Next time you visit City Hall, say hello to the cleaners, maintenance workers and security guards. They help keep our 700-room municipal labyrinth running smoothly for the suits who make the big decisions — even though many of them don’t technically work for the city.
Since the 1990s, managing building service workers has been outsourced to a private company, to the tune of $14 million a year.
Big-dollar contracts in Philadelphia have long been political chess pieces — and as the Inquirer reported Thursday, this one is no exception. Former Mayor John Street is mad at Mayor Jim Kenney for switching the contract holder. The Kenney camp said it disqualified PRWT Services Inc., a firm with deep ties to Street that’s been managing municipal maintenance since 2003, because it made undisclosed political contributions. Street said Kenney is just “making excuses.”
Chicago-based management firm Jones Lang LaSalle will take over for PRWT in June. The shift away from a “minority”-owned firm has caused some outcry from critics who have been questioning Kenney’s commitment to diversity.
But will the change affect the workers themselves? And is a private contractor the best way for the city to handle its building maintenance crew?
Rich Lazer, Kenney’s deputy mayor of labor, said workers shouldn’t be disrupted by the management change.
Privatization of their roles started during Philly’s major financial crisis in the 1990s, when then-Mayor Ed Rendell’s administration enacted sweeping austerity measures and even went to war with big unions in an effort to correct the city’s balance sheet.
One of those quiet measures was the privatization of many essential services, which has become a touchstone of fiscally responsible government (as well as a lucrative revenue stream for corporations, lobbyists and political insiders who exert influence to steer contacts to favorites groups).
The subtext of all outsourcing — whether to local firm in Philly, one in Chicago or one overseas in India — is that someone is making less for their labor, said Donald Cohen, executive director of In the Public Interest, a California-based national research center.
There’s only a couple ways private firms can do the job cheaper than the government itself, Cohen said: use fewer workers, pay them less, or cut wages and benefits.
“There’s nothing else,” Cohen said. “There’s no other magic. That’s the only place you can save money.”
Contracted security and maintenance workers in large buildings (over 100,000 square feet) are represented by 32BJ. Gabe Morgan, the union’s Pennsylvania director, said Philadelphia is unique in how many third-party vendors have been able to unionize successfully. From security guards to airport workers, the city’s contracted blue-collar workers have achieved some major victories through unionization in recent years.
Because of these agreements, a contracted cleaner in City Hall is making $19/hour with health insurance and benefits, and contracted security officers make $16.50 with retirement plans and health insurance. Those wages are far above the city’s current minimum wages.
Morgan said many benefits for 32BJ contracted blue-collar workers are comparable to those in the public sector, although “there’s no pension like a city pension.”
In short, it still makes more fiscal sense to outsource.
“The Administration believes it is likely still prudent to continue under the current arrangement in which management of the buildings is handled by a qualified firm working under a professional services contract, however we do plan to do an analysis to assess if that’s the case,” city spokesperson Mike Dunn wrote in an email.
Morgan said both Kenney and Street have been supportive in fighting for conditions of contracted workers.
“To be candid, it’s a political story. Both this administration and the Street administration have been very proactive about turning poverty jobs into good jobs,” he said. “The in-between administration, not so much.”
As for the political spat, Kenney has taken hits from his rivals on the campaign trail over his commitment to diversity — and the movement away from PRWT’s minority-run firm plays into that. But the administration maintains it is merely enforcing the rules about breaking rules that prevent vendors from making political contributions without disclosing them.
Cohen, the contracting expert, said that’s a good thing on its face.
“It doesn’t often happen when a contractor will break the law or violate a contract,” Cohen said. “It’s a big deal to apply sanctions.”