One of the best ways to lift low-income District residents out of poverty is to provide them with a job that pays a living wage. In an effort to provide good jobs to District residents, the Council enacted and the Mayor signed the First Source Act and the Living Wage Act. The laws require that 51% of the employees hired for a City funded development projects be District residents and that the jobs pay a living wage.
The District Auditor released an evaluation of the compliance with these laws in connection with certain projects within the jurisdiction of the Deputy Mayor for Planning and Economic Development (specifically those that were started by the former Anacostia Waterfront Development Corporation and the National Capital Development Corporation.) The auditor found that the District’s implementation was woefully inadequate.
Among the findings of the Auditor are:
1. The Department of Employment Services had inadequate procedures to monitor compliance with the statutes.
2. The failure to monitor resulted in wide spread no- compliance. Only 4 of 16 covered projects met the 51% goal. As a result, there were 361 jobs that should have gone to District residents that were given to persons living outside the District.
3. District residents lost more than $14 million in wages that were paid for by public funds.
4. The living wage provisions have not been adequately implemented. The Auditor specifically blamed the Mayor and the Attorney General for failing to support efforts by DOES to comply with the obligations of the law.
The results of the audit are very disturbing. At a time when the unemployment rate in the District is near 11% and in some wards near 30%, nothing could be more important than job creation. Given the structural imbalance created by the District’s “unique” relationship with the federal government and its suburban neighbors, it is particularly unfortunate to provide government funds for jobs for people living outside the District.
If the District government is serious about helping reduce poverty in the District, fixing First Source and Living Wage compliance monitoring is a great first and easy step.