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DIGGING DEEPER INTO THE 10 BIG IDEAS

Table of Contents

Introduction
The 10 Big Ideas
Digging Deeper
  1. Measure what matters to workers, capturing a full range of job quality indicators
  2. Center equity in measurement
  3. Increase mandatory human capital data disclosure
  4. Link public and private data to gain new insights into the quality of jobs
  5. Leverage business data to demonstrate the return on investment from good jobs
  6. Revise data systems to include and support the non-W2 workforce
  7. Strengthen workforce system metrics to deliver results for workers and businesses
  8. Use public and private spending to measure and strengthen equity and good jobs
  9. Strengthen state and local capacity for data-driven decision-making to advance good jobs
  10. Invest in strengthening job quality measurement
Understanding the Impact
Appendices
Acknowledgements

#8: Use public and private spending to measure and strengthen equity and good jobs.

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These actions are intended for…

Government agencies and anchor institutions—including place-based community entities such as foundations, hospitals, and universities—spend billions of dollars each year purchasing goods and services. Building workforce equity and job quality standards and data collection into their procurement could improve millions of jobs.

These powerful institutions can use their contracting and grantmaking processes to collect employer data, and in turn direct dollars toward diverse companies providing good jobs. Philanthropies and other anchors can pilot and model best practices for government partners working to build new procurement capacity, including testing new tools and technical assistance approaches that government can scale.

To put this into practice, federal, state and local agencies, and anchor institutions including foundations can:

1. Leverage public spending to measure and advance job quality and equity.

Public sector spending represents a significant portion of the Gross Domestic Product (GDP), averaging 37% from 1970 to 2020, 1 making government procurement and purchasing a crucial lever in fostering good jobs. While several jurisdictions are experimenting with improving equity and representation in publicly-funded jobs, including Boston 2 and Los Angeles, 3 there are no standard job quality requirements built into federal procurement. This is a missed opportunity to ensure that public spending supports the public priority to advance equitable economic opportunity for U.S. workers. Unprecedented investments including the American Rescue Plan and Infrastructure Investment and Jobs Act (IIJA), and the additional flexibilities provided to state and local governments deploying these federal dollars, offer a promising opportunity to embed good jobs standards and metrics into the creation of new jobs and the improvement of many existing jobs across the United States. This foundational effort can also set the standard for future procurement processes.

To build job quality into public procurement, the White House Office of Management and Budget (OMB), the U.S. Department of Labor (DOL), and state and local governments and procurement offices should adopt the following practices:

  • OMB can proactively update the Uniform Guidance, 4 the key federal rules that govern how state, local and tribal governments spend down federal grants, to unleash the power of federal investments to measure job quality and create good jobs. This aligns with the recommendation by the White House Task Force on Worker Organizing and Empowerment 5 to “explore and identify opportunities to update the Uniform Guidance to empower workers,” in order “to ensure that federal financial assistance programs…allow consideration of job, wage, and worker empowerment impacts as part of the application evaluation process; and ensure that grantees have the freedom to apply worker-empowering, high road conditions, including local-hire and Project Labor Agreement (PLA) obligations, on their subgrantees.” While the IIJA explicitly allows for local hire on the U.S. Department of Transportation-funded highway and transit construction projects, jurisdictions are prohibited from building good jobs and equity standards into many federally-funded procurements, especially when contracting with private companies. The Uniform Guidance can be updated using executive authority through a formal rule-making process without the need for Congressional action. This will likely require that the OMB hire or assign key staff members to oversee the year-long process of gathering input from state and local officials, business, labor, and community partners, and updating language.
  • During the Good Jobs Summit, 6 DOL announced that it has entered into formal collaboration with multiple agencies including the U.S. Department of Commerce (DOC), the U.S. Department of Energy (DOE), and the U.S. Department of Transportation (DOT) to ensure that recovery investments support good jobs. To advance this work, DOL can develop a standard set of job quality data disclosures as a prerequisite for participation in public sector procurements, in order to help agencies evaluate and monitor bidders for discretionary funds. This can be piloted across agencies through IIJA spending. Agencies could also consider setting specific goals around the number or percentage of vendors in their funded portfolio that will meet job quality and equity requirements within a specific timeframe. See Appendix 3 (LINK) for recommended standard disclosures.
  • DOL, DOC, DOE, and DOT could explore pairing changes in the procurement process with technical assistance supporting subrecipients to implement standards on the ground, including through subsidized access to data management tools such as LCP Tracker. This could also include specific technical assistance to community-based organizations and small businesses, especially those led by people of color, to ensure they are equipped to participate in the procurement process. This may also require thinking differently about the size of procurements, response timelines, pre-bid engagement opportunities, the way experience is demonstrated, and even payment terms. This technical assistance effort can lift up areas where complementary investments can be made by philanthropy or private investors to build the capacity 7 of community organizations and small businesses to provide job quality data and win procurements (e.g., through financing and mentorship).
  • DOL can work with state and local agencies who receive Workforce Innovation and Opportunity Act (WIOA) funds to cascade equity and job quality standards to subrecipients and service providers who deliver support across the workforce system, without the need for statutory or regulatory changes. This can include both setting good jobs standards for the staff of the subrecipient agencies that deliver services (who are often community-based workforce development nonprofits), and providing incentives for these agencies to refer people into jobs that offer stability and pathways to mobility, as described in Idea #7 [LINK]. For example, DOL could provide guidance about how states encourage living wages for subrecipient staff (such as by collecting data through procurement on proposed frontline staff wages), and could provide examples of ways that a state or local board can better understand compensation of frontline workers and partner to improve them (e.g. encouraging a respondent to include wage increase in budgets for multi-year awards, or adding separate line items into sample budget templates for staff training). Inclusion of good jobs standards in subrecipient funding will serve as a mechanism to encourage job quality for workforce agency frontline staff, which is particularly important as frontline staff often represent the communities participating in programs and hold challenging jobs.
  • DOL can explore additional pathways to motivate data disclosure and job quality improvements by private employers. For example, a national nonprofit organization could work with DOL to develop a good jobs marketing designation such as the National Labor Exchange’s (NLX) hire vets medallion that businesses can receive after providing a required set of job quality disclosures. DOL could then build this designation into the National Labor Exchange (NLx) or USAJobs to signal to workers that these organizations meet a standard for quality jobs. DOL could also establish guidelines on the award of priority points, much like those given for small or minority or women-owned businesses, with particular focus on industries that have historically had low-quality jobs and/or higher representation of workers of color and can leverage public investment to build capacity and strengthen workforce practices.

