Wednesday, September 14, 2011

Study Confirms “Privatization Is a Recipe for Disaster”

The American Federation of State County and Municipal Employees, AFL-CIO (AFSCME) was stunned to learn today that the United States government has spent billions of dollars hiring contractors rather than government employees. According to a study released today by the Project on Government Oversight (POGO), the federal government spends approximately $320 billion a year on contractors.
“In the wake of the worst recession in our lifetime, federal, state and local governments should not be doling out billions of dollars to private contractors to perform services that can be done more efficiently and at lower cost by public workers,” stated AFSCME Pres. Gerald W. McEntee. “Privatization has always been a recipe for disaster. This study confirms what AFSCME and its allies have been saying time and time again; privatizing services leads to cost overruns and in most cases a lower quality of services.”

The POGO report comes after months of criticism and brow beating by Republicans who claim that outsourcing and contracting is more cost efficient than hiring federal workers. Their claim, that hiring federal workers is too expensive with salary and benefits combined, was refuted by POGO that showed contractors in computer engineering and human resource management earn $120,000 to $130,000 more on an annual basis.

“The only ones benefiting from privatization are the private companies and the campaign coffers of the politicians who push for privatization. Study after study shows that privatization does not deliver the savings for taxpayers promised by its proponents. Public accountability is lost and contractors take advantage of the system to profit at the expense of the public,” added McEntee.

The full study can be viewed here:


“As public services are shifted to the private sector, we move from an open accountable system to a shadow government easily subject to manipulation. Instead of hiring friends, donors and lobbyists, the federal government should look to talented workers who are out of work, maybe then we could eliminate the waste, balance the budget and get our economy moving again,” concluded McEntee.

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