A Case Study in Government Run Programs: Part II

I think this is a theme/topic I will cover on numerous occassions throughout the life of this blog.  Privitization of government-run programs/departments is something I believe strongly in and I always want to bring attention to situations where I see privitization being a benefit.  I wrote in a previous post about the Chicago CTA and the poor job that the Illinois State Government was doing running it.  Well, this week it’s a new government-run program that I’d like to draw your attention to…the sanitation department.

An article in today’s Sun-Times reports the results of a city-wide surveillence study that ended in September.  I can’t really say the results are suprising.

Laborers and truck drivers whose movements were eyeballed by undercover investigators and tracked by GPS were found to be in bars and restaurants, relaxing at home, sitting in their cars or standing around drinking and, in some cases, urinating on the street when they were supposed to be hard at work.

So your local garbagemen have been lazy on the job, and even throwing back a few cold ones while they were supposedly on the clock.  Ok, big deal, even white-collar workers in the private sector waste time browsing internet sites (like this one, perhaps?), sending personal e-mails, etc. etc.  However, there is one major difference here.  These are city employees.  They are paid using taxpayer money.  So naturally, as a resident of Chicago, you should be concerned with how much this slacking off is costing you…

When the cost of employee benefits and the pricetag for maintaining and fueling trucks is factored in, the annual waste citywide approaches $21 million, the inspector general found.

The malingering is so pervasive, the city could literally pick up the same amount of garbage with 25 percent fewer employees, provided the survivors worked a full 8.5-hour shift with 30 minutes off for lunch.

Not only is it costing us $21 million in waste, but the same amount of work could be completed with 25% fewer people.   So why isn’t there a streamlining of the business?  Well, frankly, there’s no need to.  Why should the sanitation department be required to streamline when they keep getting a check from the city government for the work they’re doing now?  If the big boss isn’t looking over your shoulder, who cares how long it takes you to do your job, just as long as you get it done on time, right? Sure, but it won’t get you anywhere.

Here’s where privitization would come into play.  Simply offer up the city’s sanitation responsibilities to private business.  You could have a bid-system in which the city awards its business to a private company for a period of time.  The city would only be on the hook for the cost laid out of the contract and wouldn’t be required to fork over extra money that wasn’t in the original agreement.  If the private contractor couldn’t live up to their promise, the city could simply look for a better provider of sanitation services.

This works because it’s creating competition and incentives.  The city has an incentive to find the cheapest contract it can find.  This reduces the cost in the budget, and (ideally) the cost to the taxpayer.  The private company wants to make the most profit from the contract, so they try and do the work as efficiently as possible, to keep their own costs down.  I know it seems stupid to have to explain, but it’s a simply concept that would work wonders for reducing the tax burden and increasing efficiency of services that are currently run by the government.  Not to mention you’d probably have a much higher quality service as well (one of the side-effects of competition).

Oh, by the way, regarding that city budget?

The findings come at a pivotal time. Hundreds of laborers are targeted for layoffs to help erase a projected $420 million shortfall this year and next.

Well, provided that this study is accurate and a private company could do the same work for $21 million less, that’s about a 5% reduction in the deficit I just made.  You’re welcome.

I think the situation pretty much explains itself.  I’ve been sitting here for a few minutes trying to come up with a clever and snappy closnig paragraph, but really, this is all simple folks.  Isn’t government too big already?

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