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Outsourcing Opponents Seek to Discredit Private Sector

Lisa Snell
January 1, 2005

As the private sector offers services in more segments of the $500 billion K-12 education sector, special interest groups are working to discredit not only private-sector involvement in public education, but also the private sector as a whole.

Two recent examples illustrate how teacher unions and other education advocacy groups often present their members with a negatively biased view of the private sector and its involvement in education. This approach leaves educators unexposed to the larger body of evidence that shows competition and privatization have improved service in almost every business sector, including education.

NEA Today: Horror Stories

In the September 2004 issue of NEA Today, the monthly organ of the National Education Association, a series of articles collected under the title "Cash Cow" highlights privatization failures and gives union members advice on how to fight privatization initiatives. The report fails to mention the hundreds of case studies showing benefits to children and the public from school privatization.

The NEA Today series argues that when "private profits outweigh public accountability, educators and kids pay the price." As evidence for the failure of privatization initiatives, the articles offer stock horror stories of privatization missteps and selected studies showing privatization is more expensive than traditional public-sector operation.

The series fails to mention the large body of research that shows substantial cost savings and improvements in service quality from privatization of school support services. According to the most recent school privatization survey conducted by American School & University magazine, 32 percent of the nation's school districts outsource transportation and about 17 percent outsource food service. Extensive literature reviews of cost savings have found between 20 and 40 percent savings from school outsourcing.

For example, in 2002, the Philadelphia school district faced a $28 million deficit. By turning to privatized transportation, custodial, food service, and other support services, the district saved $29 million over two years and erased its deficit—while running a robust teacher recruitment program and without firing any teachers.

Despite its focus on privatization failures, the NEA Today series reports that private-sector involvement in K-12 education is increasing. The teacher union portrays the growth of private industry in education as a war between "those of us who believe in free enterprise" but think schools don't fit the for-profit model, and free enterprise firms who want to expand "at any cost." Those firms, according to the article, use "slick marketing" to sell their services but then "cut corners every chance they get" because "[t]hey are not in it for the kids."

NEA Today offers NEA members explicit strategies for fighting off privatization. Ironically, some of the examples given of where privatization was avoided are of workers who became more efficient and delivered better service because of the threat of privatization.

For instance, one of the examples discusses a group of food service workers in Adrian, Michigan who won back their food service operation from Marriott Corp. by offering more nutritious meals, using innovative employee work teams, and turning a "profit" that was put back into the classroom. Missing from the discussion, though, is the conclusion that competition encouraged these public employees to work more efficiently.

As well as strategies to avoid privatization, NEA members are offered several specific strategies to prevent privatization. The most lethal of these is to use the collective bargaining process to legally prohibit the possibility of privatization or outsourcing—i.e., NEA members should agree only to contracts that explicitly prohibit outsourcing. Advice also is provided on organizing a campaign and doing effective community outreach to stop privatization.

Commercialization in Schools

The NEA position on outsourcing was echoed in a September 2004 report on commercialism in education from Arizona State University's Alex Molnar, who negatively portrays private-sector involvement in education as exploiting children. Even sponsorships, such as corporate support of the National Merit Scholarship Program, are dismissed as programs that "often serve the donors' commercial purposes."

The report, Virtually Everywhere: Marketing to Children in America's Schools, measures what Molnar views as the evils of commercialism in schools by counting the number of media references to private-sector involvement in education. Those references include not only privatization but also corporate sponsorships, exclusive licensing agreements, sponsored educational materials, and fundraising.

Molnar reports that media references in five out of eight categories of schoolhouse commercialism increased between July 1, 2003 and June 30, 2004. Overall, he finds media references to commercialism increased 9 percent as compared to the 2002-2003 school year.

Molnar and his Commercialism in Education Research Unit at Arizona State are affiliated with the Campaign for a Commercial-Free Childhood (CCFC), a national coalition of health care professionals, educators, advocacy groups, and concerned parents. CCFC's mission is "countering the harmful effects of marketing to children through action, advocacy, education, research, and collaboration among organizations and individuals who care about children. CCFC supports the rights of children to grow up—and the rights of parents to raise them—without being undermined by rampant consumerism."

Molnar concludes in his report that commercialism in schools—whether selling junk food, fundraising, or providing sponsorships—undermines the ideal of schools as institutions for preparing the next generation to participate fully in a free and democratic society.

"The more corporate special interests are allowed to influence what schools teach—and by extension, limit what they cannot teach—the less students are seen as active citizens-to-be rather than as passive consumers-to-be-sold, the farther our educational system moves from that ideal," he writes.

Molnar's report offers no evidence of corporations limiting curriculum or blocking participation in the democratic process. His report and the recent NEA Today demonstrate the need for a more balanced presentation of private-sector involvement in education for the benefit of administrators, teachers, and parents.

Lisa Snell is director of education and child welfare at Reason Foundation. She formerly taught speech courses at California State University, Fullerton.


Lisa Snell is Director of Education


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