Union members — beware the pitfalls of privatization

To my unionized brothers and sisters, I write this for you.

The OBA, as predicted, brought privatization to the forefront post-election, with the formation of the SAGE Commission. One of the main directives of the SAGE Commission is to identify activities that can be privatized 

Privatization means the whole or partial sale of government owned companies to private investors. Will those private investors most likely be OBA supporters?

Types of Privatization

• Privatization of professional and support services - eg architectural, legal, custodial, IT, telecommunications. 

• Privatization of public works and infrastructure projects - e.g. construction and maintenance of highways and buildings 

• Privatization of service delivery to the public – e.g. mental health & health care, social services, corrections, and education.

• Competition between public and private sectors – this option occurs when the government to compete directly with private sector for the administration and delivery of certain services 

Advantages SAGE may speak about

• SAGE may claim privatization improves efficiency and cut costs. The theory is that  private companies are motivated by profit, and are more willing to make cuts in manpower. 

• SAGE may claim that politicians are influenced by political pressures at the expense of making sound economic and business sense. They may say some politicians may be unwilling to make certain “hard decisions” in order to appease voters.

• Increases Competition. Often privatization occurs in conjunction with deregulation, which increases competition. This competition may lower prices.

Disadvantages you must show SAGE

• Public Interest. There are some things that should never be motivated and  or distorted by profit including health care, education, security and public transport. 

• Monopolies. Often the most efficient way to privatization is the formation of monopolies.  Monopolies tend to set higher prices, like milk.

• Divesting. Often governments will look to privatization to raise revenue in the short-term by selling off public-owned assets to the private sector eg. Government buildings and lands.  

• Lost Profits. By privatizing, governments and taxpayers lose out on the profits that are generated from key services such as Tax Collection or TCD

• Regulating. To ensure that there is no abuse of the monopoly power, often governments will need to invest heavily to regulate & monitor these companies to protect the citizens.  

• Fragmentation. Often privatized services are broken up into smaller functions. This may lead to the blurring of lines regarding responsibility and accountability.

• Short-sighted vision of firms. Private firms may also seek to increase short term profits for their shareholders and avoid investing in long term projects. 

• Shareholders. Private firms have the added pressure from shareholders to maximize profits, regardless of job losses.

Brothers and Sisters, in the following weeks I will lay out what privatization could mean for Government workers. Until such time, Stay strong and Stay united.

Things are not the way they used to be, I won’t tell no lie; 

One and all have to face reality now.

Bob Marley

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