The Failures of Privatization
A Look at Privatization, including Keolis and the MBTA Commuter Rail, and an upcoming proposal to privatize Duxbury Public School Custodial Staff
On October 12th, 1984, a few hours after the Provisional Irish Republican Army had detonated a bomb at The Grand Hotel at the Conservative Party Conference in Brighton, England, killing five and wounding 31, British Prime Minister Margaret Thatcher — who narrowly missed injury because she was up late, working on her speech — addressed her party. One of the themes she touched on was privatization, or what Mrs. Thatcher called denationalization.
Privatization, said Mrs. Thatcher, “has brought greater motivation to managers and workforce, higher profits and rising investment, and what is more, many in industry now have a share in the firm for which they work.”1
In the nearly four decades since that speech, privatization of public things (res publicae), broadly construed, has swept the world. Mrs. Thatcher was the intellectual architect of these epochal changes in our political economy, which were undertaken despite and contrary to the ancient truth, which finds support in history, law, and precedent, that there are some things — our common lands and waters and air, our public ways, the public safety and health, and our public schools, among others — which are by their very nature and on the face of the facts public things (prima facie res publicae).
It’s worth looking at how Mrs. Thatcher’s lofty blandishments have played out in reality. Has privatization “brought greater motivation to managers and [the] workforce”? Profits certainly have risen, as Mrs. Thatcher predicted, especially for a class of middlemen who are able to extract economic rents from public goods and services; but this has demonstrably not resulted in increased investment, as the state of infrastructure in the U.S., Britain, and beyond illustrates. Nor are most workers in a position today to take ownership in the companies for which they work; rather, over the last four decades, we have seen wealth concentrated in the hands of the top 1%, not in the hands of ordinary people.
This article will take a look at two local examples of privatization, one existing, and one proposed — the presently-privatized MBTA Commuter rail, run by the French transit company Keolis; and the proposal to privatize the custodial staff at Duxbury Public Schools, which will be considered by the Duxbury School Committee tomorrow, Thursday, April 11th, at 11 a.m. in The Merry Room at the Duxbury Free Library.
Let’s examine each case in turn.
(Duxbury High School; credit — Wikimedia Commons user Conman1190; CC-by-SA 4.0.)
Transport Workers Union: “Keolis and the MBTA are grossly underpaying and mistreating railroad workers.”
Keolis is a French transit company, which describes itself on its website as “a global leader in the shared mobility market and a committed partner to public transport authorities around the world.”2 It was awarded the contract for running the MBTA’s commuter rail system in 2014.3 According to its website, the company has approximately 68,100 employees across 13 countries, and in 2020 had revenues of 7 billion euros (approximately $7.98 billion in US dollars at 2020 exchange rates). Keolis runs 29 tram networks, 5 regional rail networks with over 2,500 kilometers of track, 40,000 rental bicycles in France, and more than 450 kilometers of metro track.4
The Keolis Group is a holding company consisting of Groupe Keolis S.A.S. “and all the companies in the Keolis, Keomotion and EFFIA branches.” Groupe Keolis S.A.S. “is a simplified joint stock company. Its management is entrusted to an Executive Board, composed of a single member, Marie-Ange Debon.”5
Ms. Debon took the helm at Keolis in August, 2020. She is a 1989 graduate of the Ecole Nationale d'Administration (ENA), an elite institution of higher learning in France that educates the country’s future government and business leaders.6
According to Keolis’s website, 70% of the company’s shares are held by the Societe Nationale de Chemins de fer Francais (SNCF), the French national railway company; the remaining 30% are held by Caisse de Dépôt et Placement du Québec (CDPQ), a Canadian institutional investor with approximately $434 billion Canadian dollars in assets, and offices located across nine countries.7 According to the Transportation Workers Union of America, SNCF had approximately $45.5 billion in revenue in 2023 — about the same as Coca-Cola.8
In a March 20th, 2024, press release, Keolis stated that “in the past four months, Keolis North America’s transit business has doubled in size with the addition of new contracts in Austin, Texas and Phoenix, Arizona. This growth is largely due to strong client relationships, exceptional operational performance, and significant focus on the employee experience.”9
Yet “the employee experience” at Keolis does not appear to be a pleasant one.
