SENATE BILL: Responsible Federal Contracting Act of 2013 (Law'd)

[Southern Senator North Carolina Yankee]

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Sponsor: TNF

[Southern Senator North Carolina Yankee]

The sponsor has 24 hours to begin advocating for this bill.

[Southern Senator North Carolina Yankee]

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I am worried the present text might cause a disruption in procurement for our military and defense operations and therefore some kind of adjustment period is in order.

[TNF]

Amendment is friendly.

Basically the point of this bill is that I don't think the Republic of Atlasia should be subsidizing companies where there is a large pay differential between the CEOs and the workers of those companies. We do not need to reinforce negative trends in the labor market that put CEO pay three hundred to five hundred times that of their workers. We should set a good example and reward responsible companies that either cut their CEO's pay or raise their workers' wages.

[Southern Senator North Carolina Yankee]

What about also requiring clawback provisions on the infamous "golden parachutes", in order to get federal contracts?

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Sponsor Feedback: Friendly
Status: Senators have 24 hours to object to the adoption of the above amendment.

[Southern Senator North Carolina Yankee]

I respect my colleague TNF and his courageous efforts on behalf of Atlasian workers, but I am concerned that this legislation is a bit of a gimmick. I think the employees of potential federal contractors are better served by guaranteeing their right to organize, their right to a decent wage, and their right to a safe workplace. So long as the rights of labor are respected, I don't favor excluding anyone from competitive bidding on the basis of nothing other than CEO-to-worker pay ratios.

I am all for competative bidding, but establishing conditions doesn't seem all that unreasonable to me.

[Fmr President & Senator Polnut]

I also respect the intent of the Bill proposed by the Senator, but I'd be curious to know how many current contracts the Atlasian Government has with companies who are well outside this. This strikes me as aspirational, but fundamentally unworkable.

Currently, the average CEO earns 273 times what their worker's average salary is. Now, I'm deeply distressed by income inequality and it being embedded in our economic system, but I don't see this as a practical deal-breaking determination in service and produce tender processes, especially since we're talking about raw salary, not considering employee benefits, which to me, is more important that dealing purely with salary.

[TNF]

The only reason I didn't go with a raw dollar amount here was because I figured that would be even less acceptable to members of the Senate. If that's not the case, I'd be glad to offer an amendment limiting federal contracts to companies that pay their CEOs no more than $400,000 per year in salary and benefits.

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I think this is a good idea to though I'm not exactly sure how I would word it.

[bore]

Like almost everyone else so far I wholeheartedly support the intent of this bill, but I'm worried that it will be completely uneforceable. For example in Britain when a bill was passed taxing bankers bonuses more heavily the banks just increased their base pay. Similarly huge share options which are taxed at a lower rate than income, are given to almost every CEO. Basically whenever some way to limit executive pay is introduced it's just avoided.

It seems to me the best policy is for us to discourage huge CEO pay by taxing it heavily and giving shareholders more power in stopping pay packets (which has had some success recently in Britain). If a few people slip through that net (which will happen) that doesn't concern me too much, as long as we can make sure that everyone in Atlasia is making enough money to live on.

[TNF]

Like almost everyone else so far I wholeheartedly support the intent of this bill, but I'm worried that it will be completely uneforceable. For example in Britain when a bill was passed taxing bankers bonuses more heavily the banks just increased their base pay. Similarly huge share options which are taxed at a lower rate than income, are given to almost every CEO. Basically whenever some way to limit executive pay is introduced it's just avoided.

It seems to me the best policy is for us to discourage huge CEO pay by taxing it heavily and giving shareholders more power in stopping pay packets (which has had some success recently in Britain). If a few people slip through that net (which will happen) that doesn't concern me too much, as long as we can make sure that everyone in Atlasia is making enough money to live on.

Giving shareholders more power period created this problem though, as shareholders in the late 1970s used their new leverage to tie compensation to increased profits, which caused a lot of CEOs to do whatever necessary to maximize profits, typically at the expense of stakeholders (i.e. workers, communities who relied on the company in question and who contributed to it), so I would be kind of weary in assigning more power to people who own these companies but don't have a real hand in their day to day operation.

