Class Warfare, American Style–Part II–Privatize, Deregulate, Outsource & Offshore
Privatizing, deregulating, outsourcing and offshoring of various functions have become major goals for conservative forces in America. They all serve to concentrate wealth and power in the hands of a small percentage of the populace at the expense of the rest while claiming to increase efficiency, lower costs and grow the economy. They all neglect the purposes for which the activities were made public or regulated to begin with. They cost real people good paying jobs, endangering the health and wellbeing of themselves and their families. Inequality in income and wealth is increasing as a result, along with a real drop in the opportunity for advancement by the vast majority of people in our society.
One area where privatization has seen a push in recent years is public education reform. Prisons have been another target for corporate takeover of government functions. Both provide major public services affecting society as a whole. Privatization is seen as a way to lower costs, which in most cases is accomplished by reducing labor costs. Public employees are far more likely to be unionized than private. Busting the unions is seen as one way to lower labor costs, in terms of both employee wages and benefits. The goal of a public institution is to perform a service for its people. In these cases, education of its citizens or incarceration of those convicted of crimes. The goal of a private corporation is to produce profits for its shareholders. The latter and the former cannot often be reconciled. Cost-cutting methods often do not achieve the desired results of incarceration or produce better-educated students. Public money spent on education is supposed to somewhat equalize opportunity for children from lower socioeconomic circumstances, not give more profits to the already relatively well off.
Outsourcing is often accomplished through contracting certain functions of the institution or business to other companies. For instance, food services at institutions may be contracted out to private firms who then employ workers who receive different wage scales and benefit packages than their regular employees. They work for the contractor rather than directly for the institution itself. I’ve seen this first hand working for the University of Vermont, which contracted out its food service operations to Marriot, which had nowhere near the wage and benefit package available to regular University employees. Besides wages, health benefits, sick leave and retirement packages were greatly reduced. Other institutions have done the same with their bookstores, contracting with Barnes & Noble, for instance. Housekeeping and janitorial services, as well as building maintenance and grounds keeping are also areas where such practices are used. This may seem like a perfectly innocent practice. It certainly lowers costs for the institution or corporation using it, but it is very costly to the workers who lose jobs or take new ones doing the exact same thing for less pay and other benefits.
Outsourcing of some functions can be achieved through technology or other means in such a way that the jobs are eliminated entirely in one place and replaced functionally in a different city, state or country. Large corporations are notorious for their ability and willingness to shift production, etc. to other locations to take advantage of lower labor costs. Shifting production to countries or states which have lower standards for working conditions and wages, as well as environmental restrictions, has become common. Tax policy often even encourages such corporate behavior. Advances in technology seem to favor the executives and stockholders far more than the workers, who are often replaced in the process, either by machines or by cheaper labor.
Free trade agreements are often sought to primarily make it easier for companies to maximize profits in this manner. Offshoring has become the norm for corporations wanting to produce goods as cheaply as they can while maximizing profits. How this affects workers in this country or abroad does not enter the equation for the corporate bottom line. Apple Computer has been in the news recently as the poster child for such business practices, but they are far from alone in this. Such agreements may result in a race to the bottom, where labor protections fall to the lowest level available and wages and worker well-being are dragged down everywhere as a result.
Deregulation is another battle cry for the modern corporate moguls. Government regulations are stifling the operation of the “free market” and holding back economic growth. In fact, deregulation in the financial sector has resulted in the worst economic collapse since the Great Depression. Giving free-reign to Wall Street to conduct its business in order to amass great amounts of wealth with little or no personal risk is a recipe for further disaster. The architects of that collapse have not only not been criminally prosecuted, but their corporations were further bailed out by the taxpayers because they were too big to fail without making matters even worse for the rest of us. Privatizing profits while socializing losses is hardly fair. A few win and everybody else loses? Is that “Free enterprise”? Not for those of us paying the bill.
Likewise, the call for lessening regulations designed to protect us from the negative environmental impacts of corporate activities such as mining, drilling and burning of fossil fuels pays absolutely no attention to the full real costs of their way of doing business. Short–term profits for a few at the cost of long-term damage to the planet do not make sense to the society as a whole. Just because we cannot easily monetize the costs of polluted air and water does not mean they do not exist. We all need to be protected from such bottom-line profit calculations, because those profits do not exist without negative consequences for all of us.
All of this serves to make me scoff at the assurances of those pushing to increase the use of these private profit driven policies that they will make the world a better place for us all. They are designed to make it easier on those who already have it comparatively easier to pursue happiness and health in this country and planet. They are also not sustainable very far into the future. For that we need less, not more privatization, deregulation, outsourcing and offshoring, to allow humanity as a whole to advance, rather than just a select lucky few.