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Lancaster city is in the midst of an epidemic. Rates of Lancastrians living below the poverty line have risen 50 percent in the last decade. Our poverty rates are higher than those of Philadelphia and Pittsburgh. Unfortunately, a recent decision by Lancaster County’s commissioners, to outsource cleaning services to a company that pays less and does not offer benefits, exemplifies and exacerbates the problem.
The cost-cutting move seems benign at first glance — budgets are tight so government officials find a cheaper way to get their offices cleaned. Businesses and families make similar decisions on where to spend money and how to save it; the government simply did the same thing.
Not so fast.
Before digging into the rationale for making this decision, let’s look at the jobs that are being outsourced. According to information provided by the county, the five full-time custodial positions — prior to being outsourced effective Dec. 28 — had salaries ranging from $18,429 to $39,821, with three of them paying less than $21,000 per year. Federal guidelines consider a family of four with household income of less than $24,250 to be living in poverty.
The county commissioners’ decision will save money in the short-term, but what are the long-term effects on the citizens and budget of Lancaster County? Most of the full-time and 19 part-time employees — if they are the sole breadwinners for their families — likely already qualified for some level of public assistance. This means, given their new reduced salaries and benefits, that the government will need to provide even more assistance. By making these short-sighted decisions, the county has not only outsourced the contract, it has outsourced the responsibility to care for its own employees to a company paying lower salaries and benefits. This effectively forces local nonprofits and the public safety net to ensure that the children of these workers have enough food on the table and can access medical care when they need it.
This also highlights the implicit disconnect, often seen in the political and business arena, in opposing government-subsidized health care and other public services, while simultaneously making decisions that force more people to use those services in order to survive.
To add even more fuel to this fire, the decision was made to outsource the cleaning work to a non-local firm, meaning any profits to the company, which would result in increased tax income and spending at local businesses, immediately leave the area.
In the same way that government officials should consider all costs to their community when making budgetary decisions, business owners must do the same. If business owners committed to paying wages which, at the very least, allowed employees to move off of public assistance, our community could be transformed. For example, a recent study found that wages at Wal-Mart are subsidized to the tune of $6.2 billion by public assistance, or about $1 million per Supercenter. Wal-Mart disputes the accuracy of these numbers, but the reality remains that companies are passing the responsibility of caring for their employees to the government, costing taxpayers billions of dollars.
Lancaster recently raised more than $6.1 million in the Extraordinary Give. This is an amazing show of generosity, but that is money spent to fill in the gaps where the private sector has failed. Free market capitalists argue that the only social responsibility of business is to increase profits so long as they stay “within the rules of the game” (avoiding fraud or deception). I would argue that this doesn’t take into consideration the full scope of the game — and the very real costs that each individual and corporate tax-paying entity bears as a member of society. Looking at the true costs of the game and considering how they can be reduced through business is just good business, and ultimately improves our collective and individual bottom lines.
Businesses, governments, and non-profits alike should have a moral responsibility to consider a more complex bottom line. At ASSETS, we work with entrepreneurs every day and fully understand that making a business profitable is hard work. Ensuring that a business stays in the black requires tough decisions and often some belt-tightening. However, in advising our clients, we continually encourage them to count all costs — to people, to the planet, and to profit — when making decisions. A thriving community produces thriving businesses. Leaders of all types must consider this reality and make decisions accordingly.
Jonathan Coleman is director of programs for ASSETS, a Lancaster-based nonprofit that works to create economic opportunity and cultivate entrepreneurial leadership in order to alleviate poverty and build vibrant, sustainable communities. Jessica King, ASSETS’ executive director, contributed to this column.