The next time a politician calls on the state or federal government to trim its workforce – right after promising to “grow jobs” – it might be good for him to remember that one in five working Americans is a public employee. Not only does thinning the public sector reduce the number of services and quality of life enjoyed by taxpayers, it also throws more people onto the unemployment rolls.
Those who see themselves as swashbuckling entrepeneurs or disciples of Ayn Rand do have an alternative to public sector employment in mind – the privatization of work that has historically been performed by government.
In the Public Interest, a nonprofit that researches the dynamics of privatization and government contracting, has just released a study showing in sharp relief the dangers that come with such an alternative. This backgrounder brief is titled, rather unambiguously, “Six Reasons Why Government Contracting Can Negatively Impact Quality Jobs and Why it Matters for Everyone.”
Here are its main findings:
- Contracting out often ends up costing more and lowering service quality
- When governments contract out public work, many good jobs disappear – wages, benefits, and hours decrease.
- Contracting out creates hidden costs for government and taxpayers. (In fact, the report finds that “California spends $10.1 billion every year in public assistance for working families with full-time jobs that paid less than $8 per hour—nearly half of the state’s total expenses on these programs.”)
- Government outsourcing disproportionately impacts African American workers.
- Contracting out hurts families and communities.
- Contracting out leads to greater economic inequality.
The report, prepared by Dr. Janice Fine, of Rutgers University’s School of Management and Labor Relations, concludes that far from representing a waste of public money, government jobs “are a better use of taxpayer funds and a model of secure and decent employment.”