As states, cities and counties struggle with fiscal crisis, budget cuts, furloughs and layoffs have threatened many government workforces. But even before the recession hit, the downsizing of the civil service was well underway, driven by a belief that for many critical jobs, privatized government is better government.
The Obama administration may have just tipped the scales back toward a more rational concept of the kind of work that should be reserved for federal employees, as opposed to contracted out.
In response to a longstanding debate about what jobs should and should not be outsourced, the administration on Wednesday published draft guidelines that seek to clarify which services should remain in-house. The central idea is that for those jobs that require a certain kind of expertise or familiarity, as the Washington Post’s Ed O’Keefe put it, “such tasks are so directly tied to the public interest that they must be done by government workers.” Interestingly, both contractors and federal employees, along with government watchdogs, may look forward to the new focus on delineating the proper domain of the state sector.
John Gage, president of the American Federation of Government Employees, told the Post, “the administration ‘can ensure that the private interests of contractors will finally be subordinate to the public’s interest in accountable and efficient federal services.’”
The logic behind privatization is that some tasks are more easily or quickly accomplished if outsourced to outside firms—for instance, contracting a private IT firm to wire an agency’s office, instead of going through the civil service hiring process. But all levels of government have been shaken in recent years by the emergence of an anti-big-government, pro-corporate ethos that critics see as a campaign to dismantle the integrity of the government workforce.
The Bush administration held up privatization as the answer to inefficiency and waste in government, seeking to reform regulations to promote the shifting of government work to private hands. The AFGE denounced the measures as a blatant end-run around organized labor:
the Administration is at war with the working and middle class Americans who make up the federal civil service. As evidenced by the debate over legislation to establish a Department of Homeland Security, if Administration officials can’t bust their unions, or eliminate their civil service protections, then they’ll privatize their jobs. The ultimate goal of the Administration is to transform the civil service into a “spoils system”, which would consist of a largely union-free workforce of poorly-compensated contractor employees with no protections against politically-inspired dismissals and discipline.
Over the years, investigations by the Government Accountability Office have piled up evidence of corruption and dysfunction that would rival any stereotype of the shiftless, paper-pushing bureaucrat. GAO has identified serious deficiencies in the auditing process for defense contractors and recently concluded that the broken monitoring system had created “vulnerabilities to fraud, waste, abuse, and mismanagement that leave hundreds of billions of taxpayer dollars at risk, and underscore the importance of a strong contract audit function.”
Despite these abuses of public funds, aggressive shrinkage during the 1990s led to a loss of 13 percent of the federal workforce between 1990 and 2004, according to the Office of Personnel Management.
The Economic Policy Institute calculates that “Although the number of directly employed federal workers has remained steady at 2.7 million since 2000, federal contract workers have grown from 1.4 million to 2.0 million.” Meanwhile, “Federal contract spending — the money federal agencies pay to private businesses for goods and services — has increased 69% (to $415 billion) between FY 2000 and FY 2006.”
Shortly after taking office the Obama administration vowed to tighten the reins on runaway contracting, declaring that “American people’s money must be spent to advance their priorities, not to line the pockets of contractors or to maintain projects that don’t work.” In March, the White House hammered out final rules for a new database for tracking federal contractors (which the Project on Government Oversight said was a meaningful but rather toothless step toward reform).
Taking on the government-industrial complex, though, will require the political gall to challenge the myths of private sector efficiency at huge agencies like the Pentagon. It may also set off legislative battles between privateers and those pressing to restore oversight.
It also requires confronting serious inequities in the way privatization impacts the workforce as once-stable jobs get siphoned off into private hands. Using a basic living wage for a family as a benchmark, the EPI estimated, “in 2006, nearly 20% of contracted employees earned wages under this benchmark, while fewer than 8% of federal employees did.” Both blacks and Latinos made up a disproportionate share of estimated poverty-wage private-sector workers. The EPI found that “(b)ased on the composition of the private-sector workforce that earns below poverty threshold wages, we can safely assume that these workers are disproportionately minority, female, and unlikely to have employer-provided health coverage or pension plans.”
At the community level, AFSCME and local activists have called out officials on contracting scandals that suggest a pattern of raiding public coffers for private gain. From a taxpayer standpoint, says the In the Public Interest campaign, the privatization of services ranging from trash collection to prisons to teaching has resulted in “lost accountability and transparency, increased costs for government and taxpayers, and degraded quality.” For workers, it greases the skids for “corruption, reduced access [to services], reduced labor standards, lost public capacity for core functions, environmental harm, and human and civil rights violations.”
Sadly, in state budget battles, a lot of the political assault on unionized civil service employees exploits the relative security afforded by government jobs. Turning these workers into easy political targets reveals how calls to starve government can be used to divide workers rather than promote a common agenda of equity in both the private and public sectors.
The Center for American Progress says the contracting procedure could be made smarter and more ethical through measures like “Incentives to raise wages and benefits above the legal floor” and “Careful review of decisions to contract out” in the first place — the crux of Obama’s new initiative. Will the concept trickle down from Washington to state houses verging on fiscal collapse?
It’s true that federal workers in many cases may fare better than their private-sector counterparts in terms of wages and benefits. It’s also true that the government can use its leverage not only to protect its own workforce but to make its contracted work adhere to higher standards that should counter the erosion of labor protections in private businesses. If there’s one employer whom unions, taxpayers and officials should expect to rise above the race to the bottom, you’d hope it’s Uncle Sam.
Michelle Chen is a contributing writer at In These Times and The Nation, a contributing editor at Dissent and a co-producer of the “Belabored” podcast. She studies history at the CUNY Graduate Center. She tweets at @meeshellchen.