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Privatizing Indiana

Academe, Sep/Oct 2007 by Brantlinger, Patrick

A dedicated group of Hoosiers is fighting the outsourcing of the campus's printing services, motor pool, and bookstore.

Seeking to raise money for new academic buildings and programs, Indiana University's board of trustees is exploring outsourcing its "auxiliary-service" units. These units manage printing and food services, the university's bookstores, campus motor pools, and other functions. To prevent job loss and wage cuts among hundreds of long-tenn university employees, the pro-labor organization Jobs with Justice-of which I am a member-has joined forces with local and state officials and IU's unions: the American Federation of State, County, and Municipal Employees (AFSCME), which represents service and maintenance staff, and the Communications Workers of America (CWA), which represents clerical and technical employees.

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Recently on CNN, commentator Lou Dobbs railed against privatizing the Pennsylvania Turnpike: "Where is the logic behind turning over a public highway, paid for by public money, to a corporation?" The public owns it and should profit from it. In passing, he mentioned that Indiana governor Mitch Daniels had foolishly privatized the Indiana Toll Road.

Daniels also signed a $1.16-billion deal with IBM to run Medicaid, food stamps, and other poverty-relief programs. In fact, he would like to privatize the entire state welfare system, which he calls "the worst" in the nation. (Just how he knows that it is the worst is unclear, but he obviously dislikes welfare.) To balance the state's budget, Daniels is dead-set against raising taxes, so he wants to outsource many more public services. As a result, taxpayers will pay corporations-not the state-to run them, and less money will go to the state. Daniels is also seeking to privatize Indiana's lottery. It will supposedly continue to provide funds for the state while making profits for its corporate operator. IU's administrators cheered Daniels on as he announced this privatizing gamble; they hope it will generate new funds for scholarships, among other items. (A proud first-year student tells her parents, "I'm a Lottery Scholar!")

Long-term Costs

Climbing on Daniels's privatizing bandwagon, IU's board of trustees outsourced the motor pool at the Bloomington campus and all of the bookstores in the university system. The motor pool is self-contained and has little impact on students; its workforce is small. The contract to outsource it preserved eight out of twelve jobs; many more jobs are at stake in the bookstore deal with Barnes and Noble. Inevitably, outsourcing will mean a decrease in control and oversight by IU's administration. We hope, however, that the trustees will protect the jobs, wages, and benefits of IU's current employees. No further contracts should be signed without seeking the agreement of IU's unions.

Bloomington mayor Mark Kruzan and seven city council members recently wrote to the trustees about some of the potential costs to IU and Bloomington of privatization: loss of jobs, an added burden to local social services, and a decline in community goodwill. The council of Monroe County, where Bloomington is located, and Indiana state legislators Vi Simpson, Matt Pierce, and Peggy Welch have written similar letters. "There is a high probability that privatization will generate near-term benefits [rather] than long-term value," the legislators wrote. "Outsourcing will have the effect of suppressing wage and benefit growth in our region."

IU professor Jim Capshew began a guest column in the October 31, 2006, issue of Bloomington's Herald Times by quoting Herman Wells, the late, revered president of IU: "The effectiveness of Indiana University depends upon its people, particularly those who make the university's work a career. Such persons render a public service of the highest order. It is appropriate, therefore, that special recognition be given to members of the staff." Wells understood, Capshew wrote, that money cannot buy loyalty; it can be encouraged only by "fair treatment and humane support" of staff, faculty, and students alike. The trustees may dismiss the cost of outsourcing to Bloomington or "the region" as mere "externalities"-items IU doesn't include in its budget. This would be unfortunate. What about the price in terms of workers' loyalty to IU?

Jobs in the Balance

Two hundred demonstrators, including many students and faculty members, protested outside an IU basketball game on January 27, 2007. They carried signs reading "Don't Outsource IU Jobs" and "What Would Herman Do?" (in reference to the late president Wells).

Senator Vi Simpson spoke to the demonstrators about her opposition to the outsourcing of IU jobs.

The following day, Steve Ferguson, president of the board of trustees, told the local newspaper about the different privatization studies IU is conducting:

Until these studies are completed, we cannot predict what effect they might have on our loyal and hard-working employees, whom we value highly. We intend to give them every consideration. In the end, some jobs will not be affected, some will emerge as better opportunities, some will change responsibilities, and, yes, some will be eliminated.

Privatizing Indiana

Academe, Sep/Oct 2007 by Brantlinger, Patrick

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