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NEW STUDY: Reckless outsourcing hurts communities

Saving money is practical, as long as it doesn’t hurt your quality of life. You don’t want to shutoff the heat in your house to save a few bucks if it means your whole family gets sick, right?

When state and local governments outsource public services to for-profit corporations, the justification is almost always about saving money.  But according to a new study, too often outsourcing ends up hurting the community as a whole. 

The Decision to Contract Out: Understanding the Full Economic and Social Impacts,” a new report by Professor Daphne Greenwood at the University of Colorado shows that outsourcing reduces worker wages and benefits, which leads to an array of negative affects for the entire community. Fewer nights out at local restaurants or sporting events means fewer dollars being invested in the local economy.  

And the study shows that the effects of reckless outsourcing go beyond economics. Outsourcing puts public health and safety at risk, widens the wage gap between men and women as well as whites and people of color, and forces more workers and retirees onto public assistance.

The study even includes a guide for calculating the social and economic consequences to help leaders fully assess the impacts of outsourcing before it’s too late. 

This groundbreaking report is truly worth reading and sharing. Because saving a few bucks today shouldn’t cost us dearly tomorrow.