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The Honolulu Advertiser
Posted on: Wednesday, May 2, 2001

Privatization law must be imposed carefully

The stunning vote by the Legislature yesterday to approve sweeping changes to the way public jobs are treated will not, in itself, "reform" state and county government.

The long-range effort to convert Hawai'i's hide-bound and heavily unionized civil service into an efficient, 21st -century workforce will take more than the passage of a law or two.

Still, yesterday's vote signals a sea change in the relationship between unions and management in the public sector. But it does not end that relationship.

And that's the point that must not be missed as this new law takes effect. If the unions are not treated as full partners in implementing these reforms, they are likely to fail.

And that would result in a tragic loss of this sudden momentum for change.

What the Legislature effectively did yesterday was grant management almost unilateral power to "privatize" or out-source government work. Administrators are specifically allowed to lay off public workers whose jobs have been shifted to the private sector.

The same bill restores the right to strike to units that had given up that right in exchange for binding arbitration. But this hardly plays to union strength because a strike to protest the shift of jobs to the private sector would be fairly pointless.

The sweeping new power granted to public administrators by this legislation will mean nothing, however, if it is used capriciously or unfairly.

By capriciously, we mean that there is nothing automatically wonderful about privatizing jobs now performed by public workers. Yes, there can be efficiencies and savings. But study after study has shown that, in many cases, the taxpayers are best served by public workers working for public institutions.

By unfairly, we mean that that society does not necessarily or automatically win when jobs are shifted into the private sector. There would be social costs if decent wages and sound benefit packages were replaced by lower wages, fewer benefits and a lack of continuity in the workforce.

Yes, government work is not supposed to be a thinly disguised form of social welfare. But Hawai'i can be proud it has built a system that honors public work, pays it well and rewards it with sound benefits.

Union leadership has already begun to recognize that standards, practices and benefits that might have made sense a quarter-century ago no longer fit the needs of today's workforce or the ability of today's taxpayers to pay.

In the current round of labor negotiations, there were several examples where union leadership either explicitly or implicitly accepted some reform as the price of a new contract. There is no reason to think that dialogue cannot continue.

If Gov. Cayetano signs this privatization bill, as he should, management will be given a powerful new tool. But the tool must be used carefully, in full consultation with the unions and with awareness that both sides have a stake in this historic change.