For-Profit Privatization

Privatization Scams You Should Know About

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I am on the email list for an organization called “In the Public Interest.” It follows privatization in every sector, including education. The current newsletter is eye-opening. If you want to know how private interests have finagled their way into making a killing off public sector dollars, read this e-newsletter and subscribe (free).

 

Here is my favorite privatization story of the week:

 

National: Top executives of the Blackstone Group, owner of the janitorial services company GCA Services Group, pull down massive annual compensation. Stephen Schwarzman, Blackstone’s CEO, received $656 million in dividends and pay; and its real estate chief Jon Gray took in $205 million, for a combined total of $861 million. GCA has faced repeated accusations of low pay. The New Haven Register reported in 2011 that “a proposed GCA contract for custodial services would plunge 200 New Haven, Connecticut, Public Schools custodians into poverty, according to a research report by the Political Economy Research Institute at the University of Massachusetts.”

 

I have trouble understanding why some billionaires refuse to pay workers a living wage. Why was it so hard for the Walton family, each of whom is a billionaire, to agree to pay their workers $9 an hour? Why are so many of their workers part-time, even when they are eager to have full-time jobs? The billionaires pay great compensation to their executives, apparently, but think that the people who do the daily work of the corporation can get by on 20 hours a week at $9 an hour.

 

Open the link about GCA. It isn’t just accusations of low pay that have been a problem:

 

GCA Services placed two custodians with drug and sex offense criminal records in schools. One of the custodians, in Tennessee, was charged with the rape of a 16-year-old student in a closet on school property during school hours. It was later discovered the employee had a criminal record for aggravated battery, assault and theft of property. Another, in Texas, was a registered sex offender who was found in a school locker room dead, with his pants down and a bag over his head. A GCA official said about the incidents, “You have to understand, we hire a lot of people. I think a couple of incidents with 20,000 employees is a pretty good batting record” (“Ky. district hiring service, despite problems,” Associated Press, June 6, 2010; “Teamsters: Outsourcing custodians is a bad idea,” Naples Daily News, May 30, 2008).

 
A GCA Services custodian stole $900 from a day care center at Pasco-Hernando Community College in Florida that he was hired to clean after-hours. The GCA employee was arrested (“Police: Janitor Cleaned Day Care Out of $900,” St. Petersburg Times, November 26, 2008).

 
Rockford, Illinois, School District parents, teachers, principals and other staff were unhappy with GCA Services’ custodial work there. Reports complained that “trash wasn’t removed from classrooms, carpets weren’t cleaned and tile floors weren’t swept. The reports also indicate chemicals had been mixed improperly, resulting in health issues with students and teachers. There also were allegations of thefts from the schools, with custodians suspected,” reported the Naples, Florida, Daily News (“Documents: Custodial group gets poor marks,” June 19, 2008).

 
A GCA custodian had been working for four months at a Tennessee middle school before she was arrested in January 2011 as a fugitive from Texas. The employee had violated her probation on a felony drug conviction. A GCA official said the company had conducted two background checks including a fingerprint check before hiring the woman (“Company to review workers after fugitive found,” Associated Press, January 16, 2011).

 
The University of Tennessee in April 2012 decided to end its contract with GCA and move all cleaning work in-house. The university said that although the base cost was $500,000 higher than what it paid to GCA, it would break even after accounting for extra services like carpet care or hard-floor maintenance (“UT to use in-house custodial services,” Knoxville News-Sentinel, April 18, 2012).

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