Cash Cow
For businesses looking to
grab a bigger share of the $393 billion K–12 education industry,
the bottom line is looking up. But when private profits outweigh
public accountability, educators and kids pay the price.
More...
By Kristen Loschert, John
O’Neil, and Dave Winans
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 Photo by Danny Peck/Peck
Studios
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Also in this story...
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It was the videotape that sold her.
 Photo by Peter Zuzga
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With 15 years of public school teaching under her belt and another 15 years
as a corporate trainer, Laurie Mozlin knew a little about teaching kids and
business innovation. So as she watched the slick video featuring the “Edison
Schools” model in the spring of 2001, she felt a jolt of exhilaration.
Images filled the screen—inner-city kids engaged and achieving. The voiceover
extolled the for-profit firm’s research-based curriculum and “management
by team.”
“I was so excited about these tried-and-true programs that they said
would work with underprivileged kids,” says Mozlin. So after a job interview,
she quickly signed on to teach at an Edison-run charter school, the Milwaukee
Urban League Academy of Business and Economics. Later, as she jetted to Virginia
and Pennsylvania for training, Mozlin’s spirits remained high. It looked
to her like Edison had the patent on a formula that had eluded traditional
public schools.
“I felt like I was part of a new movement,” Mozlin recalls.
It took only a few short weeks for the promises to unravel. Administrative
support at the school collapsed. Office phones went unanswered until after
classes started, so Mozlin and her colleagues had to scramble to cover classes
for teachers who called in sick earlier in the morning. Supplies of books and
other curriculum materials ran short. Teachers weren’t reimbursed for
supplies as promised. Fights between kids broke out regularly and, Mozlin says,
some of the best students transferred out.
By the time Christmas break arrived, Mozlin, a designated “lead teacher,” had
taught three different combinations of third and fourth graders in three different
classrooms. By May, she’d quit, along with 15 colleagues who resigned
or were pushed out that year—and replaced by staff lacking full certification.
Mozlin, now happily teaching in the Kenosha (Wisconsin) Unified School District,
says she and her colleagues learned a hard lesson that dreadful year in what
happens when corporate profits—not student success—drive the bottom
line.
“We were sold a bill of goods,” she says now. For-profit firms
like Edison “cut corners every chance they get because the bottom line
for them is making money. They are not in it for the kids, they are in it for
themselves.”
‘Privateers’ on the Prowl
Market
Watch: |
| More than 50 for-profit Education Management Organizations
manage more than 460 schools in 28 states and the District of Columbia. |
Nearly $400 billion are spent on K–12 public education annually and,
for private firms looking to grab a bigger slice of the pie, the prospects
are only getting sweeter.
Just two decades ago, for-profit firms selling to schools limited their wares
to goods like textbooks, soda machines, and cleaning supplies. Now, transportation
and food services, substitute teachers and supplemental instructional services—even
the management of entire public schools—are up for grabs in the headlong
rush to “privatize” public education.
Buyers better beware, though. Student achievement is trickier to deliver than
computers and playground equipment, and studies show for-profit firms simply
don’t outperform public school teachers and education support professionals.
And many firms have outright failed, forcing them to bow out of their contracts
just a few years after signing them.
Yet these days offers for their services just keep rolling in.
Education Management Organizations (EMOs), companies like Edison that contract
to run public schools, didn’t even exist until about a decade ago. But
the number of public schools operated by EMOs has more than tripled in the
past five years, with a total enrollment of more than 200,000 kids, according
to an Arizona State University study. Also looking to expand their market share:
for-profit providers of tutoring and other instructional services. They’re
scrambling to take advantage of a potential $2 billion market in “supplemental
educational services” (SES) made possible through the Elementary and
Secondary Education Act, the so-called No Child Left Behind law. NCLB pointedly
left the door open for private companies to offer tutoring to students who
attend “failing” public schools, and businesses aim to cash in. “The
stream of revenue makes our eyes pop out of our heads,” a lobbyist for
a prominent SES provider, HOSTS, Inc., recently told Stateline .org, an online
news service.
Even more alarming, voucher plans—the ultimate form of privatization—continue
to gain footholds in new areas. Taxpayer-funded voucher schemes now operate
in Milwaukee; Cleveland; Washington, D.C.; and the state of Florida.
