Wisconsin for Sale

Union varies tactics in privatization fight.

Despite countless disastrous experiences with privatization nationwide, public officials continue to try the management fix of the day: private contracting schemes. One of the hottest privatization climates currently is chilly Wisconsin. From state welfare services, to city water treatment facilities, to local schools and health care facilities, Wisconsin officials are doing the privatization shuffle, in step with the state’s "less government is better government" Gov. Tommy Thompson (R).

Fortunately, there are others in Wisconsin who want community-based services and public-sector providers who are accountable to their constituencies. And they are winning fights against privatization across the state.

Warding off the closing of the Brown County Mental Health Center in Green Bay, for instance, was a sweet success for patients who could not stand up for themselves, according to members of AFSCME Locals 1901 and 1901E (Council 40). Even though job security and wages were threatened under the shutdown scenario, "The fight was about quality of care — not wages," says Cathy Christensen, Local 1901 secretary and a clerical worker at the center.

PRIVATIZED CARE. The proposed plan called for abandoning the aging mental health center, part of which dates back to the 1800s. The 188 center residents and clients were to be transferred to the nearby, private Bellin Hospital. While Bellin management maintained that it treated anyone, for years it had sent to the Brown County center any patient its staff couldn’t handle or who had run out of insurance.

In addition to Local 1901 and 1901E members, AFSCME representatives from other area locals as well as members of other unions turned out at a hearing to protest the center’s closing. But making the greatest impact, Christensen believes, were family members and community supporters.

"It was great to see the guardians of the patients and the community come forward and say what a good job our nursing staff was doing," Christensen says. With such an outpouring of support, "The county board had to listen," she notes.

And it did. The privatization proposal not only was soundly defeated, but a proposal to remodel or rebuild the Brown County facility is under consideration. "The board and community found out," Christensen reports, "that the best care at the least cost is right here at our mental health center."

COMPASSION FIRST. Last August, word came down from state Superintendent of Schools John Benson that the Wisconsin School for the Visually Handicapped (WSVH) at Janesville should be closed. Monies allocated for the underutilized facility, Benson said, should go to public schools across the state, which could educate the visually handicapped.

At Benson’s request, legislation was written to close the school, but public hearings brought students, parents and employees to protest the proposal.

Kelly Bailey, treasurer of AFSCME Local 973 (Council 24) was a student at the school and is now a teacher’s aide there. In his prepared remarks, he told a harrowing story of transferring to WSVH after being the target of physical and verbal abuse by students at a public school.

Others pointed out that WSVH not only teaches academics, but also self-esteem and life skills, such as finding the way to a bus stop and crossing the street. Extra-curricular activities include band and student government.

Local 973 Pres. Margie Marsden noted that instead of looking to close the school, the state should try to increase enrollment at WSVH through greater publicity of its services. Currently there are 59 students at WSVH.

Martin Beil, executive director of AFSCME Council 24, told a legislative committee that the "common theme [of all those who oppose the closing] ... is that schools such as WSVH are an absolute necessity in a civilized, compassionate society; that your decision should not be strictly a matter of dollars and cents."

In light of the opposition, legislators let the session end without action on the proposal. Says Beil, "The fight might not be over, but we’ve won at least an extra year to operate the school and work on proposed improvements."

GO WITH THE FLOW. On March 1, 1998, United Water Services of New Jersey took over operations of the Metropolitan Milwaukee Sewage District plant. The decision to privatize the sewage treatment facility came after considerable opposition and lobbying by AFSCME Council 48 and Local 366, which represents plant workers.

"We held rallies, marches and spoke to commissioners at hearings and in person," reports Sam Serio, president of Local 366.

Nonetheless, the decision-making commission, appointed by the mayor, a privatization supporter, would not budge on plans to privatize. So the union took a new tack.

"Once it’s clear that you can’t stop them, this union stands up and does the best it can for its members," says Richard Abelson, Council 48 executive director, who assumed his new position in July 1997, when the privatization process was well under way.

