Sample Speeches and Testimony

Sample Speech Against Privatization

[This speech makes the major arguments against privatization. You can put the specific details of the proposals you’re opposing in the sections dealing with cost, quality, economic impact, ineffective government and the danger of corruption.]

We urge you to take a hard look at the proposal to privatize public services in our community.

It’s a good deal for the politicians who proposed it — and the private companies who contribute to their campaigns.

But it’s a bad deal for the rest of us — everyone who pays taxes, depends on public services and wants a strong local economy that offers opportunity for working families and the promise of a better life for our children.

Make no mistake about it:

Privatization will cost more than they’re telling us.

It means cutting corners on quality.

It will hurt the economy in our community by getting rid of people’s jobs.

And, to make things even worse, it will make our community more vulnerable than ever to the political corruption that steals the taxpayers’ money.

Sure, they’re telling us that privatization will save money.

That’s because the contractors usually low ball their bids to get their first contracts.

But, once they get their foot in the door — and once they get their hands on the taxpayers’ money — we all had better watch out.

It usually costs more for private companies to provide public services because these companies have to make a profit. And they usually pay their top executives huge salaries.

On top of that, privatization will make government have to spend more money — not less — just to manage the contractors.

There will be more bureaucracy to handle the bidding process and administer the contract.

Public employees will have to train and even supervise the contractors’ employees.

And, more often than not, they’ll also have to correct the contractors’ mistakes — or even finish the job for them.

While costs will be going up, the quality of public services will be going down.

That’s because contractors cut costs by cutting corners. They hire inexperienced workers at low wages. They don’t supervise them the way they should. And they try to do as little as the fine print of their contract allows.

And these aren’t the only ways that privatization takes a bite out of the quality of public services.

In many ways, it’s a terrible mistake that government can never completely correct.

When they privatize their services, government agencies rely more on the contractors — and less on their own experienced employees.

Soon, regular employees start to leave — and it’s hard to find good people again.

And, then, public officials get used to shrugging their shoulders and saying these services aren’t their responsibility any more — go complain to the contractor — or pay for them yourselves.

One thing is certain: This all is going to hurt the economy in our community.

When government agencies start laying off their regular employees, everyone in this community is going to suffer.

We’re going to lose the taxes these workers pay. We’re going to lose the money they spend right there in our community. We all may have to pay for unemployment benefits or even public assistance until these workers find new jobs.

And the money we pay the contractors won’t benefit our community in the same way.

A lot of that money is going to go out-of-town — where the contractors’ corporate headquarters are — to pay their employees, their executives and their shareholders.

We’ll never see that money again — that’s for sure.

They’re likely to offer fewer career opportunities — because the big jobs will be reserved for people from out-of-town.

They’re likely to offer fewer opportunities for women and minorities.

And they’re likely to prevent their employees from organizing and bargaining for better pay and opportunities — the only way that people from our community will ever have a say in how these companies do business.

As if this all isn’t bad enough, privatization can cause corruption.

Sometimes, contracts can be "wired" by public officials to make sure their special friends get special deals.Usually, the companies that want contracts are the same companies that contribute to political campaigns — and that’s one more cost that the taxpayers will have to pay for.

This all runs the risk of corruption of all kinds:

Bribery. Kickbacks. Conflicts of interest. Billing the taxpayers for work they never did. You name it — it all can happen here. Unless we stop privatization dead in its tracks. That is why we urge you to take a careful look at privatization and to reject it before it’s too late.

Sample Testimony Against Privatization

Good afternoon. I’m pleased to have the opportunity to speak today. My name is ___________. I represent the American Federation of State, County and Municipal Employees (AFSCME), a union of 1.3 million employees, predominantly in the public sector, across the U.S.

For many years, AFSCME has closely monitored and documented the problems that come with attempts to privatize government services. I’m going to quickly run through some of those problems, especially in social services. The bottom line is that in our experience, privatization very often fails to save money or improve services, which are the major claims of its advocates. In many cases, privatization is more expensive and less effective, and creates unexpected and unmanageable problems. Private entities do not always, if ever, have society’s interests at heart.

In a far-reaching 1996 study, Working Together for Public Service, the U.S. Department of Labor (DOL) pointed out how hard it is to even measure costs and quality of public and private services. The study found that "contrary to much of the popular discussion, private sector costs are not necessarily lower than the cost of providing the service within the governmental structure."

