Public Employee Press


Editorial
Thwarting privatization

Back in the 1990s, privatization was the rage as states and cities sought to reduce the cost of public services.

But too often, privatization has led to corruption, a lack of accountability, shoddy services and replacing unionized public employees with poorly paid workers.

So these days, some state and local governments are rethinking privatization and bringing work home.

A recent report by In the Public Interest, a Washington, D.C.-based research group, examines the record of privatization and suggests policies to deal with the social and economic problems associated with it.

"How Privatization Increases Inequality" shows how major corporations and smaller contractors rake in millions upon millions of dollars while providing poor services, exploiting workers, cutting assistance to the needy and worsening socioeconomic and racial segregation.

What should state and local governments do?

The report makes four recommendations:

• increase support for public services and assets-infrastructure, schools, and anti-poverty programs.
• do cost-benefit analyses to determine how privatization proposals will affect workers, services, residents and businesses.
• require contractors to show that cost savings won't reduce the compensation of workers. Contractors must agree to pay a living wage and provide decent benefits.
• track spending on contracts, increasing transparency of the contracting process, and examining the impact on wage rates and employment.