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September 14, 2011

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"Contracting Out Costs the Government Lots Extra"

Posted: 14 Sep 2011 12:24 AM PDT

Michael Froomkin:

Contracting Out Costs the Government Lots Extra, POGO Study: Contractors Costing Government Twice as Much as In-House Workforce. This looks like an important study. The results are sadly not incredible: if you look not at the wages employees receive in the contracted-out businesses, but rather the prices their employers charge the government for their services, contracting-out looks (sometimes very) expensive compared to using government workers.

The U.S. government's increasing reliance on contractors to do work traditionally done by federal employees is fueled by the belief that private industry can deliver services at a lower cost than in-house staff.

But a first-of-its-kind study released today by the Project On Government Oversight (POGO) busts that myth by showing that using contractors to perform services actually increases costs to taxpayers.

POGO's new report is the first to compare the rate that contractors bill the federal government to the salaries and benefits of comparable federal employees. The study found that while federal government salaries are higher than private sector salaries, contractor billing rates average 83 percent more than what it would cost to do the work in-house.

The study comes with some caveats, but at first glance it looks like a serious attempt to measure things that — oddly — are not routinely measured by the government that pays for all this stuff.

links for 2011-09-13

Posted: 13 Sep 2011 10:01 PM PDT

Our Lost Decade

Posted: 13 Sep 2011 03:33 PM PDT

 Jared Bernstein:

The Lost Decade for the Middle Class, by Jared Bernstein: The poverty and income results for 2010 came out this morning and they're a) about what you'd expect, and b) pretty bad. ...

The headline numbers are:

  • the poverty rate increased to 15.1% in 2010 from 14.3% in the previous year;
  • the income of the median household, the one right in the middle of the income scale, fell 2.3% in real terms, a loss of about $1,100; median income was about $49,500 last year.
  • just about 50 million people lacked health insurance last year, about 16.3% of the population, which is about the same share as last year; but this steady share reflects loss of employer-based coverage and gains in coverage by a government plan. ...

But what is remarkable and historically unprecedented is the breadth and depth of the loss of middle-class income...: compared to its peak in 1999, median household income is down down $3,800 (2010 dollars), more than 7%. 

Source: Census Bureau

The decline is even more dramatic for non-elderly households, those headed by someone less than 65 years old. That value peaked in 2000...  It's down $6,300, or 10% since then, including last year's decline of 2.6% ($1,500), the largest on record going back to 1987 (see chart). 

Economists talk about the lost decade in Japan... Well, with these 2010 data, we can confirm the lost decade for the American middle class. ...
These Census results should force us to be very clear eyed in recognizing that ... the federal gov't must fill two very important roles. 
First, we must have countercyclical measures to protect the most vulnerable among us, those least able to withstand the loss of income or health care coverage... Today's results deeply underscore the need for countercyclical policies like Unemployment Insurance, nutritional assistance, and publically-provided health-care coverage...
The second critical role for gov't ... is to help offset the contraction in private sector demand, with temporary measures to help people get back to work.  In case we needed another reminder, these results underscore urgency of passing the jobs measures the President recently introduced.
Those are, of course, temporary measures meant to further offset the impact of the Great Recession—to pick up where the Recovery Act left off.  These are cyclical measures.  As such, they are warranted and important.
But as the income, poverty and inequality results of the last decade reveal, we have a structural problem that needs to be addressed.  Otherwise, we could lose the next decade as well.

The Poverty Report: 'Doubling-Up’ Is on the Rise

Posted: 13 Sep 2011 12:33 PM PDT

A quick reaction to one aspect of the poverty report the Census released today:

The Poverty Report: 'Doubling-Up' Is on the Rise

Why a Working-Class Revolt Might Not Be Unthinkable

Posted: 13 Sep 2011 08:28 AM PDT

New column:

Why a Working-Class Revolt Might Not Be Unthinkable

The main point is about how unbalanced political power has tilted policy away from the needs of the unemployed, and the need for that to change.

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