So who’s behind this frenzied movement to funnel public education dollars
into private hands? While the Bush Administration may be the most prominent
of those leading the charge, school boards aiming to save a few dollars, free-market
ideologues convinced that private employees can do a better job than public
school teachers and ESPs, and politicians with a history of bashing schools
and promoting vouchers all play a part.
“The lines are being drawn between ‘privateers’ who believe
in expanding the opportunities for private industry at any cost and those of
us who believe in free enterprise but think some things—the schools,
the military, your public library, Social Security—don’t fit the
for-profit model,” says NEA Secretary-Treasurer Lily Eskelsen. “Some
public services just should not be at the mercy of CEO stock options.”
The privateers and their allies in government argue that forcing public schools
to compete with private schools and private industry will raise quality and
ensure that schools remain accountable to the public.
Yet a recent study by the U.S. General Accounting Office found that public
schools managed by EMOs made little or no difference in student achievement
compared with traditional public schools. Research on the achievement of students
attending private schools with vouchers in cities like Milwaukee and Cleveland
came to the same conclusion—no advantage for the private sector.
Ironically, private service providers and private schools are exempt from
many of the state and federal accountability provisions to which educators
must adhere. In Florida, for example, students in public schools labeled as “failing” can
use taxpayer-funded vouchers to attend private schools. But private schools
aren’t required to give their students the state test—the one that
got the public school labeled as a failure in the first place. Nor are private
schools required to use certified teachers or accept all students. It’s
a classic double-standard. “We believe public dollars should be devoted
to those institutions that have public accountability,” says Eskelsen.
ESPs on the Front Lines
Market
Watch: |
An Ohio study found that districts using private bus
companies to transport students paid between 51 and 63 percent
more per mile than district-run programs.
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The privatization movement first hit school support services during the 1980s—and
ESPs have been fighting back ever since.
“When you privatize a teacher, it’s very visible,” explains
Ron Bacon, an organizing consultant for the Michigan Education Association. “ESPs
are silent cuts. These invisible cuts aren’t as noticeable to the public
and parents, so they’re easier to make.”
Efforts to privatize support services often come down to one thing: cold hard
cash.
 Photo by Matt Ferguson
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“Board of education members as employers think privatization saves money,” says
Paul McBride, a former ESP organizer for the New Jersey Education Association
and author of NEA’s guide Beat Privatization. In fact, he says, it usually
costs them more.
A study by Kent State University of school transportation trends in Ohio,
for example, found that districts using private bus companies to transport
students paid anywhere from 24 to 50 percent more per student than districts
keeping those services in-house. The costs per mile were even greater: districts
paid between 51 and 63 percent more for private transportation than district-run
programs.
But the costs of privatization go well beyond the economics.
School boards sometimes look only at the surface tasks ESPs perform—cleaning
buildings, transporting students, cooking food—without seeing the community
connections and outside skills ESPs offer. For instance, many ESPs are bilingual
and help schools communicate with parents learning English, says McBride, while
others volunteer in the community as firefighters or emergency medical technicians.
(In fact, 78 percent of ESPs volunteer with community organizations.) Most
ESPs live in the districts where they work, too, giving them a vested interest
as taxpayers in the well-being of the schools, as well as the opportunity to
get to know their students outside of school hours.
“All of these things are talents and skills contributing to the education
of the students and helping the staff, but no one measures that or pays for
that and the [school] board doesn’t even think about it,” says
McBride. And there’s something else: private contractors may not do proper
background checks on their employees, putting students and staff at risk.
The loss of ESP jobs also may mean less purchasing power for local residents,
less revenue in the district, and potentially less funding for public education.
“Most people who work here, their children are students in the district,
and if they weren’t employed it would affect their kids as well,” says
Andrew Hurst Jr., president of the Benton Harbor Service Employees Association
(BHSEA) in Michigan.
So when Benton Harbor school officials threatened to outsource the district’s
custodians in the name of saving money, BHSEA, which represents custodians,
maintenance, transportation, and security workers, sprang into action. Members
developed a plan to have the custodians work in pairs or small groups during
the evening shift to maximize the limited workforce and reduce overtime costs,
says Hurst. Then they mobilized the community behind their idea.
“We had a lot of community support and that put a lot of pressure on
the school board to listen to our proposal,” says Hurst. “[The
board members] realized it was in their best interest to listen to what we
had to offer” and to keep the custodians.
