‘Privatizing’ Minibuses May Set a Dangerous Precedent

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.

Reagan’s most recent “privatization” effort was his decision last week to take the government out of the commercial satellite launching business. He wants to hand that work over to private firms, just as he has already done or is trying to do with a host of other federal government functions, ranging from control towers at small airports to the huge student loan collection business and the Bonneville Power Administration in Washington and Oregon.

The anti-government fringe groups on the far left and far right are politically impotent, and we have little to fear from them. The real danger, however, comes from those who now have tremendous political strength and are persuading the average voter that taxation is almost automatically evil, except when the revenue goes for military expenditures and a limited number of other purposes.

This could mean not just half pay for drivers of those attractive DASH minibuses. The long-range impact would erode a fundamental concept that government in our society is an indispensable instrument for allowing those of us who are relatively comfortable economically to help those who are less fortunate and also for providing useful but unprofitable services to the public.

It takes tax money for the government to, as the preamble to the U.S. Constitution prescribes, “establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity.” All these wonders don’t come cheap.

Hope for Workers’ Comp

Substantial increases in benefits for injured workers are still almost certain, but hopes that the California Legislature would approve them in this session were blown away in the past few days.

For nearly two months, major California employer associations and unions were engaged in private, intensive talks, trying to agree on legislative provisions to raise worker benefits without simultaneously increasing costs to employers who pay for the benefits.

They hoped to achieve this neat trick by streamlining procedures used to resolve disputes over workers’ compensation cases and by reducing the costs of doctors and lawyers representing injured workers and their employers. The negotiators came close to agreement, and there were indications that if the unions and employers could reach agreement, the Legislature would have passed the measure and Gov. George Deukmejian would have signed it.

But close isn’t good enough. Because of the pressure of time--the legislators were ready for their recess--the negotiators adjourned their talks, apparently without rancor.

The talks should be resumed soon, though, so the remaining differences can be resolved and the Legislature can approve urgently needed boosts in benefits, including the present maximum of $224 a week for those temporarily disabled.

There is an equally urgent need to boost the outdated minimum wage of $3.35 and jobless benefits that provide a maximum of only $166 a week. It could all be achieved by January, 1987, with some good will and more compassion among those who argue the issues and make the laws.