I’m including those portions of total federal costs that will be spent in that immediate area, on people who saw their wages cut or who lost business, etc., from that particular privatization. Yes, I do think that economic hardship in one particular area needs to be accounted as part of the costs.
I’m not assuming that the calculus will necessarily show no savings under every fact pattern. I’m arguing, repeatedly, that most examples of privatization “savings” have totally ignored the calculus altogether. In fact, I’m not sure I’ve ever seen an example of a privatization report that actually considers the totality of the calculus; can you point me to any?
If the costs are being distributed nation wide as with federal benefits, then the subsequent positive impacts should be measured on a wide spread basis. Otherwise the comparison is inconsistent.
I don’t recall seeing a “privatization report” of any kind actually. Usually it’s press releases or public statements like I quoted in post #15. In any event, the depth of the comparison you are suggesting is quite extensive and I doubt it is done with any frequency. Whether or not the calculus was ignored doesn’t speak to the result though.
A good example of this in the commercial world is that most companies above a certain size have in-house lawyers who do a lot of their garden-variety lawyering as a full-time job.
Most companies below a certain size hire a law firm on retainer to do that kind of thing for them when necessary, as it’s cheaper to hire out the legal stuff than to keep a decent lawyer on the payroll as a full time employee.
Smaller county and municipal governments do the same exact thing with professional services all the time- they might hire a civil engineering firm to do plan reviews for proposed improvements, or they may hire a law firm to write the legalese on their water bills, as it’s cheaper to hire that stuff out as piecework than to keep a lawyer and engineer on the payroll indefinitely. But for a big city, they might have enough engineering and legal work to employ entire staffs of engineers and lawyers full time.
Similarly, they may not have enough potholes to require them to actually have a maintenance staff to go around filling potholes, and may just contract with a construction company every few months to go fill potholes.
They’re not going to generally contract out “core” missions though; a city’s not going to contract out fire service or police service, nor will a school district contract out teaching. But they may contract out auxiliary functions that private companies already do- stuff like cafeteria/food service, or maintenance, or bus service, as those companies already presumably have the experience, equipment and economies of scale to do the jobs as effectively and probably cheaper than having in-house people do it.
Also bad calculus; presumably at the peak, the department was still understaffed - so they had 100 unit but at peak needed 110. (Otherwise - yes, they are horribly overstaffed). So they won’t be paying for 20 units in peak, they’ll be paying for 50. Ah, you say, but the rest of the time they don’t pay! No, the county (i.e. the same bundle of taxpayers, pretty much) does. In order for the sheriff to supply 50 units - everyone in the county suffers shortages during peak, AND the sheriff’s department needs to have those 50 extra bodies.
this is where the Rob Ford types used to say “it’s all waste -we’ll cut the fat!” (Have you seen pictures of late Mayor Rob Ford?) In fact, with decades of budget constraints VERY FEW government agencies are floating in unnecessary bodies. They typically run excessively lean and service suffers all the time. So - the math rarely works out to a total savings; the extra costs are hidden outside the calculus.
And so instead, the state lets some contractor screw over its workers instead. Or they are all signed to 6-month recurring contracts, and never have the income and job security to buy a house or car. The economy suffers. And these people look enviously at government full-time workers. So the pandering politicians tell them “the government workers are evil and sucking your taxes out of your bloodstream” instead of saying “you should make a living wage”.
You can’t have it both ways - should workers have stability, a good wage and 40 hours a week? Or should they be expendable with 30 days’ notice?
My dad was fairly conservative, but he once told me that - forget “How Green Was My Valley” nostalgia. the reason Churchill got the boot, the reason Labour won in Britain after the war, the reason all the coal mines were nationalized and when Thatcher tried to change that, it became all-out war; every day, the coal miners would show up at the mine head. The foreman would decide if you got to work that day. The reasons could be varied - if you spoke out too loudly with an unpopular opinion, if you mouthed off to the foreman, if your wife had offended some big shot’s wife at the market, if you didn’t quite meet quota, if the foreman’s nephew wanted to work instead, or maybe you supported a different soccer team - sorry, you don’t work today. You can starve for a week and we’ll see if your attitude improves. That’s the work atmosphere that gave the western world trade unions. We seem to think we’re past that, but each day that goes by it seems we are returning to that life.
Not in my example. That’s the beauty of making assumptions. I assume the need is…call it 65 and the conclusion changes dramatically. In any case, the point of the part you quoted was that the assumptions made can tip the calculus one way or the other.
You’re doing the same thing here - acknowledging there are multiple factors and assuming that they work out to support your position. I could rephrase and say this:
*So - the math rarely works out to a total cost increase; the extra savings are hidden outside the calculus. *
IME businesses are typically nimbler than government wrt to purchasing and HR matters. But I only have my own personal anecdotes. E.g. It took my friend at NIST nine months to buy an instrument that I had ordered in two days.
I’m not sure where you live, but in the US most workers don’t have that kind of stability. I do not know a single person in private industry who works under a contract except for union members (and only about 11% of US workers are union members). Most non-union jobs do not involve contracts- athletes have contracts, CEOs may have contracts but most people don’t. They are currently expendable with no notice. Without a contract of some sort, no notice is required except in unusual circumstances* - and yet people buy houses and cars all the time.
There are laws that require notice for mass layoffs or shutdowns, but they generally apply only to employers with more than a certain number of employees (usually 75-100) , who are laying off more than a certain number or percentage of employees at a single site and even then , there are exceptions.
Of course, we’re all pulling numbers out of assorted orifices. If the Vallejo cost was 100 units and they can get by with 60+25 (your example), then by definition they are overstaffed. Don’t even need to designate an overflow service to generate an automatic 15 savings right off the bat. This was the logic that got Rob “crack mayor” Ford elected - “I’m going to cut the waste and the gravy train”. The fact is the majority of civil service is just the opposite - horribly understaffed and underfunded.
Yes, Canada falls midway between “screw the workers” USA (inappropriately named “right to work”) and the “job for life” civilized world of Europe. You can lay off anyone here, provided they are not a protected class or on maternity leave for their year. However, it will cost you - at least 2 or 3 weeks’ pay, possibly more depending on the circumstances, to a maximum of up to 24 months’ pay in the extreme.
But my point was, that was what middle class (or what used to be middle class) has been losing with the erosion of the power of unions. Unions in the western world were not some communist plot - they were a direct reaction to how unrestrained bosses would treat employees.
The experience in the UK is that privatisation is made to pay partly by screwing down pay, working hours and conditions for the people who actually do the job (we’re currently getting more than a few horror stories about sub-contracted home care services), and partly by loading up debt, so that the taxpayer seems to get their lovely new hospital on reasonable terms for the first few years, but somehow those reasonable terms just keep on needing to be paid long after the contracting company has made a reasonable profit on the deal. An awful lot of rings have been run round the civil servants over the years.