Districts that privatize, though, lose more than a quality workforce. They
also lose the flexibility to add programs or services as their needs change,
since private contracts limit the scope of the work performed. Any duties performed
outside the contract’s parameters usually incur extra charges for the
district, says McBride; although few contracts ever penalize the contractors
if they make mistakes. More importantly, districts may lose the capacity to
break away from a contractor and give the work back to public employees, even
though doing so could save money and increase quality.
At the Classroom Door
 Photo
by Peter Zuzga
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Private firms increasingly are looking into other areas of the school campus
as well, and many are knocking on the classroom door.
Take substitute teaching. Kelly Services, a leading provider of temporary
help, now boasts an “educational staffing” division that supplies
an average of 1,600 subs daily to more than 850 schools across 30 states.
It goes much further than subs, though. Some 50 EMOs are managing more than
460 schools in 28 states and the District of Columbia, according to researchers
at Arizona State University (ASU). About 80 percent of the EMO-run schools
are “charter schools,” and they’ve made greater inroads in
states with permissive charter school laws, particularly Arizona and Michigan.
Another new wrinkle: some private firms use charter status to offer “virtual” courses
to home schoolers—with the public picking up the tab. Such firms now
operate 17 virtual schools in 11 states, enrolling more than 10,000 students.
Strong anti-public school sentiment among some legislators, combined with
shaky claims about the superiority of the private sector, have paved the way
for these for-profit companies, says NEA staffer Heidi Steffens, an expert
on privatization.
Slick marketing, as Laurie Mozlin found out, also helps make the sale. Edison
Schools, which ran the charter school where Mozlin spent her ill-fated year,
manages 102 schools with a total enrollment of more than 70,000 students—up
from only four schools in 1994. Edison’s own Web site tells visitors the firm’s research-based design
delivers a “world-class education.”
But Edison’s results don’t back its inflated claims. Edison manages
and releases its own data on student achievement in the schools it oversees—data
that show gains in Edison schools. But independent examinations of Edison’s
performance compared with that of similar public schools tell a different story.
“One of the true scandals of the EMOs—Edison and others—is
that they’ve been allowed to do their own accountability” says
Steffens. “I mean, that’s like asking General Motors to let you
know if their cars are safe or fuel efficient.”
According to Steffens, as Edison has grown over the past several years, increasing
numbers of charter schools and districts have cut ties with the firm, blaming
high costs and poor service. Edison’s not alone in that regard. The ASU
report found that more than 60 public schools managed by EMOs have terminated
agreements in the past five years, mostly because districts “felt that
the arrangement with the EMO was too costly or had not performed up to academic
expectations.”
Cashing in After Hours
 Photo
by Peter Zuzga
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Such a shaky track record might make educators think policy makers would roll
back the incursion of private firms in public school classrooms. Instead, many
are rolling out the red carpet.
The so-called No Child Left Behind law, passed by Congress in 2001 and now
hitting schools like a tidal wave, includes what one pro-privatization researcher
lauds as “politically palatable vouchers.” Under NCLB, students
in public schools failing to make adequate yearly progress (AYP) for three
consecutive years must be offered tutoring or small-group instruction outside
of school hours. (After five years, failing schools face an “alternate
school governance plan” that could turn the school over to a “private
management company.”) In the meantime, school districts pay for the supplementary
educational services out of their Title I funds—an average of $1,281
per student—and private firms are lining up to grab a share of the booty.
For-profit market leaders such as Sylvan and Kaplan K12 Learning Systems “will
try to make this into a big industry,” predicts Clive Belfield of the
National Center for the Study of Privatization
in Education at Teachers College, Columbia University. Last year, about 60 percent of the state-approved supplemental
service providers were for-profit companies, says Steffens.
Best of all for vendors, few strings are attached. SES providers are exempt
from NCLB’s “highly qualified” teacher provisions and aren’t
required to serve students with disabilities or limited English proficiency.
And “they’re not generally covered by federal civil rights laws,” says
Joel Packer, NCLB policy expert. For example, “a religious school can
legally discriminate in employment.”
In the end, stresses Packer, school districts will foot the bill for this
NCLB mandate, even though nearly 7,400 districts in 10 states stand to receive
less Title I money this year. (In fact, the overall Title I budget for the
2004–05 school year falls $6.2 billion short of the amount authorized
by NCLB.) The bottom line? Soon more public schools will fail to meet “adequate
yearly progress,” forcing them to provide supplemental services with
less federal money—while private vendors, unencumbered by NCLB mandates,
walk away with profits.