2. Use anchor institution spending to accelerate the creation of good jobs.

Anchor institutions, including foundations, healthcare and higher education organizations, spend trillions 8 of dollars each year purchasing goods and services, creating and supporting millions of jobs, disproportionately held by individuals of color. 9 Yet too often, large contracts in catering, security, janitorial services, and other core functions rely on workers who earn low wages in precarious jobs, and can work at odds with the anchor institutions’ mission and community impact goals. Through the lever of procurement, philanthropy and other anchor institutions have the opportunity to address this head on by using their full arsenal of resources to propel good jobs and equity.

To leverage this opportunity, anchor institutions should:

  • Pilot the incorporation of good jobs and equity standards and metrics in the Request for Proposal (RFP) and vendor selection process. To encourage a focus on job quality in addition to price, consider requiring large vendors, such as those with more than 100 employees, to report wages disaggregated using workforce demographic data, similar to that already required in unemployment insurance earnings data and EEO-1 data, as part of the bidding process. Over time, explore incentivizing vendor reporting of additional data such as benefits or stable scheduling through preference points in award scoring or contract flexibilities.
  • Provide flexible financing and technical assistance for small businesses, particularly those owned by people of color, to ensure they are equipped and encouraged to participate in the bidding and data reporting process and can leverage the process to build capacity and expand. Consider options to incentivize diverse participation, from holding community conversations in advance of the formal procurement process, to awarding priority points for businesses with diverse representation in ownership and across the workforce, or facilitating mentoring connections that help to support expansion of entrepreneurs’ capacity over the long-term. In addition, test a continuum of supports that can help business owners leverage the procurement process to improve jobs and build capacity to participate in large-scale government bids. These might include innovative approaches to vendor payment terms and timelines, provision of zero-interest loans or other low-cost financing, and access to business coaching focused on strengthening workforce practices to improve business performance and enable stable growth.

Endnotes

  1. U.S. Bureau of Economic Analysis. Government Spending to GDP in the United States.
  2. Boston Economic Opportunity and Inclusion. Fund to Support Equity in City Contracting Relaunched (April 21, 2022).
  3. Ron Galperin, Los Angeles Controller. Seizing the Opportunity to Advance City Contracting Equity (July 8, 2020).
  4. Federal Register. Uniform Administrative Requirements, Cost Principles, and Audit Requirements – A Rule by the Management and Budget Office (January 19, 2022).
  5. Kamala D. Harris and Martin J. Walsh, The White House. The White House Task Force on Worker Organizing and Empowerment – Report to the President (2022).
  6. United States Department of Labor. The Good Jobs Summit (June 21, 2022).
  7. Bruce Katz et al., The New Localism. Unlocking the Procurement Economy (May 20, 2022).
  8. National Council of Nonprofits. Economic Impact.
  9. Hye Jin Rho, Hayley Brown, and Shawn Fremstad, Center for Economic and Policy Research. A Basic Demographic Profile of Workers in Frontline Industries (April 2020).

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