A Hidden Toll as States Shift to Contract Workers - Business

Michigan - Like many states and local governments strive to reduce costs, Michigan hopes to replace some government employees with contract workers who will do the same work for less.

Ginny Townsend, 41, took a job in January as a nurse at home managed by the state for veterans here. Technically, she works for a private company that provides certain employees of the veterans home under a contract of state. It is $ 10 per hour, about half the wages of public employees working in the establishment.

"I love my job, and I appreciate the opportunity to be here," Ms. Townsend, a former nursing home assistant, said one recent afternoon as she gleefully delivered fruit and a newspaper to a resident of 85 years in a sunny solarium.

With the national unemployment rate to about 9 percent, Ms. Townsend said she feels lucky to have a job. But its low wages, it is hardly to exist. She said she was raising four grandchildren under the age of 11 with his sister unemployed and could not help without the $ 300 in food stamps she receives each month.

Now the state wants to lay off 170 nurses in the pay of the public at home for veterans and replacing them with contract workers more like Ms. Townsend, causing a lot of legal controversy and personal anguish.

The legal battle highlights the potential pitfalls of such decisions. Outsourcing, usually intended to ease strained public budgets, tend to directly affect most people like Ms. Townsend and his co-workers. But there may be other disadvantages. The quality of services provided by contract workers, for example, may not be as consistent as that of government employees experienced. And taxpayers may end up paying for cuts more indirectly.

What governments, except salaries and benefits often "ends the government's books through a variety of programs," said Paul C. Light, a professor at the School of Public Service at New York University Wagner, referring to unemployment insurance, Medicaid and other public assistance for workers who earn low incomes.

Outsourcing is becoming more popular in tough economic times that states and municipalities to transfer the operation of facilities such as prisons, school cafeterias and sanitation departments to private contractors. Governors or assembled in Arizona, Louisiana, New Jersey and Pennsylvania have all offered critics of government agencies in seeking opportunities to privatize operations.

Many local governments, such as Anaheim, California, Luzerne County, Pennsylvania, have outsourced services, including park maintenance, graffiti removal and tax claims. Mayor Rahm Emanuel collection recycling of Chicago recently outsourced parts of the city.

In Michigan, the plan to replace nurses home state veterans resulted in a lawsuit claiming that some temporary workers employed by the company contract had already compromised patient care. In one case, the suit said, a resident fell from her bed and broke his neck after being left unattended by a worker under contract. A judge granted a preliminary injunction that keeps state employees to work while the trial proceeds.

The injunction also prevents new workers HealthForceOntario J2S Group, which recently won the contract to replace state employees to take jobs at the plant. The Company has provided nurses to meet the veterans home since 2001.

The State appealed the decision, saying in court documents that the incidents cited were isolated and that workers had been involved in state care and negligence. He said contract workers can provide quality care to veterans and save about 5.8 million per year.

With state budgets under pressure, Mich., says he can afford relatively high wages of public sector workers, ranging from $ 15 to $ 20 per hour, with health and retirement benefits. According to Salary.com, certified nursing assistants in private institutions of long-term care in the region to earn a median salary of just over $ 25 000 per year, or about $ 12.25 an hour.

The house, opened 125 years ago to provide care to war veterans of the state and their spouses, now serves about 600 residents. About 40 percent of its funding comes from the U.S. Department of Veterans Affairs, the rest from public funds and fees paid by residents.

Many nurse assistants have worked here for decades, and the union representing them said their experience and relationships with their patients can not be easily replaced.