Archive for the 'private-public' Category

Who Should Collect the Garbage?

Just recently a part of Toronto had its garbage collecting services changed from the in-house government run and operated to a collection of different privately owned companies. There were complaints on the first few days of garbage not being collected on time, items missed, and a few other random issues which seems hardly surprising given the scale of the operation. It’s silly to base an argument on one data point- akin to saying that Global Warming doesn’t exist because it’s been a cold summer- analysis on how much better or worse things are will have to wait for time to deliver the data.

What should and shouldn’t be a government service? Sectors that already have private companies working in them and are not a natural monopoly (many different companies can coexist providing for competition) are the easiest to argue for conversion to the private sphere. The argument that services will not have the same level of quality can be addressed by setting metrics that all private companies must adhere to that would be exactly the same as with public management. As long as there are more than one service providers then it will always be easy to terminate a contract when these rules have been broken and bring in another.

The most contentious item in the debate revolves around wages and benefits and how the switch to privatization will lower them both. I see this as a part of the much larger issue of increased income disparity and loss of job security that have plagued Canada and other developed nations since the 1970’s. In 2011 (according to Stats Can) the rate of unionization in the public sector was just over 71% while only 16% in the private one. It is therefore very difficult to make an argument that the tax paying members of the private sector must pay part of their wages to keep the other part of the workforce in better conditions, making the debate “us against them.” If the city is keeping these jobs in the public sphere because it feels that the market rates of pay are too low then what is stopping it from running even more services and expanding to other areas that it currently doesn’t cover? I don’t see how this would ever be politically feasible within the current private and public disparity and so the issue of wages needs to be handled on a much broader level.

Fundamentally this is about how much people get paid for doing a job and if it should be set by supply and demand (number of jobs available and number of people able to do them) or with some other mechanism. Or, the government can change the game by instituting a form of guaranteed income paid for by taxing profits which has the possibility of making the switch from public to private a non issue in terms of wages.

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How is Private better than Public?

From a BBC article on the uproar currently happening in London over the security situation for the Olympic Games just weeks away:

Jennie Kesall, from Manchester, was due to start working for G4S next week but said she was still waiting for her uniform and paperwork.

“On 15 June I was offered a job in Glasgow to work in one of the venues there if I was interested, and I replied saying that I was,” she said.

“Since then I have not heard anything. Also, if I have got the job am I supposed to be going to Glasgow next Monday to start? I have no uniform, passes, contract or confirmation. I have tried contacting them asking for information but I have heard nothing.”

This all from a private company that was hired to supply security for the events. It’s a good example of a private company bumbling along, something that normally is attributed to the government. Companies have failures all the time, it’s just that normally they have competitors in the market with overlapping goods or services so one’s failure is gain for another. This all changes when the industry is a monopoly (which it seems to have been here, or at least it was structured as such) and there are no competitors waiting in the wings to smooth things over.

I would be very interested in knowing how the bid was accepted and if there were benchmarks along the way that the company had to prove they were following. Also who’s going to cover the cost of bringing in all the police and armed forces? Or do the companies just get to take in profits without the risk of losses?