Exerting pressure on United Water, Abelson negotiated a memorandum of understanding that, among other things, committed the giant international com-pany to honor existing collective bargaining agreements, to employ all current members of the bargaining units, to guarantee no layoffs for 10 years and to offer compensation and benefits that are comparable to those currently in place. In return, the union promised to drop pending legal proceedings.

BEST STRATEGY. While Serio was and remains skeptical of working under United Water management, he believes that negotiating this agreement was the best strategy for his local.

"When we got the no-layoff commitment," Serio said, "we knew it was the best for our members." (A contract, however, has yet to be signed, because, on some benefits issues, the union and the new management don’t agree on what’s comparable.)

As for the future, Serio doesn’t believe that taxpayers will "save a nickel" under privatization. He also fears that worker-friendly overtures made when privateers are seeking a contract could disappear once the contract is awarded. "You don’t know what’s going to happen under privatization," he observes.

AFSCME believes that government should not follow the high-risk path of privatization. Maintaining collective bargaining agreements, however, will be instrumental for the union in correcting contract violations.

AFSCME Wisconsin plans to monitor the performance of contractors, and if they fail in service delivery, operations and labor relations — as so many have done (see "Raiders of the Lost Jobs," January/February Public Employee) — support for privatization will break down and services will be returned to public operation.

By Catherine Barnett Alexander

Report Card Bogus on Wisconsin Welfare Privatization

News stories bombarded Wisconsin citizens early this year on the overwhelming success of the state’s Wisconsin Works (W-2) program. One of the first attempts to do away with traditional welfare programs in the nation, W-2 began in 1997, replacing the state’s Aid to Families with Dependent Children, but was not fully implemented until March of this year.

Like other "welfare reform" programs, W-2 seeks to move people off welfare by placing them in jobs. Ten private contractors, both profit-making and not-for-profit, are now delivering service to 70 percent of the state’s welfare recipients.

The glowing news reports were the result of a paper published by the Wisconsin Policy Research Institute (WPRI), a conservative think tank, which claims it conducted a comprehensive study of the W-2 program. The institute’s "report," in fact, is public relations tomfoolery, designed to promote privatized welfare functions.

TO WHOSE CREDIT? Wisconsin’s welfare program was changing years before W-2 was implemented. Between 1987 and 1996, the caseload in Wisconsin was reduced by one-half and was continuing to drop annually. As a result of pre-W-2 system changes, job placements for welfare recipients in Milwaukee increased 30 percent, and cash assistance cases were reduced by 59 percent. These pre-W-2 achievements are comparable to those being attributed to W-2, indicating that the program continues to benefit from the pre-W-2 changes. Welfare program savings reported by WPRI, furthermore, pre-date the full implementation of W-2.

But the most important distortion of WPRI’s analysis results from its failure to assess the impact of privatization on welfare recipients. WPRI ignores reports from Milwaukee that welfare recipients have been dropped from assistance without warning and without jobs, because they were erroneously labeled as "job ready." It ignores an investigation into alleged violations of state policies by private contractor Maximus, Inc. that include denying or delaying cash benefits to eligible individuals and assigning workers to non-existent jobs while dropping their benefits.

CASH INCENTIVES. That these kind of violations could occur is not surprising given the incentives offered private contractors for removing recipients from welfare rolls as soon as possible. Contractors receive $800 for each full-time placement; $400 for part-time placements; and $200 for each "work-related activity" (on-the-job training, for example, education or community work experience). "The more quickly they moved W-2 participants into unsubsidized, private-sector jobs, the more money vendors would earn," the document states.

The institute notes that the state considered a plan under which "providers would receive more money for placing participants in better jobs with higher wages, longer retention and better benefits. Such incentives ultimately were left out of the contract."

Reports of Wisconsin’s W-2 successes clearly are premature. The state ought to be looking at the long- and short-term impacts of its programs on those they are supposed to serve, and compare the results of a fully implemented W-2 to pre-W-2 programs.