SUBCONTRACTING AND "PRIVATIZATION" OF WORK: PRIVATE AND PUBLIC SECTOR DEVELOPMENTS

MARVIN J. LEVINE

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DOI: 10.2190/WQUX-E098-2FME-EULD

Abstract

Employers often resort to the subcontracting or farming out of work to outside firms to effect economic efficiencies. Recently, this cost-saving technique has gathered momentum, particularly in the public sector, and become increasingly controversial under the label of "privatization" of formerly governmental functions. Unions attempt through negotiations and contract language to limit the adverse impact of this practice on the employment security of their members by restricting its scope. Labor organizations contend that the use of private companies to perform public services often results in higher costs, lower quality, loss of accountability, and corruption. Proponents maintain the overriding motivations for contracting out are to cut the cost of providing governmental services and to employ specialized skills and resources that may be unavailable within government. The trend toward subcontracting is increasing, particularly in the public sector, despite the pressure of restrictive legislation.

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