A First Move on First Source

January 25th, 2011 | by Elissa Silverman

How can the District better leverage its spending to create more jobs for city residents? The benefits of finding good answers to this important question not only help unemployed and underemployed DC residents, but also help the District in general because the city will likely see a boost in tax revenue given increased earnings and spending power.

One answer is to strengthen a DC law known as First Source.  As a mayoral candidate, Vince Gray promised to boost compliance with the law, which requires that District residents make up least 51 percent of “new hires” on government-assisted projects and contracts. Last Tuesday, DC Council Chairman Kwame Brown introduced his own bill to beef up the law.

Brown’s bill would set new requirements for hiring DC residents, increase penalties for willfully ignoring this requirement, and establish a “workforce intermediary” to help meet the hiring needs of employers subject to First Source.  The latter, in particular, is an important step toward making sure that First Source meets the goal of getting DC residents into jobs.

First Source has been around for more than 25 years, yet the law has fallen short on impact. Part of the reason is that contractors and projects receiving District funds have been able to sidestep First Source with little consequence. The lackadaisical enforcement comes with a cost: A DC Auditor’s report last year found that the District lost out on millions in potential earnings for jobless residents —and the taxes that these residents would have paid.

A few specifics: Chairman Brown’s bill would require the Mayor to implement all the major recommendations from the DC Auditor’s report, and it would double the fines for noncompliance. Next, it would change the hiring targets from 51 percent of all “new hires” to percentages of total worker hours—from existing jobs in addition to new jobs—depending on whether the assistance was construction or non-construction related. For non-construction projects and contracts totaling $100,000 or more, 20 percent of all hours worked would have to be performed by District residents.

For all government-assisted construction projects above $100,000, the bill would require District residents receive at least:

  • 25 percent of journey-worker hours
  • 50 percent of apprentice hours
  • 60 percent of skilled -laborer hours
  • 70 percent of common-laborer hours

How do we know that there are District residents ready to take on this work? Some employers subject to First Source have said they made their best efforts to hire DC residents but couldn’t find residents with appropriate skills. That’s why DCFPI, along with DC Appleseed and the DC Employment Justice Center, have focused on the importance of creating a First Source intermediary in the law. An intermediary would act as a broker between employers with DC government contracts, residents seeking employment, and entities that provide job training to make sure that DC residents are trained and ready for the jobs available. Other cities with successful First Source programs have set up this type of workforce development pipeline. Chairman Brown’s bill requires the mayor to set up a task force to create such an intermediary.

The bill has been referred to two Council committees, and we hope hearings will take place soon. Getting our neighbors back to work should be a top priority for DC’s elected leaders. A thoughtful and strategic approach to strengthening First Source is a good first step.

3 Responses to “A First Move on First Source”

  1. CCCA Prez says:

    There is no need to punish employers when the problem is not really their fault. We do need more training for residents and effective job placement resources. But increasing penalties for developers is pointlessly waving a big stick. The stick has been there before; some employers have been able to sidestep the penalties only b/c they made reasonable good faith efforts to find DC employees. Hence the “lackadaisical” enforcement.

    Let’s focus on getting residents educated and trained for current and future jobs. The below grade level achievement of too many students, and their resulting disillusionment with education and low graduation levels are the not-simple problems that electeds and think tanks need to tackle.

  2. Loved your article and I believe that it is right on the money! The ‘JOBS BROKER’ title you referred to is actually a DC licensed business activity already covered by statute under the ‘Employer Paid Personnel Service’ which is a sub designation of the DC licensed employment agencies. I currently hold this license, and it’s a win-win for everybody when you get the ‘politics of job creation’ out of the way. All in all, I think there is a good environment right now with lots of potential for job creation. If given the chance, I plan on doing my part to work with everyone to create at least 3,000 jobs in the next year like we tried to do in the summer on 2009. I’ll need everyone’s help and cooperation though. We can do it, and be a model for the rest of the nation.

  3. [...] This post was mentioned on Twitter by Chuck Bean and David Hoffman, Melissa Bondi. Melissa Bondi said: DCFPI highlights First Source jobs creation tool, not fully utilized today http://www.dcfpi.org/a-first-move-on-first-source @DCFPI [...]