The Ultimate Step: Vouchers
It’s not just Congress that flashed the green light to privateers. The
Bush Administration has gone to extraordinary lengths to promote the ultimate
form of privatization—vouchers.
As originally proposed by President Bush, NCLB would have provided private
tuition vouchers to all students in schools not showing adequate yearly progress.
NEA lobbying and bipartisan opposition stripped the 2001 law of this national
voucher program, forcing the President to scale back his ambitions. But Bush
and his education department still push for federal funding of state-level
voucher schemes.
Earlier this year, Bush won passage of a federally funded, $14 million voucher
program for Washington, D.C., a plan the Administration hopes “becomes
a model for the nation,” U.S. Education Secretary Rod Paige recently
said.
In the Fiscal Year 2005 budget, the Administration is calling for another
$14 million for D.C. vouchers, and it seeks another $50 million to “help
cities across the nation start similar programs,” according to Paige.
The Department of Education already has doled out more than $75 million in
grants to voucher advocates since Bush took office, reports a People for the
American Way study.
More states are flirting with vouchers as well, and one, Florida, has launched
three statewide voucher and tax credit programs at the behest of pro-privatization
Governor Jeb Bush. One of the programs offers vouchers to students in schools
labeled as underachieving by the state; another offers vouchers to students
with disabilities; a third gives tax credits to firms that donate money to
voucher-distributing groups.
No one has formally evaluated how the more than 20,000 students using the
vouchers are achieving, but the programs’ lack of accountability alarms
many educators. In a series of investigative reports, the Palm Beach Post uncovered
a host of abuses—from voucher schools lacking quality checks and accreditation
to outright embezzlement. One private school operator pocketed more than $250,000
in voucher money without enrolling students. Another school, founded by a man
now facing terrorism charges, received more than $300,000 in vouchers. Still,
the state legislature failed to pass a voucher reform bill before adjourning
last spring.
“None of the schools that take vouchers is regulated in any serious
way,” says Shelley Vana, outgoing president of the Palm Beach County
Classroom Teachers Association and a member of the Florida State House of Representatives.
As a legislator, Vana hears from parents of children with special needs who
now regret taking the vouchers. “They say, ‘The people in the private
school I’ve chosen just don’t have any experience in [this area].
I’ve made a bad choice.’ But their child has lost a year.”
And while state funding flows to voucher schools, “the public system
is losing money, even though we have the same operating costs,” Vana
says. Class sizes in Palm Beach public schools are high and teachers must dig
in to prepare students for the state assessment test—from which voucher
students are exempt. “Parents are angry,” Vana reports.
Milwaukee Gets Milked
That scenario must sound familiar to educators in Milwaukee, Wisconsin, home
of the nation’s oldest voucher program, which covered 13,268 low-income
students in 106 private and religious schools in 2003–04.
Milwaukee launched its program in 1990 and it’s been roiled by scandals
involving subpar instruction and financial improprieties ever since. Earlier
this year the Milwaukee Journal Sentinel reported that administrators of the
private Mandella School for Science and Math signed up more than 200 no-show
students and then cashed $330,000 in state-issued voucher checks, which the
principal used to buy a pair of used Mercedes-Benz vehicles.
When a Milwaukee judge finally shut down the troubled school, public teachers
in the K–7 Sherman Multicultural Arts School welcomed a Mandella student
with open arms—even though his $5,943 voucher did not follow until months
later.
But the baggage was heavy. This child “wasn’t able to write his
name, didn’t know his letters or numbers, had a hard time focusing on
his work, and displayed a lot of inappropriate behavior,” reports fourth-grade
teacher Michele Roy, a building rep for the 8,000-member Milwaukee Teachers’ Education
Association (MTEA). “He told a K–4 teacher that he ‘played’ at
the Mandella school.”
What does it take to open a school and begin accepting voucher students?