An April 9th, 2024, press release from the Transportation Workers Union of America (TWU), which represents Keolis workers, states that “Keolis and the MBTA are grossly underpaying and mistreating railroad workers.”
According to Pete Donahue, TWU’s Senior Director of Communications, workers at Keolis MBTA commuter rail operations have been, as of April 10th, 282 days without a contract, and have gone for nearly two years without a raise.
(A Keolis worker at the Braintree MBTA station. Credit — Ben Cronin.)
In addition, according to the TWU, Keolis car cleaners are paid such low wages that they are eligible for both food stamps and Section 8 housing assistance from the Commonwealth, while rail workers at Keolis, including the inspectors of train cars, are the lowest-paid in the entire Northeast. Moreover, Keolis’s rail workers do not receive any paid sick time — not only troubling in and of itself, but particularly so just a few years after a global pandemic underscored the importance for public health of staying home if one feels sick.
“It’s outrageous that Keolis pays Coach Cleaners and Car Inspectors the lowest commuter railroad wages in the entire Northeast, and that some cleaners are so poorly paid they are eligible for food stamps,” Ed Flaherty, President of TWU Local 2054, said. “If Keolis doesn’t agree to a fair contract with fair wages, we will definitely strike when we can legally walk off the job.”
The TWU also noted that — deeply ironically — profits which the privatized rail operator makes from operating the MBTA commuter rail here in New England are sent back to France, both providing high pay for Keolis executives as well as providing funds for investment in the French public transit system, and which necessarily come at the expense of New England’s public transit system.
“France would never allow a greedy American company to exploit French railway workers like this,” TWU International President John Samuelsen said. “Massachusetts should end its contract with Keolis as soon as possible and send these carpetbaggers back to France.”
In February, amid the continuing contract negotiations, Mr. Flaherty warned the MBTA Board that TWU Local 2054 workers were prepared to strike.
“We don’t want to strike, but we will when we are legally able to,” said Mr. Flaherty on February 29th.
“These jobs used to be a path to the middle class, not a path to the welfare line,” he continued. “To me, this is proof that privatization doesn’t work. Public transportation was not created to create profits for corporate America — or corporate France.”
As of press time, Keolis had yet to respond to requests for comment, and for answers to emailed questions.
Moreover, what is notable to me is that this privatization has, at least in my experience, not noticeably increased the efficiency of the MBTA commuter rail system. Indeed, the evidence of recent months suggests that the commuter rail, alongside the rest of the MBTA, is not in fact operating efficiently and well (indeed, my experience of being trapped on a train for three-and-a-half hours on a Sunday morning in a swamp outside South Weymouth, missing two of the classes I had intended to teach that day, certainly disabuses me of any desire to see further privatization). At least insofar as Keolis and the MBTA commuter rail system goes, in my view, the promises of privatization have not come to pass. It has, rather, been a stark failure that immiserates working people while providing high salaries for corporate executives on both sides of the Atlantic.
It is, above all, the public nature of the railways that is at issue here. This was very ably explained by President Theodore Roosevelt in his 1907 speech in Provincetown at the dedication of the Pilgrim Monument:
“I believe, furthermore, that the need for action is most pressing as regards those corporations which, because they are common carriers, exercise a quasi-public function; and which can be completely controlled, in all respects by the Federal Government, by the exercise of the power conferred under the interstate-commerce clause, and, if necessary, under the post-road clause, of the Constitution. During the last few years we have taken marked strides in advance along the road of proper regulation of these railroad corporations; but we must not stop in the work.”10
Teddy Roosevelt was right in 1907, and he is right today: the railroads are by their very nature public things, and if we are to have a republic, and not a corporate oligarchy, that is what they must become once again.
