Thursday, January 22, 2009

Stimulus Quotas from the Trenches

Michelle Malkin has a good entry today (HotAir also comments) about the resurfacing of the quota agenda in the federal contracting process. It's a great read and centers around Robert Reich's following comments:

But if there aren’t enough skilled professionals to do the jobs involving new technologies, the stimulus will just increase the wages of the professionals who already have the right skills rather than generate many new jobs in these fields. And if construction jobs go mainly to white males who already dominate the construction trades, many people who need jobs the most — women, minorities, and the poor and long-term unemployed — will be shut out.

What to do? There’s no easy solution to either dilemma…

People can be trained relatively quickly for these sorts of jobs, as well as many infrastructure j0bs generated by the stimulus — installing new pipes for water and sewage systems, repairing and upgrading equipment, basic construction — but contractors have to be nudged both to provide the training and to do the hiring.

I’d suggest that all contracts entered into with stimulus funds require contractors to provide at least 20 percent of jobs to the long-term unemployed and to people with incomes at or below 200 percent of the federal poverty level. And at least 2 percent of project funds should be allocated to such training. In addition, advantage should be taken of buildings trades apprenticeships — wich must be fully available to women and minorities.

Now, as I've mentioned in some other posts, I've worked in public sector construction projects in the past. Let me assure you, depending on the contract, these things are already riddled with quotas.

The easiest example to lay out is the federally funded Chicago Housing Authority, which already requires that every general contractor commit 40% of the monetary value of its proposal to businesses owned by minorities (MBE) or women (WBE). These are requirements of the proposal. If your proposal does not include at least this percentage, including a signed letter of intent to each minority firm, along with their proper government certification of being a minority, your proposal is thrown out. You might have turned in the best qualifications and the best price, with the best schedule and the best plan, but you didn't have enough Black, Hispanic, Asian or Woman-Owned businesses. Why didn't you? Well because they are playing the game. They know they're required, so their proposals are intentionally fat. They don't need to be competitive so long as the government says you don't get the job without them.

But, you might say, giving away contracts isn't what Reich is talking about. He's talking about giving actual people the actual jobs.

Well, guess what. Those quotas are already there, too. The CHA conforms to the federal Housing & Urban Development Act of 1968, Amended by Section 915 in 1992. The CHA conforms via what it calls its Section 3 Policy, which requires that:
At least 30% of the aggregate number of full-time new hires must be Section 3 residents, with a preference for residents at the development where the work is being performed.

Where a Section 3 Resident is Defined as:

1.) A public housing resident, or 2.) An individual who resides in Cook County and who meets the following criteria:

• Low-income persons – families (or single persons) whose incomes do not exceed 80 per centum of the median income for the area.
• Very low-income persons – families (or single persons) whose incomes do not exceed 50 per centum of the median income for the area.

These are the criteria that Reich is pushing for in all federal contracts awarded with stimulus funds. But, you say, that's just the CHA. Well no, that's any organization soliciting a contract under HUD. HUD encompasses the entire country, and those qualifications are already in place there.

But they're technically already in place as quotas on contracts under the Department of Defense as well, including Navy, VA and Army Corps of Engineers contracts. The language is there for the using, if they want to use it. It's just that these organizations have some common sense. The Navy, VA and Army Corps understand that these quotas are completely unrealistic outside of the context of an organization such as, say, the CHA, and so, at the discretion of their contracting officers, do not implement the policies.

In Chicago, we are capable of meeting these quotas because we are able to work with the unions and bring the residents on as unskilled laborers to do simple tasks like removing demolition debris, stocking floor tile or stocking bricks. In the respect that we are heavily unionized in Chicago, thereby heavily structured, we are capable of carrying this out.

Think of the logistics of trying to achieve this kind of hiring outside of a large, heavily unionized city. It would be impossible. You would need to charge the government for a completely separate staff of people who did nothing but try to hire unskilled, underqualified people who have no tools of their own and no concept of site safety. Not only is tax money wasted by the extra staff necessary, but you're now at a higher risk with your insurance company, not to mention at risk of OSHA citations that may befall you for having people on-site that aren't knowledgable enough to make good decisions.

Given that Obama wants to run so much infrastructure out to rural areas, this is the handcuffed situation we would be in.

Robert Reich needs to start thinking in terms of reality.

Or maybe he should just shut his mouth.

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