Saturday, June 9, 2012

The secret corporations won't tell you

Corporations often try to privatize a government entity using the ruse the corporation will save the public money.

But is that really true?

A corporation can always find some company to write up a study showing how privatization will save money. However, in the long run, corporations operate with higher overhead than the government and provide lower salaries and benefits than government employees get.

Employees are often hired off the street with minimal credntials and get little training once hired.

For example, Gov. Rick Scott wanted to privatize all of the prisons south of Orlando.

Both GEO Group and Corrections Corporation of America (CCA), the nation's largest operator of for-profit prisons, have lobbied heavily for this privatization scheme,

What did they want to privatize Florida prisons? Believe it or not, a 20 year contract. 

In private enterprise, even 5 year contracts are not that common.

Consider, too, that CEOs now make about 380 times what the average worker makes. Add the profit motive and the payment of stock dividends to investors for publicly owned corporations and most private endeavors cannot compete with the government.

Nor should they. Most corporations are not large enough to handle government functions This means that a general contractor will compete for the contract and then subcontract out parts of the contract, which adds to the overhead.

Privatized government entities also have to be overseen by public service cooperation (PSC) to make sure they are operating IAW the law and the contract. This, too, adds to the cost of privatization

Fortunately the prison privatization scheme was defeated in the FL Senate. You can be sure that GEO Group and CCA will be back in Tallahassee next year trying to privatize the FL prison system. 

Corporations are amoral entities that are motivated by profit, not the public interest.

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