Duxbury School Committee To Consider Privatizing Public School Custodial Staff
It is not only our railways which are threatened by privatization; so, too, are our local public schools. Tomorrow, April 11th, the Duxbury School Committee will consider whether to privatize the custodial staff at the Duxbury Public Schools. The measure has proven controversial, with proponents pointing to purported greater efficiency and savings, while opponents argue that the DPS custodial staff is an integral part of the fabric of the Town, and that it is both imprudent at a practical level, and insupportable at an ethical level, to outsource these jobs.
Duxbury School Committee Chair Laurel Deacon explained some of the Committee’s reasoning to me in an April 1st email.
“We value the members of our custodial department. We are cognizant of the positive and meaningful relationships our custodians have formed with our students and staff and we believe that every adult in our schools plays an important role in the full educational experience of our students,” wrote Chair Deacon.
“In a review of our current service model over the course of the past year, our administrative team concluded that our district is facing considerable challenges with this model. We have been unable to hire to fill vacancies, we continue to face challenges in staffing our buildings at appropriate levels for cleaning during school vacations and weekends and finally, at this time, our current model fails to support the thorough daily cleaning of 578,000 square feet of building space in our district. In short, the current model is not meeting the operational needs of our district,” she wrote.
“Following this review, we determined it was in the best interests of our district to explore alternative service models in order to make a more informed decision on the matter. However, I want to assure you that at this time, no decision has been made regarding the privatization of our custodial services and consideration of whether or not to outsource these services is something we are taking very seriously,” wrote Chair Deacon. [Emphasis in original.]
Via email, Duxbury Superintendent Dr. Danielle Klingaman declined to comment to The Plymouth County Observer on the issue prior to the Thursday, April 11th meeting of the School Committee.
To get the custodians’ perspective on the proposed changes, I spoke with Diane Babbin-Discullio, a longtime Duxbury Public Schools custodian, and the AFSCME 93 shop steward for DPS custodians.
She said that, first and foremost, the problems with providing sufficient coverage for school facilities could be achieved if management would raise wages for Duxbury Public School custodial staff, noting that pay rates were 18% lower in Duxbury than in comparable neighboring towns. She also noted that management decisions played a role in the lack of coverage, such as choosing on weekends to have one custodian (unless there is food being served) cover custodial duties at the High School, the Alden School, the Middle School, and the Steele Field House — which is often simply too much work for one individual to do.
Security is one of the benefits of in-house custodial staff, said Ms. Babbin-Discullio, noting that in the present security environment, having familiar faces watching over our schools is a real benefit of the present system.
“We’re the ones watching out for the children,” she said.
Ms. Babbin-Discullio noted that the process has been extremely stressful for custodial staff and their families, saying that there is “unbelievable concern” over the privatization proposal. The new, privatized jobs would likely have lower wages and minimal benefits, she said, and added that in approximately the last month, two custodians have already left Duxbury to work elsewhere, impelled, in part, by uncertainty around the future, and by the necessity of maintaining health insurance coverage.
She noted further that like many workers in education and beyond, a number of Duxbury custodians live paycheck-to-paycheck; there are deep and real concerns that current custodians could lose their homes if privatization goes through.
She said that Duxbury custodians have long been aware that they are underpaid compared to their peers, but that the family atmosphere of the Duxbury Public Schools and the tight-knit nature of the community made it an attractive and enjoyable place to work. All of that, she said, would be threatened by privatization.
James Durkin, Director of Legislation and Political Action for American Federation of State, County, and Municipal Employees (AFSCME) Council 93, the union which represents the custodians, said that privatization tended to produce worse, rather than better, public services.
“Quality invariably suffers” after privatization, he told The Plymouth County Observer. “No one goes the extra mile.”
