By Staff
The community of Dowagiac is facing a choice; it is a choice between saving money and saving decent jobs in the community.
The Dowagiac school district solicited and received bids from several firms to privatize custodial services. This is not a decision that should be taken lightly; it is a decision that could have far-ranging and long-lasting effects.
I teach college-level economics at Union High School, and in the first chapter of our text, the author identifies two overriding economic questions. The second of these questions is, "When is the self interest also in the social interest?"
Economics teaches us that individuals always choose in their self interest, but often times this can be to the detriment of the social interest.
Choosing to privatize would, at first, seem to be in the self-interest of the school district, which calculates it will save money. The question that needs to be answered is this: Is privatizing really in its self interest, and if so, is it also in the social interest?
Under privatization a firm comes in and takes over jobs that used to be done by school employees. The company uses its own laborers and charges the school a set contract fee.
It can usually do the job cheaper because it pays workers substantially less and often under-employs them so it does not have to pay them benefits.
As an example, Brandywine schools recently terminated the contract they had with one private company and hired a new one; Brandywine asked if the new company would consider paying their workers $8 dollars an hour instead of the usual $7.
The cost savings from privatization are divided up in some ratio between lower costs for the district and profit for the private company.
It would appear that cost savings is in the district's self interest, but what about the long-term costs? If some of the displaced custodians pull their students out of Dowagiac schools, either because they relocate for a new job or otherwise, it costs the district around $7,000 for each student lost.
What about if the schools decide to go for a bond issue in the future? The families affected have a lot of family and friends in the district who wouldn't be likely to support a school district that they would see as having abandoned them.
What about liability? If you have short-term workers who feel no commitment to the community or schools they work in there could be safety or loss concerns for which the schools would be liable.
These factors all need to be taken into consideration when deciding if privatizing truly is in the district's best interest.
Is privatizing in the social interest? That is a rather hard sell.
Schools do have an obligation to use taxpayer money wisely, and it could be argued that the money saved through privatized custodians could be better used in classrooms or for more resources.
From my experience in the schools, and as an elected government official (Niles city councilman), I am skeptical of such claims. It seems that in most government bureaucracies any extra costs manage to be absorbed and any extra savings manage to be squandered.
The social costs also must include the workers and their families who would likely find themselves deprived of a living wage and medical benefits.
As for the community as a whole, the loss of decent jobs can only be seen as negative.
The real question before the community of Dowagiac comes down to a choice between people and profit; do we exchange our long-term, committed employees with decent wages and benefits for some possible short-term cost savings and a profit for a private company?
For me the choice is clear, and I hope others who have an opinion will let their elected representatives on the school board know how they feel.