- By: Chamber President & CEO, Al Smith
There is a lot of loud debate going on at City Hall. Mostly it’s from union members regarding the prospect of outsourcing City residential garbage collection. You heard a similar outcry previously, when commercial garbage was outsourced earlier in the year.
What is going on here? Is there a war against city workers? It’s not personal but there are a number of things at play.
First – the City has a budget crisis. Too much money going out; not enough coming in.
Second – should taxpayers give superior support to people who work for their government versus what people in private industry would charge?
Thirdly – can private workers do the job quicker and less expensive than public workers?
Fourth – who is the appropriate worker segment to take care of citizen’s needs – private or public employees? Has that been ordained by a higher power and if so “where is it written”?
There is ample evidence that taxpayers are strapped with paying government workers higher wages, that these workers are given more liberal benefits and have stronger job security. All while taxpayers may not be getting back the most efficient performance possible.
A 2009 Bureau of Labor Statistics report indicates that government employees earn 44% more than private employees ($39.60 versus $27.42 per hour). These employees also get 69% greater benefits compared to private employees. Most can retire as early as age 50 or 55 years with pension benefits pushing 90% of their final salaries. Health coverage, paid for by taxpayers, is also included for the entire life of the employee and their dependents. Keep in mind that those lives could extend another twenty to thirty years.
Two other things I’d like to include for consideration. A public employee has great job security, making it practically impossible to lay anyone off in a downturn, even in cases of poor performance or unethical activity.
And then there is the question of efficiency. Budgets are usually more wasteful when they are determined by political means rather than those in the private sector, which are driven by economic means. As to employee performance, the BLS reported that private sector employee worked 12% more hours than those in the public sector.
Based on the above information and the current challenges of finding the funds necessary to operate city services – is there a place for outsourcing and if so, how much?
Sandy Springs, Georgia is an interesting example.
At a population of close to 100,000 Sandy Springs outsources almost everything – with the exception of fire and police. Even their City Hall is a rented suite of offices in an industrial park. Trash collections are done by a company based in San Francisco; business license are processed by a company headquartered in Coventry, England. They outsource road repair so they they don’t have a fleet of vehicles or a yard to park them in. Their 911 and dispatch is operated by a private company based in New Jersey. There is no long-term debt; no pension obligations and there are only seven people on the City Hall staff including City Manager John McDonough, who proudly claims that Sandy Springs enjoys a healthy balance sheet and gets high marks from residents when surveyed about quality of life and quality of government services.
We may not want to go as far as Sandy Springs, but we also shouldn’t reject the idea of searching for a better way to do things. It is always when times are difficult that innovation and creativity becomes necessary.
And for sure, we should not continue the bad decisions of our politicians-of-yesteryear when they awarded such lucrative resources to government employees. After all, nowhere is “it written”.