The philosophy of privatization—that private is always better than public—has driven many elected officials to give government jobs to contractors. There is scant consideration of the social and economic implications: the quality of service delivery, employee morale, or public policy goals like the creation and preservation of good, family-supporting jobs across the city or state.
Spending Taxpayer Dollars to Lower Wages and Destroy Jobs
Privatization advocates tend to focus their arguments on price, rather than service or public policy. This sets up an immediate incentive to destroy middle class jobs that have been created in the public sector. The pressure to come up with the lowest bid also encourages contractors to seek out subcontractors at ever lower prices, thereby feeding the global search for cheap labor.
For instance, in 2002, a contractor moved work for the New Jersey Department of Human Services to Bombay without the state's knowledge. The State of Washington discovered this year that 29 of 41 state agencies and higher-education institutions had sent work abroad.
The pricing pressure has also been evident in contracts for call center work. Every state but Montana and the District of Columbia has contracted out parts of the electronic benefits transfer (EBT) system. Contractors for as many as 41 of these states send some of this work offshore. In other words, instead of keeping good, stable public sector jobs in our communities—the very kind of jobs that help people get off and stay off welfare—almost every state contracts them out.
It's not just call center work that is up for transnational competitive bidding. States are sending other types of work offshore. Input Research has estimated that states were offshoring $10 billion of information technology services in 2003 and that number would increase to $23 billion within 5 years.
So, what can we do about it?
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