The price of privatization


Gather ’round children, and a true tale I’ll tell about how privatization does not go well.

In the past decade or so, there has been a rush by public officials to privatize government functions. Corporations, they cried, can do any public job better and cheaper. So, on that theoretical assumption, everything from water systems to social services have been turned over to corporations for their fun and profit. Case after case, the profits came, but at the expense of the public, for the corporations achieved their so-called “efficiencies” by replacing experienced government employees with low-wage workers and cutting service to the people.

For example, in 2005, the Republican governor and legislature in my state of Texas drank deeply from the cup of privatization theory, resulting in Accenture Inc. getting a nice contract to show its corporate prowess in handling food stamp applications. Accenture computers and consultants arrived, and 2,900 state workers exited.

After months of bumbling, Accenture botched the job so badly that the state’s sheepish officials had to fire the corporation and give the program back to the state. But — oh! — one little problem. Those 2,900 fired workers were gone. Having moved, taken other jobs, or just gotten fed up, most weren’t coming back.

So, now, when job losses have caused food stamp applications to soar by 11 percent, Texas doesn’t have enough trained processors to handle the load. The law requires that these hard-hit people be certified within 30 days — but the backlog is so huge that certification is taking three months in Amarillo, four months in Houston, five in Dallas, and so forth.

Prior to privatization, the Texas food stamp program won national praise for its efficiency. Now it’s a mess — and hungry people are paying the price.