Public Policy Group Includes Pay Ratio Cap Among Federal Contractor Initiatives
June 19, 2014
Public policy organization Demos, which published an influential report last year which fueled White House action on wages for government contractors, has published a follow-up report outlining additional actions the federal government could take to improve working conditions among government contractors, including among other things, limiting the CEO to median worker pay ratio for government contractors contractors to 50. Specifically, the report calls on President Obama to issue a "Good Jobs Executive Order" to incorporate several new standards including the offering of "living wages", respecting collective bargaining, and capping executive pay at 50 times the median salary of the company' staff. Regardless of whether such a proposal could ever become law, the effort's use of pay ratio and ratio related pay caps demonstrates how pay ratio is likely to be used in policy debates - as a rhetorical touchstone - going forward. Last year, Demos released a report suggesting that the Federal government reinforced inequality by allowing federal contractors to pay employees less than $12 an hour. Unable to push a minimum wage increase through Congress, President Obama responded with an executive order mandating a $10.10 per hour minimum wage for employees working on federal contracts.