‘Privatization’ Is a Blunt Weapon Against Minorities

The U.S. Supreme Court majority, which has been unsympathetic to the historic aspirations of racial minorities, is not the only “uncivil” legacy of the Reagan Administration. Another right-wing obsession, the “privatization” of public-service jobs, is also having a pernicious impact on what had been, until the Reagan years, a dramatic expansion of the minority middle class.

With a singular determination and fervor, the conservative majority of the Los Angeles County Board of Supervisors is following the Reagan policy by attempting to place virtually every county service, from hospitals to airports, in the world of private profit.

With 80,000 workers, the Board of Supervisors is the single largest employer in the county. Minorities make up 60% of the county work force. Of the total county work force 30%, or 20,000, are black; 18%, or about 13,000, are Latino, and nearly 26,000 are minority women.

Black and Latino workers, confronted by private-sector discrimination, have traditionally found an avenue of escape from economic circumscription through government employment. Equal opportunity and affirmative-action gains in the ‘60s and ‘70s brought more hiring and advancement opportunities for minorities in public employment. Collective-bargaining agreements helped ensure wage-and-benefit packages higher than those generally accessible to minority workers. Public employment has been, and remains, a principal engine of minority economic progress.

This progress is being derailed. Recent U.S. Supreme Court decisions have provided new opportunities for employers to discriminate. And “The Widening Divide,” a recent study by UCLA, has found that the cost of being a minority worker has increased over the past two decades. Even after accounting for education and experience, black men earn 30% less than white men. The gap between Chicano men and white men has grown from less than 10% in 1970 to about 20% in 1987. Not surprisingly, black family income has stagnated for 20 years; Chicano family income is declining.

Against this backdrop, privatization and the subsequent conversion of decent-paying public jobs to low-wage private jobs must be viewed, at best, as studied indifference to equal-employment opportunity and also as a contributor to the suppression of black and Latino income. To date, the Board of Supervisors has contracted out 4,000 jobs, with thousands more scheduled to be privatized within the next two years.

About 5,000 clerical jobs, largely held by black and Latino women, will soon be privatized, too. This summer, nearly 50 such jobs were “sold” to a private vendor, who will pay his new workers up to $700 less per month than the county, which pays $1,900.

Thousands of temporary contract workers, the fastest-growing segment of the county work force, are replacing full-time workers. The vast majority are paid $4 to $6 per hour and receive no benefits, constituting a new “working poor,” who must turn to public agencies and private charities for health care, food stamps and other necessities. Ironically, money that taxpayers are allegedly saved by contracting out services will likely be more than offset by the increased cost of publicly financed income subsidies.

If minority and other public-sector workers lose, do minority and small businesses at least gain from this county budget pork-barrel? They do not. The county has no affirmative action or small business “set-asides,” and small business entrepreneurs cannot afford to underbid industry giants.

Privatization does not even meet its short-term objectives of efficiency and cost effectiveness.

In this year’s review of the state budget, California’s chief legislative analyst held the privatization plans at least 50% responsible for the loss of $22 million in revenue to the state, $3 million to Los Angeles County and $25 million to poor families who would have received support had services been adequately performed.

In fairness, it must be added that privatization horror stories concern not just Los Angeles County. The local media recently reported on the “hellish” road trips of prisoners transported by private guards. In one incident, a woman prisoner filed a lawsuit claiming one of the guards had raped her. The same company recently got an exclusive contract with the California Department of Corrections to transport prisoners to state institutions.

Privatization is bad economics. In the short run, there is evidence that it is more costly and less efficient. In the long run, the ultimate, and not so hidden, cost is the slow impoverishment of minority workers and their communities. Until now, the privatization discussion has been dominated by its proponents’ questionable claims of cheaper public services. Against the landscape of deepening economic troubles for minority and all middle- and low-income workers, the real issues must be the quality of those services and the role of government in furthering economic and social justice.