|
|
|
Common Myths
The following is a presentation of the employer claims used to support privatization and the facts that prove otherwise:
EMPLOYER CLAIMS |
vs |
THE FACTS |
MYTH 1 The public sector is a monopolistic supplier of public services, which leads to inefficiencies and waste.
There is no incentive to keep costs down or to improve services because the "consumer" has no alternative providers to services to turn to. |
|
FACT 1 Politicians compete with one another to manage a government. Ideological positions such as contracting out or privatization are part of election campaigns. If a certain elected leader adopts a service delivery strategy that his/her "customers", the taxpayers, find lacking, they will quickly find a new supplier – a new leader. The competition for government is intense and as effective as any private sector corporate competition. Clearly, the argument that the public sector is monopolistic and non-competitive and, therefore, inherently inefficient just doesn't hold.
|
MYTH 2 Competition among private companies for public contracts will drive prices down as they are forced to find cheaper ways to provide services.
|
|
FACT 2 The last several years have shown us that outraged taxpayers have provided all the motivation needed by political leaders to ensure that the lowest cost/highest quality service is delivered.
|
MYTH 3 The motive to increase profits will push companies to develop the most cost cutting techniques even after they have successfully contracted with the government.
|
|
FACT 3 The opposite is true. After the initial contract is won, private contracts have a history of rapidly rising prices. This is especially true where governments have abandoned all expertise and/or equipment to provide the service in-house.
|
MYTH 4 The lack of competition in the public sector stifles innovation. Decisions are made based on the way things are usually done or who has political clout, not on the basis of improving service delivery.
|
|
FACT 4 There is a valid reason for government to be more careful and deliberate in its decision making process – taxpayers insist on it. Taxpayers are the boss in government and they demand that long lists of exhaustive regulations be followed by public entities. This is not true for the private sector, which can make quick deals behind closed doors. |
MYTH 5 Workers in the private sector are more motivated than workers in the public sector. The sense of winning in competition boosts worker pride and morale. They feel rewarded by their hard work when their firm is awarded a contract.
|
|
FACT 5 Contracting companies offer poor quality at rock bottom prices by paying employees low wages, often without benefits. This hardly results in high employee morale. More often the result is high employee turnover, inadequate training, and poor performance.
|
| MYTH 6 Private firms can take advantage of economies of scale by spreading costs over several smaller municipalities that they have contracted with. |
|
FACT 6 Local governments could enjoy the same economies of scale by joining forces in making purchases together. Few private companies compare with the State of Ohio's ability to demand the lowest price because of large volume purchasing power. |
|
|
|
