PRIVATIZING GOVERNMENT SERVICES IN THE ERA OF ALEC AND THE GREAT RECESSION

Ed. note:  This is a study was published by the University of Toledo Law Review.  It was written by Ellen Dannin, who is the Fannie Weiss Distinguished Faculty Scholar and Professor of Law at Penn State Dickinson School of Law.  The study is 29 pages in length and I will encourage everyone to read it and check it’s references as being very prescient. 

Here we will post here the Conclusions.  Separate sections will also be posted as time permits.  We think that this is a very important document and worthy of publishing it in sections so that those not wishing to tackle 29 pages at a time can read this.

V. CONCLUSION
This small sample, drawn from thousands of model bills that ALEC has drafted, would promote a radical reordering of the operation of American society.  The ALEC bills examined here demonstrate strong opposition to public-sector work and workers and take the view government illegitimately usurps private enterprise. In other words, ALEC contends that the natural and best operation of the education and financial ordering is through private companies in a system in which unions do not exist. ALEC acts on that view through many strategies to move public work to the private sector and to bar union representation and negotiation. Those strategies include tax breaks and subsidies that allow people to opt out of public institutions, penalize government for offering any service that could be provided by the private sector, permit private persons or businesses to challenge a public service, and create vehicles to privatize public work. The strategies also include degrading the quality of public work, giving private businesses the right to sue for claims that they have experienced economic loss by competition from a government agency’s services, and providing incentives to workers to opt out of collective bargaining.

Services that are provided by the government tend to be natural monopolies. If ALEC succeeded in moving all government services to the private sector, the result would be provided by freedom of information acts or sunshine laws. In addition, if it was not possible to return to the public sector privatized work that failed to meet its contractual obligations or whose operations harmed the agency’s mission, then an important incentive to provide good performance would be lost. Aggravating this concern, because government services tend to be natural monopolies, alternate private providers may not exist. The result would be a new gilded age propelled by the ambitions of robber barons.

There are also unintended ironies among the bills’ provisions. For example, privatizing work brings those employees under the jurisdiction of the National Labor Relations Act, with broader rights to organize unions, engage in collective bargaining, and strike than is the case for public-sector collective bargaining.Recently, a federal district court struck down a new Illinois law limiting overtime and collectively bargained pay rates for work that was privatized, because the law was preempted by the NLRA.139 The NLRA’s successorship doctrine applies to employees whose work has been privatized and requires the private employer to recognize and bargain with the union that represented the employees in the public sector.140 It is likely that repealing the NLRA is on ALEC’s agenda, so it is not concerned that the former public employees would continue to have legal rights to union representation and collective bargaining. The recent attacks on the NLRB in connection with the Boeing case suggest that this may be the case.141

Attacking public employees may seem odd; however, there are important reasons why public-sector employees and their unions may have been the object of attack. The attacks may be intended to affect the balance of political power. For example, privatization can be a tool to affect the outcome of elections. Public-sector employees and union members have tended to be politically active and to vote Democratic.142 As a result, attacking public-sector employees’ rights
to join unions and bargain collectively should decrease union membership and resources, thereby weakening the Democratic Party.

Looking through the window provided by the proposed bills reveals the philosophy embedded in them. Among the issues the bills raise are:

? What should be provided by the public versus the private sector?

? Is government just a business like any other business?

? Is the way government is funded and spends money the same or different than the way individuals earn income and spend it?

? What are the responsibilities of a democratic government to those it governs? To those it employs? To those affected by its decisions?

? What are the roles of citizens in relation to their government? What is the public’s role in government decision making?

And finally, we must consider what it is that makes us truly secure as a country.  Put another way, how do we best “insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity”?143

The philosophy of ALEC requires that we ask and answer all these questions
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FOOTNOTES:

138. CNN Politics: Reality Check: What We Really Know about the Budget (Mar. 31, 2011),
available at http:// www.cnn.com/2011/POLITICS/03/31/gallery.reality.budget/index.html.
139. Int’l Bhd. of Teamsters v. Metro. Pier & Exposition Auth., No. 10 C 3484 (N.D. Ill. Mar.
31, 2011).
140. Daniel J. Bretz, Be Careful What you Wish For: Successorship Liability from a Labor Law
Perspective, PEO INSIDER (Mar. 1999), http://library.findlaw.com/1999/Mar/1/127237.html.
141. See Susanna Ray & Holly Rosenkrantz, Boeing NLRB Complaint Withdrawn as Political
Fallout Persists, BLOOMBERG BUSINESSWEEK (Dec. 15, 2011, 12:12 AM EST),
http://www.businessweek.com/news/2011-12-15/boeing-nlrb-complaint-withdrawn-as-politicalfallout-
persists.html.
142. Daniel Bice & Ben Poston, Missing Senators Rely Heavily on Union Campaign Dollars, J.
SENTINEL (Feb. 28, 2011), http://www.jsonline.com/news/statepolitics/117078618.html.
143. U.S. CONST. pmbl.

To read this entire study, please click here