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'Privatizing' Minibuses May Set a Dangerous Precedent

August 20, 1986|HARRY BERNSTEIN

Those little silver DASH minibuses that scoot around downtown Los Angeles streets might not seem like part of a massive, risky and potentially dangerous conservative economic plan being put into practice by such ardent advocates as President Reagan. But they are.

The move last October to replace the publicly owned, 14-year-old downtown minibus service here with the privately owned DASH buses is a microcosmic, local-level example of the concept of "privatization" and "contracting out" that Reagan and other conservatives so enthusiastically endorse.

The broad concept of privatization means turning over entire functions of government to private firms. Contracting out means hiring private companiesto perform parts of government functions.

The idea of dismantling government is spreading rapidly to cities, counties and states, and it is growing, too, in other countries, particularly in Britain. Like most political concepts, this one isn't new. The more extreme anti-government advocates range from the anarchists, who have been floundering around for many decades on the political left, to the John Birch Society and the Libertarian Party on the right.

While those conservatives now in power in Washington and in many local and state governments don't go nearly so far as the extremists, they are heading in the same general direction.

The little example of the shift of minibus service from the public Southern California Rapid Transit District to the private, Pomona-based Diversified Paratransit Inc. was made mostly in hopes of saving taxpayers' money. The hope of reducing taxes along with the unproven theory that private industry workers are somehow more efficient than government workers are the prime economic motives behind the right-wing goal of "getting the government off the backs of the people," as Reagan puts it.

But it isn't such a good idea when you realize that the expected increase in efficiency is, at best, debatable, and that most of that tax "savings" come out of the paychecks of the workers.

That is clearly true in the DASH minibus experiment. Los Angeles government officials hope the move from government to private enterprise buses will reduce the taxpayers' costs for subsidizing the service to about $1.2 million a year from the $1.4 million a year that it cost when the RTD ran the system.

But to get that theoretical tax savings--and some profit for the DASH owner--the bus drivers' wages and fringe benefits have been cut almost exactly in half.

Under their United Transportation contract, RTD drivers average $13.31 an hour, plus $4.92 for fringe benefits. That isn't a poverty-level wage, but these hard-working drivers aren't getting rich.

In startling contrast, the non-union DASH drivers servicing the same bus routes that the RTD workers used to drive average $7.06 an hour, plus $2.20 an hour for fringe benefits.

That might seem like a dandy way to save taxpayers' money--unless you happen to be both a taxpayer and one of the workers on a job that pays half as much as it did last October.

And even for those of us who are not bus drivers, the tax "savings" expected from the use of DASH will probably not end up as a real advantage for two reasons, among others:

- Private industry can be and often is at least as inefficient as government and just as costly when profits are added to the price charged by the entrepreneur.

- We won't be able to sell as much of our own goods and services to a bus driver earning $7 an hour as we could to a driver earning $13 an hour. Reduced purchasing power can hurt the entire economy.

It should also be remembered that if we haven't taken enough money out of the drivers' pockets to give a profit to DASH's president and sole stockholder, Gene Stalians, he should rightly get out of the business and suggest that we turn the whole thing back to the government again if we taxpayers want minibuses in downtown Los Angeles.

Not all of the efforts to "privatize" or "contract out" government functions can be understood as readily as this small example. Such changes, coming all over the country at a rapid rate these days, have so many ramifications that it is hard for most of us to understand their full implications because of the complexities of the economics involved.

Also, it could take years before an entire nation feels and can accurately assess the full impact of moves by Reagan and others at the national and local level to dramatically reduce the role of government by dismantling many of its functions. And by then it may be difficult, if not impossible, to rebuild the kind of government we really need.

Reagan has said frequently that private enterprise can usually, if not always, operate more efficiently than government in most areas. He wants to get government out of any business that he believes that private, profit-motivated companies can enter and to reduce government aid to the programs and individuals so urgently in need of assistance.

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