The study added that "Contracting out does not appear to be as quick or easy as is often suggested. Monitoring contracts of complex, hard-to-measure services is far more difficult than traditional contracting or purchasing. Many public jurisdictions do not have well-established means to set effective bid requirements and conditions, to thoroughly evaluate the bids and then to measure performance." In other words, claims of huge privatization savings may be a mirage

Bids and contracts often ignore or underestimate cost factors including the bidding process itself, transferring control to the private operator, administering the contract, inspection and monitoring, and so on. This does not even include the prospect of long-term price hikes if the jurisdiction becomes dependent on the contractor, to say nothing of the "social costs" imposed on workers and communities when wages or benefits shrink or profits are taken out of the economy. As for quality, as the DOL study makes clear, rigorous before-and-after measurement is difficult at best.

In the case of Lockheed Martin IMS, however, it appears that many cost over runs and quality declines are just the plain old kind, i.e., over runs even on the contract cost itself, not counting indirect costs, and quality declines that even the company has conceded. For instance, in a California child support enforcement contract, the company was to have set up an automated system by 1995, for $99 million. In November of 1997, the state canceled the project, facing a $200 million cost overrun, and with less than half the counties served by Lockheed’s new system.

Various county officials commented on the problems Lockheed’s system caused while it was running, including one remark that staff were "spending more time identifying problems than actually handling cases." Lockheed’s liability was capped at $4 million; taxpayers paid the rest, for a system that didn’t even work. The state and the firm became embroiled in legal disputes and a media "blame game," with Lockheed defending its performance while conceding problems.

Another cost and quality disaster for a jurisdiction contracting with Lockheed Martin came in Florida, where the company and another firm, Maximus, were granted contracts to streamline child support data and make collections. The two firms were paid $4.5 million for their services, while they only managed to collect $207,000. Most of the payments to the firms came from variable fees, ranging from $50 to $300, for closing cases, which frequently meant simply correcting files or deciding that many "deadbeat parents" could not pay for whatever reason.

While the state’s real interest was actual support collections, the firms had insisted on case closing fees, arguably to cover their operating costs. When great difficulties in making collections became apparent, the firms focused even more on the closing fees. Moreover, the firms tried to use the state’s own databases to close cases en masse, then billed at the maximum level. Even with these fees, which one state staffer called "freebies," both firms terminated their contracts early, saying they couldn’t make profit on the project — their real concern from the start.

Another problem with contracting out government services is the potential for conflicts of interest, influence-peddling, and outright corruption. In Washington, D.C., for example, the FBI began investigating allegations that former high-level city employees who had gone to work for Lockheed Martin IMS had structured the city’s parking-meter contract so that Lockheed would have an advantage. An unsuccessful bidder filed a complaint, after which Lockheed forged a partnership with that bidder to get the contract. The allegations of impropriety went unresolved.

There have also been conflict-of-interest problems in Los Angeles, where another parking-meter contract was controversial because of contributions the company made to officials, in New York City, where the company was barred from parking contracts because of alleged bribes and kickbacks, and in Texas, where a number of former state officials went to work for Lockheed, prompting some to wonder if the Texas welfare reform privatization project wasn’t "wired for Lockheed Martin." The "revolving door" phenomenon puts the fairness of privatization in doubt.

Even in the best of all possible worlds, if everyone involved is honest and above board, it is impossible for companies like Lockheed Martin to ignore the profit motive — literally putting the interests of shareholders before those of the public. Also, even in so-called "good" contracts, government entities lose much of their capacity to perform work and serve citizens. If there are problems with a contract, and citizens seek some kind of redress, the government is reduced to being essentially a middleman, going to the vendor and hoping the vendor will fix the problem.

There are literally dozens of other examples of Lockheed Martin IMS’s problems with social services contracts, as well as problems with the parent company’s defense-related lines of business. (IMS is a subsidiary of Lockheed Martin.) Many of these cases are summarized in a report AFSCME has produced, covering the miscues and failures of Lockheed and other vendors.

I believe these cases are really sounding warning alarms about the problems overall with contracting out government services, particularly complex and vitally important functions like social services. As I’ve indicated in my brief comments, privatization has frequently failed to show improvements in costs or quality; in fact, it has often proven to be costly, ineffective, or downright corrupt. Companies like Lockheed Martin are better at, and more concerned with, producing profits and looking out for their own interests than in helping society achieve its goals.

Sample Testimony Against Privatization

NEEDS OF FUTURE WORKFORCE

GERALD W. MCENTEE

06/24/1998

TESTIMONY GERALD W. MCENTEE INTERNATIONAL PRESIDENT of the AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES (AFSCME) before the U.S. HOUSE OF REPRESENTATIVES COMMITTEE ON EDUCATION AND THE WORKFORCE SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS ON MEETING THE NEEDS OF THE 21st CENTURY WORKPLACE JUNE 24, 1998

Mr. Chairman, my name is Gerald McEntee, and I am International President of the American Federation of State, County and Municipal Employees (AFSCME). AFSCME represents 1.3 million federal, state, and local government employees as well as workers in health care and the private sector.

