The City of New Haven is considering outsourcing its public school custodial services to a private firm, GCA Services Group, to reduce the City’s projected $42 million deficit for fiscal year (FY) 2011-12. Out-sourcing to this firm would cut the cost of the school custodial services in half, saving the City $8.1 million, equal to 19 percent of the deficit. This report assesses the major cuts in wage and benefits that this pro-posal will impose on New Haven’s currently employed custodians, including their impact on the families of the custodial workers. The main findings are:
- The GCA Services Group proposed contract to provide public school custodial services would:
Reduce the current average wage among the New Haven Public School (NHPS) custodi-ans by 40%, from $20.90 to $12.50 per hour; Replace 186 full-time custodial positions with a largely part-time workforce; at minimum, 2/3 of the new positions will be part-time; Eliminate health insurance benefits, overtime pay and bonuses for all part-time workers; eliminate retirement benefits for all workers.
- These severe pay and benefit reductions would effectively force the 186 lower-to-middle-income NHPS custodians and their families to bear the burden for fully 19 percent―$8.1 million―of the city’s projected $42 million budget deficit for FY2011-12. Yet, these 186 families represent less than one-half of one-percent of the 46,000 households in New Haven.
- The main benefit to privatizing city services put forth by proponents of outsourcing is the idea that private firms cut costs by operating more efficiently. Whether or not this is the case, this factor does not play an important role in the GCA Services Group proposed contract. Instead, the proposed contract reduces costs by simply paying workers less: all of the cost savings from the GCA Services Group contract bid result from pay and benefits cuts. Moreover, any savings from reduced service hours will likely result in lower quality services, i.e., dirtier classrooms and school cafeterias.
- If the average NHPS custodian today continues to work as a school custodian under the proposed GCA Services Group contract, s/he and his/her family will no longer be able to make ends meet.
The average NHPS custodian would experience a 54 percent fall in total household in-come, from $68,000 to $31,000. At $31,000 the average-sized 3-person household would be eligible for the major publicly subsidized programs such as SNAP (formerly called Food Stamps) and HUSKY (Con-necticut’s Medicaid program). A second part-time job would only likely raise this household income to $42,000; this is $8,500 short of the $50,543 this household needs to meet its basic needs.