I understand your point and everyone here's point, and even if we ultimately end up ditching the ratio I've proposed in this thread, be it in favor of a raw dollar figure or get rid of it altogether, I think that this bill is worth it at least because we could throw some stipulations on businesses that the Atlasian federal government gives contracts to. We have Davis-Bacon for construction projects, why should we not also have some kind of regulation to encourage responsible contracting? I think that perhaps a way to go might be to instead mandate that the federal government only get into bed with companies that pay double the minimum wage hourly. This would promote good working conditions for Atlasian workers (the minimum wage is currently $11.50 an hour in Atlasia and is slated to rise to $12.50 on January 1, so an alternate requirement mandating double that for hourly workers at firms contracting with the Republic would be required to pay their workers at least $23 an hour until January 1st, 2014, in which they'd be required to pay their workers $25 an hour) and would not significantly hurt say, defense contractors, who typically pay their unionized workforces much more than that per hour as is.

[TNF]

And just to add to this discussion, the federal government is the largest low wage employer in the country.

[Southern Senator North Carolina Yankee]

Just a quick note about RL information, we must be careful to account for differents induced by our policies and statutes being different over the last nine years or whatever.

I also respect the intent of the Bill proposed by the Senator, but I'd be curious to know how many current contracts the Atlasian Government has with companies who are well outside this. This strikes me as aspirational, but fundamentally unworkable.

Currently, the average CEO earns 273 times what their worker's average salary is. Now, I'm deeply distressed by income inequality and it being embedded in our economic system, but I don't see this as a practical deal-breaking determination in service and produce tender processes, especially since we're talking about raw salary, not considering employee benefits, which to me, is more important that dealing purely with salary.

What about a more inclusive approach looking at the full range of compensation, but keeping the ratio, would that solve the problem?

[TNF]

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Right. I realize that Atlasia is a lot less unequal than the United States, but afaik there's no legislation concerning federal contracting, at least none that's been enacted since Atlasia was founded in 2004, so at the very least it would only be slightly different because of our higher minimum wage. Still, I think it is imperative that we prioritize contracting out services to those companies that are socially responsible and pay their workers well. This can act as a mechanism to raise wages elsewhere as more companies seek federal contracts, so really it's a win-win proposal for the business community. Wages going up might cut into profits but in the long run having stable contracts with the federal government will boost overall profitability.

[Southern Senator North Carolina Yankee]

What about the idea I mentioned above about incorporating a requirement that the companies have clawback provisions for the "golden parachutes" in order to contract with the Feds? 



Also, 56:40 has been adopted.

[TNF]

What about the idea I mentioned above about incorporating a requirement that the companies have clawback provisions for the "golden parachutes" in order to contract with the Feds? 



Also, 56:40 has been adopted.

I'm all for it, but I admit I don't know how I'd write that as an amendment. Do you have any suggestions per that, Yankee? And what does everyone think of substituting the double the minimum wage rate requirement for the pay ratio?

[Southern Senator North Carolina Yankee]

I am really rather flexible on the specifics of the ratio myself.

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[TNF]

Amendment is friendly.

[Gass3268]

I too like Senator NCY's amendment.

[Napoleon]

Any ideas what companies or at least industries could be affected?

[Southern Senator North Carolina Yankee]

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[TNF]

As noted above, the Amendment proposal is friendly.

[Southern Senator North Carolina Yankee]

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Sponsor Feedback: Friendly (I would only have needed it again, if I had altered the pre-amendment text from yesterday to do something differently upon it being offered. That way the sponsor isn't the victim of a bait and switch ).
Status: Senators have 24 hours to object to the adoption of the amendment.

[TJ in Oregon]

I support Yankee's amendment and would favor requiring a clawback ability if it were proposed as a stand-alone bill. However, I cannot support a defacto pay cap that would dramatically hurt contractors from pursuing talented executives. Businesses that aim for government contracts are not completely isolated from the rest of the job market and this would do nothing to change the overall employment picture, just tie the hands of one industry.

I would support forbidding the federal government from reimbursing contractors for their executive salaries.

[TNF]

TJ how you would feel about a proposal that looked something like this?

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[Southern Senator North Carolina Yankee]

I will let TJ answer for himself, but it seems to change the nature of the desired aim, which before was using our "bargaining power" so to speak to reign in corporate excesses.

I worry that we may have difficulty finding domestic suppliers and service providers in some areas where there is significant overseas competition and encouraging further outsourcing of our gov't suppliers to China and other undesirables is probably something we should avoid.

I would support forbidding the federal government from reimbursing contractors for their executive salaries.

How would that work exactly? IF the company solely engages in the supplying/servicing of the gov't, they wouldn't have any executive salaries if I understand you right, which seems to be even worse in terms of the concern you mentioned in the first paragraph.