The New York Times reports on Michigan's attempts to save money by contracting out nursing assistant jobs at a state-run veterans home, moving from the home's long-time union workers to low-wage contract workers. There are a few problems with this. The inescapable one at the moment is this:
In Michigan, the plan to replace state nursing assistants at the veterans home resulted in a lawsuit contending that some temporary workers employed by the contract company had already jeopardized patient care. In one case, the suit says, a resident fell off his bed and broke his neck after being left unattended by a contract worker. A judge has granted a preliminary injunction that keeps the state employees at work while the lawsuit moves forward.
The injunction also prevents new workers from J2S Healthforce Group, which recently won the contract to replace the state employees, from taking jobs at the facility.
Oopsies! But a broken neck and a resident fed solid food who was not supposed to be, among other incidents, all of which the state dismisses as isolated, aren't the only problems here. For one thing, bringing in a new workforce paid around $10 per hour with no benefits instead of one paid $15-20 per hour with benefits ends up just shifting some costs around, as the low-wage contract nursing assistants are forced to rely on government aid like food stamps and child care assistance. The federal government takes on more of that expense, so the state of Michigan may still save, but ..."we saved by forcing full-time workers onto government assistance" isn't much of a rallying cry. (It isn't, is it? I'm hoping even most Republicans aren't quite that far gone.)
Then there's the question of how much is actually saved. When jobs are contracted out, the workers doing the jobs may earn less than government employees would. But the workers doing the jobs aren't the only ones collecting pay. For instance, the Michigan nursing assistant jobs are being outsourced to J2S Healthcare Group, of which the Times reports that:
Tim Frain, the chief executive of J2S, declined to comment.
What do you want to bet that guy gets health care, and retirement benefits, and earns more than $10 an hour? And that he's probably not the only person at J2S of whom those things are true. So while the hourly wage a nursing assistant working for J2S gets is $10, the state is paying J2S more. How much more, the New York Times does not report. But Eclectablog points out that the state pays J2S Healthcare Group $15 an hour for those $10 an hour nursing assistants.
Factor in the occasional broken neck leading to a lawsuit, other quality-of-care issues associated with increased employee turnover, and the burden on the social safety net of a bunch of people working full time and still needing food stamps, and the $4.2 million savings the state of Michigan will reap comes with a major price tag in human misery and damage to the state's social fabric. Also, too, the $1.7 billion corporate tax cut the state passed last spring would have paid for at least a couple of state-employed nursing assistants making $15 an hour plus benefits.