I want to thank you for your invitation to appear here today to discuss ways to make the public sector workplace more productive. AFSCME has welcomed the movement for deep and lasting change in the way government operates, and we are proud to be part of that movement in many parts of the country.

Nobody is more frustrated with bureaucratic inefficiencies than the front-line workers who we represent, and nobody is in a better position to improve the quality of public services than those who perform the work. For years, we have been saying,

"Listen to us, we know what’s wrong, and we know how to fix it," only to be told that this is none of our business. Well, it is our business and we’re doing something about it.

The simplistic, quick-fix approaches often proposed for "reinventing" government — layoffs or outsourcing, for example — do not address the underlying challenges of delivering services in an increasingly complex and demanding environment. Privatization and downsizing are not new concepts, and they treat front-line workers as part of the problem when, in fact, they must be part of any viable solution. Truly redesigning government requires policy-makers, and the union and its members, to break with the past and work constructively together to improve the efficiency and effectiveness of public services.

In order to be successful, the process of redesigning government should be based on certain principles. They are:

• Facilitating employee involvement and empowerment;
• Eliminating red tape and excess layers of management;
• Investing in worker training;
• Ensuring the security of the employees; and
• Committing to providing the highest quality service in the most efficient manner and with the maximum amount of public accountability.

The first and most important principle is employee involvement. Put simply, front-line employees should be treated as resources and partners in service delivery, instead of simply "costs" that need to be controlled. This requires an environment of mutual respect and an effective process to facilitate the involvement of the employees.

AFSCME affiliates are in a variety of partnerships for change around the country. From Portland, Maine, to Portland, Oregon, and many points in between, front-line workers participate in labor-management partnerships to improve the delivery of public services. In some cases, like Indianapolis, this has involved participation in competitive bidding, where public employees compete directly with private companies for contracts to deliver services. In other cases, labor and management cooperate without public-private competition. While AFSCME members have shown that public employees can compete successfully against private contractors on a level playing field, we have also shown that labor and management can work together without the threat of privatization looming over their heads.

There are numerous cases of labor-management cooperation involving AFSCME affiliates. To name a few:

• In the state of Ohio, under the leadership of Governor Voinovich, a labor-management initiative, "Quality Services through Partnership," has been under way for several years. Quality improvement techniques and quality improvement teams have been formed throughout the state government, identifying cost-saving improvements that have saved the state millions of dollars.
• In the city of Philadelphia, a period of highly contentious labor relations and attempts at privatization has given way to a new Redesigning Government Initiative, where the parties are now exploring new avenues for cooperation. A city-wide steering committee has been formed to oversee departmental initiatives. Already, labor-management teams are making improvements in summer youth lunch programs and tax auditing.
• In Fort Lauderdale, a labor-management initiative has been under way for over five years, with successful improvement efforts taking place in pipe-laying, beach-cleaning, and 911 services, among others.
• Fort Lauderdale, Philadelphia, Detroit, Cincinnati, Seattle, and Portland, Maine, all have city-wide labor-management initiatives underway, and have formed a partnership network where labor and management representatives from each of the cities meet periodically to share experiences and support each other’s efforts.
• Cooperative efforts to improve quality and cut costs are under way in several water and wastewater plants, including those in Louisville, Phoenix, and Portland, Oregon.

A federal task force that examined innovative work practices in state and local government, the Secretary of Labor’s Task Force on Excellence in State and Local Government through Labor-Management Cooperation, has issued a report entitled Working Together for Public Services documenting over 50 case examples of labor-management cooperative initiatives to improve the delivery of public services. We highly recommend it for those interested in labor-management cooperation in the public sector.

Just a few years ago, labor-management partnerships were virtually unheard of in the public sector. In recent years, as interest in redesigning government has grown, more and more of these initiatives have begun. While these partnerships are not yet widespread, there is a definite trend in this direction.

The reality is that neither labor nor management can respond to the demand for top-quality government services alone. Workers cannot deliver high-quality services unless management sees it as top priority. Management cannot deliver high-quality services to the public without enlisting the support and talents of those who do the work.

Unions are the best vehicle for enlisting the positive participation of workers. However, unions cannot contribute to the process of change unless management recognizes the vital role that unions must play.

Only a union can provide the independent voice and equality of power necessary for workers to participate meaningfully in a labor-management initiative. In the private sector, as well as the public sector, employee-involvement programs have a greater likelihood of success in a unionized setting than in a non-union setting. The union provides a collective voice for the workers, and a union contract offers the protection that workers need to ensure their cooperation.

