More On Why Not To Privatize Municipal Services
March 17, 2011 Leave a comment
…privatization often does not solve cities’ budget woes. Research shows that when municipal services are contracted out, costs can actually increase while service quality suffers. Sometimes these cost increases are experienced as contract cost overruns. Other times a city may fail to take into account “hidden costs” such as the administrative costs of seeking proposals, evaluating bids and monitoring the work. Hidden costs for the community can include reductions in wages and health benefits under private contractors, which drive more people onto public assistance and bring down wage and benefit standards in the field and in the community.