Janitors without a union, many of whom are immigrants and people of color, are paid poverty wages and are often victims of wage theft and retaliation for asserting their rights in the workplace. The State of Oregon and local governments’ approach to the procurement of janitorial, security, and laundry services can have a negative or positive impact on the workers, communities, and economy of our state, with a disproportionate impact on workers of color. When state and local governments rely on low-bid contracts, they can inadvertently pay the “high cost of low wages” by providing de facto subsidies to low-pay employers, in the form of food assistance, health insurance, and other public programs required to meet the needs of underpaid employees. This in turn creates unfair competition, giving an advantage to low-wage companies that underbid other employers that maintain higher job quality standards.
Low-bid procurement exacerbates institutional racism and the gender pay gap, because workers in low-wage industries are often disproportionately women and/or people of color. Low-bid procurement also creates unnecessary risk in public institutions, because low pay is associated with high employee turnover, reduced performance, and labor unrest.
For these reasons, Oregon state and local governments should create policies and laws to raise job quality standards, benefit working Oregonians and their families, strengthen our economy, and reduce the risk to state and local governments that contract for janitorial, private security, and laundry/uniform services. Such concepts include requirements that service contractors:
- Pay wages and benefits that meet the standards set by the Service Contract Act, which sets a floor for wages and benefits for federal contractors based on job classifications.
- Retain predecessor contractors’ employees, to maintain service quality and prevent worker displacement.
- Document Labor Peace: binding agreements that reduce the risk of labor disruption, such as a labor peace agreement, collective bargaining agreement, or labor-management partnership.
- Submit labor cost information (such as staffing plans, wage scales, and detailed benefits information) with bids. This would address unfair competition by bidders who submit unrealistically low bids.
In addition, the state could improve the monitoring and enforcement of laws related to Oregon Forward Contractors (OFCs, formerly known as Qualified Rehabilitation Facilities/QRFs), such as by:
- Requiring the Oregon Department of Administrative Services (OFC division) to formally certify that public agencies are adhering to Oregon procurement law mandating priority contracting with OFCs.
- Establishing meaningful penalties and enforcement mechanisms to ensure compliance.