A collective-bargaining relationship offers excellent opportunities for establishing a dialogue between labor and management as well as a framework for the formation of cooperative committees. Indeed, the vital role that unions play in redesigning government is probably the most compelling argument in favor of the enactment of comprehensive collective-bargaining legislation in the 27 states that still do not grant all public employees their fundamental right to form unions and bargain collectively with their employers.

In addition to worker empowerment, redesigning government must recognize the need to flatten the bureaucracy and eliminate red tape. It has been apparent for quite some time, in both the private and public sectors, that multiple layers of management lead to unnecessary rules which tie the hands of those responsible for performing the work. In order to eliminate waste and save money, governments must reduce middle management and give front-line workers more decision-making power on the job.

In Indianapolis, a key turning point in our relationship with Mayor Goldsmith took place early on when our members competed for road repair work. This was the first area in which they participated in competitive bidding. They found that they could not be cost-effective as long as they had to carry excessive supervisory staff. The city agreed, and eliminated 17 supervisory positions, thereby demonstrating the seriousness of its commitment to the process. For their part, the workers themselves found ways to reorganize work crews, improve work processes, and save on material and equipment costs.

By flattening the bureaucracy and giving workers the latitude to make decisions, Indianapolis was able to reduce its costs dramatically and underbid the private contractors by a significant margin. This success story has continued to this day, not only for road repair but also for a wide variety of other services as well.

A third principle for successfully redesigning government is to invest in worker training. In a redesigned workplace, job descriptions are broadened so that workers can perform a wider range of tasks and assume more responsibility. Workers must be trained if they are to have the necessary skills to perform effectively in their new roles. In Indianapolis, municipal workers have been able to compete effectively because they have been trained in "activity-base costing," an accounting technique that allows them to analyze costs associated with delivering particular services and to find ways of delivering services more efficiently. Other examples exist in state government. In the state of Ohio, the entire workforce has been trained in quality-improvement techniques to participate in the Quality Services through Partnership program. In Illinois, a career advancement program that is jointly administered by the state and the union is one of the most valued benefits offered to employees.

A fourth principle for redesigning government is long-term commitment to and protections for the workers. In Indianapolis, it is important to emphasize there have been no layoffs of bargaining unit members. Workers are more likely to participate enthusiastically in redesigning government when they see the effort as genuine and not as a threat to their employment. Such an environment can reduce the natural fear of change and encourage workers to be creative and take risks. The effort must go beyond lip service and good intentions. Workers need to be true partners, not junior partners, and the union provides the organizational structure to accomplish this.

Finally, redesigning government should be based on a commitment to delivering the highest quality services in the most efficient manner with the maximum amount of accountability to the public. In Indianapolis, the entire budget-making process has been revised to reward efficiency and savings, and the employees share the rewards by receiving bonuses over and above their regular wages. New systems for delivering services should be closer to the public, and should involve front-line workers who live in the communities, deal with the public every day, understand what they want and need and are empowered to meet those needs.

AFSCME is particularly proud of the efforts of our members in Indianapolis. They have demonstrated that public employees are very cost-competitive when given the chance to compete on a level playing field with adequate training and resources and when there is skilled leadership and commitment on the part of management and labor.

Front-line employees in Indianapolis have identified numerous improvements in work processes that have saved the city millions of dollars. Road workers have identified changes in materials and supplies, altered the composition of crews and beaten private contractors in competition for crack sealing so many times that now this work is no longer put up for bid. Our sanitation workers have been so successful at outperforming not only private contractors, but also their own budgetary projections, that they now pick up nearly two-thirds of the city’s trash compared to less than one-third in earlier years. In fleet maintenance, our members have been so successful at providing cost-effective services that some neighboring jurisdictions now bring their vehicles to the city of Indianapolis instead of private contractors for repairs.

With a win rate of about 80%, the AFSCME-represented workers have consistently shown that they can outperform the private contractors. In our view, the key to delivering top-quality services has been an effective labor-management process and progressive leadership on both sides of the bargaining table. While a program of competitive re-engineering may provide one means to achieving more cost-effective and improved public services, the more significant factor is an environment in which management and labor are committed together toward achieving the same ends. When these factors exist, AFSCME always has supported the notion of labor-management teams to examine work processes and implement changes that increase efficiency.

I want to thank you again for this opportunity to discuss an issue which is important not only to the workers whom I represent but also to the citizens of our local communities who depend on the services which our members provide. I strongly believe that the challenge of reinventing government and maintaining effective, harmonious labor-management relations are interdependent. I would be happy to answer any questions you might have.