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Amy Traub

Higher Costs and Lower Quality as Public Services Go Private

As budget crises force cities to cut back public services, private companies are stepping in to profit from the unmet demand. But there’s a cost to communities when markets take over what were once public functions: the new private services are often more expensive and with less public oversight, they may also offer lower quality.

In California, revenue-strapped community colleges are struggling to cope with escalating demand for affordable higher education. Many find themselves unable to offer sufficient spots in the courses students need to fulfill graduation requirements. Enter the private sector. The New York Times reports:

Kaplan University has an offer for California community college students who cannot get a seat in a class they need: under a memorandum of understanding with the chancellor of the community college system, they can take the online version at Kaplan, with a 42 percent tuition discount. The opportunity would not come cheap. Kaplan charges $216 a credit with the discount, compared with $26 a credit at California’s community colleges.

Why pay $26 a credit to interact in-person with fellow students and professors when you could pay greater than eight times more to participate in a potentially larger and less personal course online? The Times notes that “Thus far, Kaplan has no takers for its courses.” But if community colleges are forced to cut back far enough, the private alternative may be the only choice for many students.

Meanwhile in New York it’s public transportation that’s taking a beating. As the Metropolitan Transit Authority cuts bus service, the city is now establishing routes for private commuter vans to serve areas suddenly lacking transit options. The catch?

…passengers who are connecting to a subway or bus will have to pay $2 to ride the vans as well as public transportation fare, which is $2.25 for a single trip. “The issue here is not whether it’s more expensive or less expensive; it’s whether the service exists or not,” Mr. Bloomberg said…

The city insists it will step up enforcement of private van companies, yet the Times acknowledges that the plan “expose[s] passengers to the dangers of an industry that had operated with little oversight over the years…”

We’ll continue to look at how these privatization efforts degrade job quality for the employees involved, be they transit drivers or college professors. But the impact on folks who used to be known as “the public” but now look more like a profit-making customer base is all too clear.

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Posted at 12:13 PM, Jun 24, 2010 in public services
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