“If you want to create a ‘choice’ [voucher] school, you
just fill out an application with DPI [the Wisconsin Department of Public Instruction]
and obtain an occupancy permit from the City of Milwaukee,” says Joe
Donovan, a spokesperson for the Wisconsin DPI. “That’s how easy
it is.” Easier than buying a gun or opening a nursing home. Wisconsin
requires neither criminal background checks nor the hiring of licensed staff—including
teachers—for voucher schools. Nor does the state mandate school governance
through open meetings, public reporting (be it of test results, racial statistics,
or dropout rates), or equal access to students with disabilities. And Milwaukee
voucher students don’t participate in the Wisconsin assessment system,
so the state can’t tell how well they do compared with students in other
schools.
That double standard makes Roy absolutely livid. “They get to have their
cake and eat it, too,” she fumes. “If taxpayers really knew that
their money is being spent without accountability there would be a revolt.”
While a voucher school can legally get by with a teaching force of high school
graduates, Roy’s neighborhood public school offers a highly motivated
staff of “certified teachers in every classroom, plus a certified exceptional
needs teacher, all of whom spend a lot of time putting pieces of the puzzle
together” for their students, she says.
History teacher Chris Fons, who holds two master’s degrees, is equally
proud of instructional quality at Riverside University High School, a selective
college prep school that closely mirrors the racial and economic diversity
of Milwaukee. While private schools may legally choose to only educate the “cream
of the crop,” Fons, an MTEA building rep, points out, “Milwaukee
Public Schools [MPS] have the public duty to educate everybody.”
The district needs every last dollar to fulfill that mission and yet it loses “some
$44 million annually from taxpayers to fund the voucher program,” says
MTEA President Bob Lehmann. “It’s taken right from the MPS budget
and then taxpayers have to fill the void. This robs the opportunity of public
schools to get better.”
Less funding means staff cuts and unrelenting pressure on front-line educators
like Roy and Fons, who, like their Florida colleagues, have watched their class
sizes skyrocket.
“We’re doing more and more with less,” laments Roy.
Writing
on the Wall
And the situation most likely will get worse before it gets better, since
vouchers come in many guises. Plans known as tax credit vouchers, which offer
dollar-for-dollar credit to individual or corporate taxpayers for money spent
on private school tuition, have been gaining in popularity, surfacing repeatedly
in state legislatures. This year NEA state affiliates helped slow down or stop
voucher or tax credit voucher legislation in, among other places, Arizona,
Colorado, Georgia, Louisiana, Missouri, New Hampshire, and Utah.
Given this legislative momentum and the marketing blitz of for-profit firms
entering the education sector, it’s reassuring to know that the number
of students enrolled in schools run by EMOs or using vouchers to attend private
schools is still comparatively small. But public schools remain vulnerable.
Ultimately, whether you’re fending off a voucher plan or a subcontractor,
prevention is the key, which means building strong connections between the
public schools and the community.
“We absolutely need to partner with other community organizations that
are impacted by voucher programs, that have a common interest in maintaining
our cities and our neighborhoods,” says NEA voucher specialist Susan
Nogan. “Bring everybody together to talk about what’s good in public
schools, what works, and what’s needed.”
In Milwaukee that meant forming a coalition between MTEA, parents, and faith-based
groups to build support for the public schools and opposition to the city’s
voucher plan.
In Illinois, meanwhile, where state law obligates school districts to consider
any bid offered by a private transportation company, members of the Naperville
Transportation Association (NTA) focused on educating their community and school
board about the real costs of privatizing transportation. The strategy worked,
and the school district stuck with the public operation.
NTA just worked the system, says Evelyn Furneaux, NTA president. Association
members met with school officials and secured the right to attend any district
discussions about the private bids. The drivers also met with presidents from
other associations to rally their support and wrote letters to the local newspaper
about their cause. At the same time, three members of the school board were
facing re-election. So NTA organized a forum to introduce the candidates to
the community, question them about their views on privatization, and educate
the public about the drawbacks of privatizing their services.
“These drivers build strong relationships with the students and the
parents. They get a lot of personal attention from us,” says Furneaux. “I
don’t know if they would get that so much from someone who just viewed
this as a job.”
That’s a message she and others say ESPs and teachers need to shout
from the rooftops.
Private firms “are out selling their product, and we don’t sell
ours enough,” says Laurie Mozlin, who is teaching at Mahone Middle School
in Kenosha, Wisconsin, this fall.
In the end, the solutions to public education’s challenges will come
from within the public sector, not outside it, she adds. “Beware of people
who claim to have the answers. Stick with the people who are the experts at
it. Trust me, I’ve seen the worst and survived.”
