their incomes skyrocket, the maximum compensation for a federally contracted executive has risen to over $700,000.

Amy Traub, one of the authors of "Underwriting Bad Jobs," says the American people have a responsibility to ensure that their tax dollars do not exacerbate economic disparity.

“We don’t usually think of the federal government as a low-wage employer. In the economy as a whole, we know there is a lot of low-wage work. You look at Walmart and McDonald’s and the workers who are standing up and demanding something better, and they deserve something better. But when it’s people working on behalf of America, we’re all responsible for that.”

A campaign called  Good Jobs Nation will give Americans an opportunity to embrace that responsibility by supporting workers with federally subsidized jobs who are uniting to demand living wages, benefits and better working conditions. The campaign went public in conjunction with the Demos report at a press conference in Union Station, a federal building in Washington DC.

Lucila Ramirez is usually mopping floors and taking out the trash at Union Station, working hard to ensure the historic building is clean and beautiful for the hundreds of tourists and DC residents who pass through it every day. Today, however, she stood at a podium to tell her story in the posh Columbus Club in the east wing of the building.

Ramirez has worked for a company contracted by the federal government to clean Union Station for 21 years. In 2012, nearly $2 billion in federal contracts went to companies providing property services for federal buildings. But after two decades of working hard for her company, Ramirez makes only $8.75 per hour and has no benefits. She has to rent rooms in her home to strangers to cover the mortgage, and at 55, is worried about when she will be able to retire.

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