Moderated by Tom Sabulis
The MARTA privatization debate continues today. The president of the local union criticizes management and says that going private means sending public dollars overseas and contributing to sweatshop conditions. But a think-tank executive believes that competition will add jobs, fix absenteeism, cut losses and, ultimately, save metro Atlanta’s transit agency.
Commenting is open below Benita Dodd’s column.
By Curtis Howard
Some lucky billionaire is about to get an early Christmas present if the board of directors of MARTA follows through on proposed plans to privatize a public transit system that belongs to the taxpayers.
The billionaire might be from the French-based Veolia Transportation or the Scotland-based First Transit, so we know one thing for sure: The fares we pay will not be returned to help the economy of Atlanta. They will be shipped overseas while transit users get less service — especially night and weekend service — and see corners cut on safety.
Welcome to the mismanaged policies of the MARTA board: When all else fails because of mismanagement of the system, blame it on the workers who have already given $90 million in concessions.
Throw around canards like abuse of overtime and absenteeism (caused by the intransigence of management), then dismantle our system, the jewel of the South, so foreign companies can bleed it for every last dime in the fare box, then walk away.
According to Page 33 of the KPMG audit, MARTA’s labor costs, wages and paid time off as a percentage of total personnel costs are 3.5 percent lower than transit peers around the country.
Also, in 2011, MARTA contributed $18.8 million to its managers’ pensions.
Here are some other reasons to oppose privatization:
Service cuts are always part of the agenda. Need a weekend or a late-night bus? Call a friend or taxi.
Privatization means sweatshops on wheels — lower wages, slashed health benefits, replacing full-timers with part-timers, and erratic service.
Political cronyism. Contracts go to firms that make hefty political contributions. In Phoenix, Veolia hired the mayor’s girlfriend.
The inevitable transit layoffs will hurt the economy and adversely affect you as a user of the system as well as your neighbor. The laid-off MARTA employee is your pastor, the coach of your daughter’s soccer team, the person who reads to the sick and the elderly, and all our members who are an integral part of our vast transit-union volunteer community.
Private companies have no roots; like transit vagabonds, if their profits aren’t high enough, they move to the next city.
Privatization is a misuse of public property.
Privatization already has been tried with MARTA and failed.
The idea that public transit, which is the lifeblood of our economy, should be turned over to a profit-making company is ludicrous.
How much of a “profit” do our schools make? Or our police and fire departments? Our sanitation department?
The only reason a foreign company would be interested in the “well-being” of Atlanta residents is to skim profits.
Reliable mass transit and well-paying jobs are basic civil rights and should not be given away to foreign companies.
Curtis Howard is president of Amalgamated Transit Union Local 732.
By Benita Dodd
The failure of MARTA, the backbone of Atlanta’s public transportation, will devastate the region’s workers and mobility. KPMG’s recent audit warns that on its current course, the transit authority is unsustainable: MARTA must cut $25 million a year. Managed competition, including privatization and outsourcing, is critical.
There are two reasons to embrace this approach. First, Harvard professor Stephen Goldsmith, as mayor of Indianapolis, identified government’s role in his “Yellow Pages” test: “If the phone book lists three companies that provide a certain service, the city probably should not be in that business.” The same should apply to MARTA: Examine whether services can be provided more efficiently by private companies.
Second, managed competition allows an agency’s existing department to place its bid for a contract — say, MARTA’s janitorial contract — alongside private vendors’ bids. The department must demonstrate that it could do the job as well as or better than a private company. Clearly, there is a need to incentivize MARTA’s workers and departments to greater efficiency. Consider that much of MARTA’s problem is union-related:
Salaries and benefits for its 4,500 employees comprise 77 percent of MARTA’s operating budget; 64 percent of employees are unionized. Five years into a pay freeze, janitorial workers (unionized) earn 46 percent more than the national private average.
Apparently the higher pay is just sickening: Annually, the high absenteeism rate forces MARTA to devote $11 million to backup staff. Workers’ comp claims are $5.5 million higher than the national public- and private-sector average, and health-care claim costs are $8.9 million higher than the national average.
Pension costs are $22 million higher.
All this in a shop where union workers pay “significantly less for medical coverage and pension costs than the national average including both public and private sectors,” KPMG notes.
KPMG also proposes privatizing payroll and human resources. Surely there’s more. Privatizing new capacity and routes is an easy option. Paratransit service is a great chance to create private-sector jobs and reduce MARTA’s costs.
Why the private sector? Private companies and vendors operate in an environment where prices, profits and losses, and customers matter. They understand success involves more than just a captive audience; they must provide a service that invites repeat business and value for money.
Naysayers will cite failures of Atlanta’s water system privatization and MARTA’s previous attempt to privatize paratransit. Both disasters are a strong reminder that government should ensure that a contract defines the expectations of each party. Agency oversight, not agency micromanagement, is required.
Managed competition will turn MARTA’s focus to providing transportation instead of preserving union jobs. The livelihoods of thousands of low-income commuters — and Atlanta’s transportation future — depend on it.
Benita Dodd is Vice President of the Georgia Public Policy Foundation.