Alert! Rahm Takes First Step to Privatize Chicago Water - Under the Radar

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[Original Headline of Chicago Reader article ]  

To Mayor Emanuel, some jobs are worth more than others--What's really saved by privatizing a couple dozen positions at the water department?

 

 By Ben Joravsky, Chicago Reader, Nov. 7, 2012                        

Pretty in pink slips

 Pretty in pink slips

The time has come to consider the curious contradictions in Mayor Emanuel's views of how government can help save or create jobs.

When the state of Illinois announced it was giving a multimillion-dollar tax break to the Chicago Mercantile Exchange—one of the world's wealthiest trading houses—the mayor hailed it as a boon for the local economy. The truth is that CME is cutting jobs as it moves toward electronic trading.

In contrast, the mayor recently decided to pink-slip 34 city workers in a privatization deal that he says makes government more efficient. Yet the city's only saving $100,000 by replacing these middle-class jobs—most held by black south- and west-siders—with part-timers.

In short, he hails tax breaks for millionaires as economic development, and firing working-class Chicagoans as reform.

Something's wrong here, people.

At issue are his efforts to make good on campaign promises to save money by privatizing city services—in this case by laying off the 34 workers from the city's water billing center. He would then pay NTT Data, a company based in Japan, to run the operation.

Look, I can appreciate the mayor's zeal to crack down on wasteful spending. And I certainly appreciate his attempts to hold the line on rising property taxes.

But at some points we have to wonder whether there's one standard for the connected well-to-do and another for everyone else.

It's hard to build a case against the 34 water call employees. They perform a vital service, answering calls and providing information about water bills. No one's accused them of malingering. In fact, fewer people are doing more work as the staff is cut and calls increase—no doubt thanks to Mayor Emanuel's hike in water and sewer fees this year.

However, Emanuel claims the city will save $100,000 by farming out the service to NTT while drastically cutting down waiting times and improving service at the call center. He says he doesn't know how much NTT will pay its employees or whether they will have health benefits.

Not surprisingly, the workers and their union, AFSCME, oppose the deal. Several of the employees showed up to last week's aldermanic budget hearing at South Shore High School to denounce it. As they pointed out, the city's potential savings of $100,000 is a relatively paltry sum in a budget of $8.3 billion. It's not even enough to cover the increase of $170,000 in property tax funds Emanuel wants to spend on the mayor's office, speaking of operations that won't be privatized anytime soon.

In addition, the workers cited Mayor Emanuel's speech at the Democratic National Convention. "He stood on the world's stage and said he was going to join the president in preserving middle-class jobs," one employee told the aldermen.

All of the workers live in Chicago because of residency requirements imposed on city employees years ago by Mayor Richard J. Daley—the first Mayor Daley. He understood that decently-paid middle-class employees—like cops and firefighters, teachers and water call employees—stabilize communities and pump millions into the local economy.

Ironically, this argument echoes the one Mayor Emanuel uses to justify tax breaks to CME and tax increment financing subsidies to the University of Chicago, Hyatt hotels, and the developers of the upscale skyscraper at Lake and Canal, to name but a few. In each case, the mayor promised that there will be a collateral benefit from creating jobs whose workers will have money to spend on restaurants, bars, grocery stores, etc, thus creating more jobs. And so forth.

Well, by that argument, the roughly $45,000 a year the city pays each of the water bill workers can be viewed as economic development money for Woodlawn, South Shore, Englewood, and the other cash-starved communities they live in. In other words, the mayor's diverting public dollars from the south and west sides—which desperately need them—to Tokyo.

The water department workers found a sympathetic listener in Sixth Ward alderman Rod Sawyer, who was at the hearing. "Government workers are the backbone of our communities," says Sawyer. "If you fire them, there's a ripple effect. Businesses get hurt. Families get hurt. All of this to save $100,000? When you add it up, what are you really saving?"

Ironically, the mayor's plan to privatize the water billing center came a few weeks after Michelle Obama's inspirational speech at the Democratic National Convention. Obama told the story of how her father—a pump operator at the city's water department—worked hard, rarely missing a day, so he could scrape together enough savings to pay for his children's college education. "He and my mom were determined to give me and my brother the kind of education they could only dream of," she said. "You see, for my dad, that's what it meant to be a man. Like so many of us, that was the measure of his success in life—being able to earn a decent living that allowed him to support his family."

Like many other Chicagoans, Sawyer was moved by the first lady's speech. "I know a lot of people like Michelle Obama's father in this city," says Sawyer. "You can't just fire them and not have a consequence to our communities."

And consider that the city shed another 1,200 jobs—three-quarters of them on the south and west sides—as Mayor Emanuel sliced the budget and outsourced work this year, according to an analysis of payroll records by my colleague Mick Dumke.

As a result, Sawyer is proposing an ordinance that would require City Council hearings for any proposed privatization deal like the NTT contract. The city would have to justify such contracts in terms of whether they're really going to save as much as the city says they will in the long run. For instance, how much will the replacement workers earn? Will they be part time or full time? Will they get health benefits? Or will they have to rely on public clinics and hospitals? Will they make enough to money to support their families without getting government assistance? If not, how much money are we, the taxpayers, really saving? And why would we want to subsidize a company that pays substandard wages?

"It's more than a line item," Sawyer says. "You have to look at the total impact on the community."

Sawyer's hoping to find enough aldermanic support—especially among his black colleagues—to pass the ordinance even if Emanuel's against it. Meanwhile, behind the scenes, the mayor is trying to get Sawyer to back off by assuring him that the 34 workers will be protected. In other words, the mayor will find a spot somewhere else for them doing something, anything, just so Sawyer drops his ordinance.

"There's a lot of unanswered questions," says Sawyer. "I'm hoping the mayor sees the merit in what we're trying to do. It's not antiadministration—it's pro Chicago."

Correction: This article has been amended to reflect that the Chicago Mercantile Exchange is one of the world's wealthiest trading houses.

 

 

 

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