All across the country, public services are increasingly outsourced to private contractors in the name of efficiency and cost savings. But a new report from the non-profit research group In the Public Interest (ITPI) shows that outsourcing public services hurts middle and working class communities as well as workers.
The report, "Race to the Bottom: How Outsourcing Public Services Rewards Corporations and Punishes the Middle Class," makes the case that when private contractors make huge profits from taxpayer dollars, money is often sucked out of local communities. Dollars that used to go to employees are sent to shareholders instead, harming communities as local workers have less to spend. Taxpayers take another hit when employees, who used to have access to health care and good wages, now have to rely on food stamps and Medicaid to survive.
“False promises of privatization trigger a race to the bottom. CEOs do well, but middle class jobs are replaced with poverty wages,” says ITPI’s Donald Cohen.
