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Growth depends on how you count heads

As I See It

When is less really more? Well, one way would be outsourcing federal jobs to private contractors to give the appearance of shrinking the government while simultaneously hiring more federal employees in other departments. That appears to be a strategy in the Bush Administration.

Here’s what’s going on.

Last November Congress passed a bill that gave Bush broad powers to hire, fire and move workers in the 22 agencies that will be merged into the new Homeland Security Department. In addition to merging government agencies, the Administration is hiring a whole new flock of government agents to enhance our security. This runs smack in the face of Bush’s pledge to shrink government. In order to hire more workers without appearing to increase the size of the federal government something had to change. Imagine the hay Democrats would make if the number of federal employees swelled during the Bush Administration.

And a solution was found. Perhaps it was part of the plan all along, but the timing is suspect. To shrink the swelling government, as many as 850,000 government jobs will be put up for competition from private contractors in coming years. The theory is that the services can be provided cheaper by private contractors than government workers. That’s probably true if the government drives a hard bargain in the private sector. The new federal jobs are in law enforcement, border control, customs, immigration, intelligence, transportation and defense.

The disappearing jobs in question are running cafeterias, making travel arrangements, mowing lawns, picking up trash and other activities deemed “commercial” or “semi-commercial.” Needless to say these activities will still be performed at government expense since grass gets mowed and trash gets picked up.

How are the federal employees responding to the threats of privatization? Predictably they are disturbed. “This is a conscious effort to finish off federal trade unions,” Wiley Pearson, an analyst at the American Federation of Government Employees, said in a recent Christian Science Monitor article. Other labor leaders are similarly disturbed by the Bush Administration policies toward government workers. Shortly after the November elections, AFL-CIO president John Sweeney said, “We’re going to have the White House, the House and the Senate in the hands hostile to working families.”

The administration says the goal of outsourcing federal jobs to private contractors is efficiency and economy. The potential for that happening is pretty good. Unionized workers, including many federal government employees, earn wages that are 11.5% higher than nonunion workers do if experience, education and other factors are considered. Further, they are almost 30% more likely to have employer-provided health insurance.

So what does all this mean? I think a number of reasonable inferences can be drawn. First, the Bush Administration is conservative and would like to cut the cost of government, which they believe outsourcing some mundane federal jobs will do. Secondly, outsourcing reduces the headcount on the federal payroll and looks good on paper. Third, the war on terrorism is going to raise the cost of government substantially regardless of any number games conceived to make it seem otherwise.

Will it be a good thing or a bad thing? Probably a good thing since it’s hard to argue against reducing the number of people on the federal payroll. The cost savings, if any, will likely be miniscule in the overall scheme of things. So, after all is said and done, it’s a politically motivated numbers game. Too bad that our leaders have to resort to slight of hand deceptions to fool the populace, but things are the way they are.

Thought for the Moment — To get profit without risk, experience without danger, and reward without work is as impossible as it is to live without being born. — A.P. Gouthey

Joe D. Jones, CPA, is publisher of the Mississippi Business Journal. Contact him at cpajones@msbusiness.com.


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