Privatization advocates argue that private sector workers deliver comparable services more cheaply than their public sector counterparts. The truth is that sometimes they can, but very often they can’t. And, as documented by a recently-released General Accountability Office (GAO) study on federal outsourcing, the savings can sometimes come at a very high price, including employees’ lives.
The GAO reports that contractors have been awarded billions of dollars in federal contracts, despite having histories of federal safety, health and labor law violations. Some of violations have been extensive and serious. One food supplier was cited more than 100 times for health and safety infractions, including one instance in which a worker was "asphyxiated after falling into a pit containing poultry debris." This same employer was later ordered by a federal court to "properly compensate" more than 3,000 workers.
Another contractor violated fair labor laws when it "coerced employees" and in another incident refused to rehire a worker due to "prior union involvement." This federal contractor has been ordered to pay $4.4 million in back wages to 2,100 employees since FY 2005. It also agreed to pay nearly $300,000 in back wages to African-American workers after a discrimination suit.
The list goes on and on. GAO auditors found that half of the 50 largest fines levied by the Labor Department between fiscal 2005 and 2009 were aimed at 20 federal contractors. The DOL’s Wage and Hour Division which oversees federal minimum wage, overtime pay, and child labor requirements, assessed these contractors for more than $80 million in back wages. Despite these problems, in fiscal 2009, the government awarded these 20 worst companies more than $9 billion in contracts. None lost their right to bid for federal contracts, even temporarily.