And What About You?
What does privatization mean for your job and the schools in your community? Find
out more in our special online bonus edition. You’ll learn:
Where in your state or region education
management organizations (EMOs) have set up shop—and what the
research really says about their performance.
Talking points on school vouchers to use with your
legislator (or your opinionated brother-in-law).
The facts on how privatizing Social Security could
derail your Golden Years.
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Quality
Dishing Up a Quality Program
 Photo
by Kevin Fowler
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For five years, Marriott Corp., a for-profit food services company, ran the
school cafeterias in Adrian, Michigan—and ran the food service program
into debt. Employees suffered through involuntary job transfers, while students
endured smaller meals made with poor quality food, says Jennie Zubke, head
cook at Adrian High School. As a result, fewer students lined up for lunch.
Then in 1995, the district’s food service employees proposed an innovative
idea: let the workers run the program. With support from school administrators,
teachers, and parents, the food service ESPs convinced the school board to
ditch Marriott and let them cook up a plan to run the operation.
“It makes us, as the employees, feel we are doing something important,
not just in the kitchen,” says Jody Faust, assistant cook at Adrian High
School. “That we can manage our operation is a boost for our group. It’s
a sense of ownership.”
Now, a committee of food service employees and district managers handles everything
from menu planning to equipment purchases and hiring decisions. The head cooks
and managers hold standing positions on the committee, while the food service
employees elect additional representatives to serve two-year terms.
Since the change, employee morale has increased substantially, says Zubke,
as has student participation in the food program. And, under the leadership
of the ESPs, the food service program has done something Marriott never accomplished:
it has earned a profit every year. And those profits go back into the school
system, not into the pockets of a private corporation.
Most importantly, the people making decisions now about the nutritional needs
of students are the same people who serve them lunch every afternoon.
“We are with the kids every day, we know what the kids need,” says
Faust. “With a company, they don’t interact with students like
we do. A lot of the personalization is lost there. We’re with the kids
and we’re taking all this information back to the committee, so it’s
a really accurate account of what’s going on.”
—Kristen Loschert
Risky
Privatizing Social Security An Unwarranted Gamble
 Photo
by Sandy Schaeffer
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Retired Orlando, Florida, teacher Ulysses Floyd left the classroom behind
knowing that he could look forward to a guaranteed check from Social Security
each month to supplement his teachers’ pension. He’s worried, though,
that younger teachers and education support professionals may not be able to
depend on Uncle Sam to hold up his end of the bargain.
The reason? President Bush and other politicians aim to privatize Social Security
to allow workers to invest part of the money dedicated to Social Security into
a private, individual account. The idea rankles Floyd, who recently e-mailed
Bush to urge him not to weaken Social Security with a risky privatization scheme.
“We all put money into the system together, just as my father and his
generation put the money in before us,” says Floyd, who gets a monthly
check of about $800 that increases each year with a cost-of-living adjustment. “If
Social Security becomes privatized, it will be everybody for themselves. And
we’ll all be at the whim of the stock market.”
Social Security, like the pension plans held by the vast majority of public
school teachers and ESPs, is considered a defined-benefit plan. Put in a certain
number of years on the job, plug your salary and a few other variables into
your system’s formula, and you can count on the resulting dollar figure
to be there every month during your retirement. Other retirement plans, such
as the 401 (k) option, are termed defined-contribution plans—and they
are not guaranteed. With these plans, you’ll never be certain what monthly
amount you’ll be able to draw from the account during your retirement.
Worst-case scenario? Your investments tank while inflation and other costs
(such as health care) drive up your spending, draining your retirement portfolio
just as you settle into your “golden years.”
The proposal to privatize Social Security is not new, but it heated up again
when Bush, in his State of the Union address, called for making Social Security “a
source of ownership for the American people.” That’s privateer-speak
for unleashing hordes of investment advisors and brokers on younger workers
to “help” them figure out where on Wall Street to invest their
hard-earned benefits.
Then, in February, Federal Reserve Chairman Alan Greenspan made headlines
when he said Social Security was in financial trouble, and that Congress should
consider cutting benefits. Privatization advocates came out swinging, saying
only private accounts could help restore Social Security to sound financial
footing.
Dean Baker, co-director of the Center for Economic and Policy Research, calls
the uproar over Social Security’s finances a “phony crisis.”
