Privatization of Everything : How the Plunder of Public Goods Transformed America and How We Can Fight Back (9781620976623) by Cohen Donald; Mikaelian Allen

Author:Cohen, Donald; Mikaelian, Allen
Language: eng
Format: epub
Publisher: Lightning Source Inc
Published: 2021-07-15T00:00:00+00:00

16

Privatizing Pays Us Less

FOR MANY AMERICANS, THE MOST VISIBLE SAFETY NET IS ONE THAT TIES them directly to employers, who control their health insurance and sometimes their pensions. It is a net that is always in danger of being whisked away, as tens of millions of Americans found out when they lost their jobs in the early months of the 2020 pandemic.

When union membership was the norm in the private sector, in the 1950s and early 1960s, the public decided that public servants would get a stronger version of this frail safety net even before public workers secured the right to collectively bargain. Public-sector jobs, even low-paying ones, came with decent benefits. This was practical—it helped attract and retain workers, and it boosted the economy by giving the middle class a stable core—but it was also the right thing to do. Public servants make all our public goods possible.

Privatization dismantles this corner of the safety net and transforms it into ludicrous executive salaries. Carol Sanders used to make $15 an hour as a cafeteria worker in the New Orleans public school system, where she had twenty-eight years of experience. Then the food service giant Aramark claimed it could improve efficiency and save the district money; what they really had their eyes on were wages and benefits. Aramark won a contract, Carol saw her pay cut to $9 an hour, hours cut in half, and benefits stripped. She went on food stamps to survive. Not long after, Aramark cut her position. A year or so later, Aramark CEO Eric Foss raked in $18 million in compensation.1

A New Jersey study on the effects of privatization on people like Carol found her case was not unique. Of all the state’s employers, food-service contractors had the highest percentage of employees on Medicaid. So as we privatize and help transform living-wage salaries into starvation-level salaries, and as the cost savings are channeled into CEO bonuses, we are left picking up the tab through taxes for additional Medicaid recipients.2

In Chelmsford, Massachusetts, school district custodial jobs went from $19 per hour before privatization to between $8.25 and $8.75 after privatization. In Milwaukee, Wisconsin, housekeepers earned between $14.95 and $15.75 before privatization. After privatization they earned $8.00 per hour with no benefits. In Grand Rapids, Michigan, privatization took nursing assistants from between $15 and $20 per hour down to $8.50 per hour (while the contractor billed the state at $14.99 per hour). And the list goes on.3

Through similar privatization arrangements the U.S. federal government has become the largest low-wage employer in the country. A 2013 study estimated that at least two million Americans who work for government contractors earn less than $12 dollars an hour. As the study’s authors pointed out, “This is more than the number of low-wage workers at Walmart and McDonald’s combined.” A follow-up study in 2018 concluded that 4.5 million government contractors were making less than $15 per hour. This included textile workers who make uniforms, health care workers who look after Medicaid patients

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