“Social Security is tremendously popular,” Baker says. “The
Administration can’t say ‘let’s get rid of it,’ so
they say the system is going under. They say, ‘we can’t let that
happen. We have promises to keep to our retirees and privatization is the only
way to save it.’”
The fact is, privatization would worsen Social Security’s fiscal well-being—putting
future beneficiaries at risk. The transition to a new system that included
private accounts could exceed $1 trillion, and would force cuts in guaranteed
benefits to younger workers. “To have younger workers invest even a modest
amount in private accounts—say 10 percent of their contributions—they’d
have to cut benefits by as much as 50 percent,” says NEA Secretary-Treasurer
Lily Eskelsen. “So you’d have a private account that goes up and
down with the stock market, while your Social Security benefit is cut in half.
That’s the trade-off, and you’d have no safety net.”
Privatizing Social Security would be sure to fatten the wallets of financial
firms, but it’s a bad deal for public employees. So why is it getting
another airing? Floyd has one theory. “This is the Bush mentality—to
privatize everything,” he says. “He represents big business, and
the more he does for them, the more they’re going to give to his campaign.
But I can tell you that if we privatize Social Security, it may not be there
for you when you need it.”
—John O’Neil
Additional reporting by Barbara Jacob
Fight Back
Send the Privateers Packing
So, privateers are romancing your school district to drum up more business.
Is there anything you can do to stop them? You bet. ESP members wrote the book
on fighting privateers when they come calling. With the right plan, a united
local, and some good old-fashioned hit-the-streets footwork, you’ll show
school officials and community members the public employee difference. To get
started:
Point to the contract
Many locals have bargained for language that prohibits privatization or that
limits the reasons districts may use it, says Donovan King, labor relations
research specialist in NEA Collective Bargaining and Member Advocacy. Now’s
the time to use it. Local Associations also can lobby for benefits for employees
adversely affected by privatized services, he adds. You have to push for contract
protections before privatization’s knocking on your door, though. “Once
you’re in the middle of a [privatization] fight, it’s very difficult
to get anything at the table,” King says.
Meet with the threatened
employees
Emotions and rumors will fly, so now is the time to get everyone on the same
page. The local president should meet with the employees facing privatization
to dispel any rumors and give members an opportunity to discuss concerns in
a safe environment. This first step shows employees their local is behind them.
This is also the time to organize a committee of members to coordinate your
response campaign.
Organize your campaign
Develop a calendar of events leading up to the date when your district intends
to act on its plans to privatize. For instance, bus drivers may want to coordinate
a “Walk the Route” event where they walk their normal bus routes
one weekend and meet with parents to let them know about the cut in services
they face. The local Association also should monitor school board action on
the proposal and investigate any privatization plans in neighboring districts.
Those steps worked for members of the Support Personnel Association of Lee
County, in Ft. Myers, Florida, when they successfully turned back a bid by
ServiceMaster to take over some custodial, grounds, and maintenance duties,
says Bob Rushlow, the local president. “We sent e-mails to schools all
over the country and got great information about problems with ServiceMaster
in other areas,” information they then presented to the school board,
Rushlow says. “Now we attend every board meeting and watch for any item
relating to subcontracting. We’re vigilant.”
Compare your experience
with the privateers’
Collect information about workers’ job duties, including those they
perform outside their job descriptions, and job training. Find out how long
they have worked for the district and lived in the community. Do any employees
have special talents or volunteer with a community group? All of these skills
benefit students and staff and will be lost if the district privatizes. Remember,
privatization isn’t about saving money. It’s about cutting services.
So show the school board that public employees make a difference. “You
can always find someone to do the job cheaper,” says Robert Ray, UniServ
director in Naperville, Illinois. “But you won’t find anyone to
do the job better.”
Reach out to other school employees and the community
If the district wants to privatize one job group, most likely others will
follow. Reach out to other educators and find out how privatization would affect
their jobs and ask them to support your campaign. Then, hit the streets. Meet
with members of the local PTA, Lions Club, or Jaycees to let community members
know what students will lose if the district privatizes. Have each Association
member talk with at least eight neighbors about your cause. “The only
thing that succeeds in keeping the privateers out is public opinion and getting
the community onboard against the privateers,” says Paul McBride, a former
ESP organizer for the New Jersey Education Association.
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