Mr. Durkin pointed to the cautionary example of Chelmsford, which privatized its public school custodial staff, and saw a raft of new problems as a result.
According to AFSCME, “privatization replaces decent, middle-class school district jobs with substandard, poverty-level jobs. When Chelmsford, Massachusetts, schools outsourced custodial jobs, wages were slashed from $19 per hour to about $8.50 per hour. Employees couldn’t afford to take the new jobs at poverty-level wages, meaning the community lost many experienced, familiar workers in their schools.”11
Services in Chelmsford, to be charitable, suffered.
Here’s an October 20th, 2015 article from The Lowell Sun:
“Police say the latest incident involved a worker who stole money from the cafeteria cash register…. Since the School Department privatized custodians in 2011, three other Aramark employees have been charged with stealing school, staff and students’ property, including computers, credit cards, and prescription medication,” according to The Lowell Sun.12
Moreover, in practice, privatization simply acts as a way for private economic actors to extract economic rents from the public purse, Mr. Durkin told The Plymouth County Observer. Mr. Durkin pointed me to the budget for the Department of Developmental Services, where a quick examination of the department’s budget for Fiscal Year 2024 reveals that approximately $1.7 billion were appropriated to private vendors who ran group homes for individuals with disabilities, where for state-run group homes, the figure was approximately $317.7 million.13
This, he suggested, needlessly duplicates overhead costs, ultimately hurting the taxpayer, while allowing private actors to extract economic rents. In addition, he noted that abuse and neglect and related issues are typically far more prevalent at these privately-run, outsourced institutions.
Ultimately, said Mr. Durkin, privatization typically elevates short-term, quarterly thinking over prudential long-term planning.
Privatization, he said is “invariably about slashing” health insurance and pension costs.
Nobel Prize-winning economist Joseph Stiglitz, in a 2021 discussion of proposed privatization of infrastructure, affirms this view.
"Policies such as those being proposed, in which the private sector is given, if even temporarily, significant control over these public assets—making key decisions, including imposing charges from which they derive their profits—undermine government’s ability to accomplish these goals and give outsized power to private sector companies with conflicts of interest and misaligned incentives. And they do so without any evidence that the private sector is more efficient in these contracted areas. As a result, these provisions have historically, around the world, not had the promised beneficial effects, either on economic productivity or on the government’s budget, and instead often have adverse societal effects,” wrote Prof. Stiglitz, including “enhancing extractive corporate power; weakening public power and democracy; widening racial and economic disparities; and dampening worker power.”14
Community Rallies Around Custodians; Opposition to Privatization
Community members have by and large rallied around the custodians, especially on local social media sites, such as the Duxbury Helping Duxbury Facebook page.
One prominent opponent of privatization has been Duxbury resident Shay Studley Toland. She explained her opposition to The Plymouth County Observer.
“While I am incredibly sensitive to the administration’s need to maximize resources, I don’t think outsourcing custodial staff is worth the cost savings. Custodians become an important touchstone within the public school system, not only keeping property orderly and sanitary, but being another trusted adult for our students,” she told The Plymouth County Observer.
“I’ve seen firsthand how custodians go out of their way to help students, staff and parents. With a contract arrangement, I fear that it would be a revolving door of faces and a lesser level of commitment. Duxbury Public School administrators should recognize the risk of this change and maintain custodian’s employment status,” she said.
Martha Morkan Dennison, who is presently the Vice Chair of the Duxbury Board of Library Trustees and who served in the leadership of the Duxbury PTA/PTO, also explained her opposition to privatization.
“I’ve just completed a 13-year run of PTA/PTO leadership at the Duxbury Schools and I assure you I wouldn’t have lasted if it weren’t for our team of custodians,” she said, describing the DPS custodians as “just a stellar group of people who always stepped up to go above and beyond for whatever we needed for the kids. That’s the culture of the department. It breaks my heart that the School Dept doesn’t recognize and appreciate that kind of commitment, concern, and loyalty,” she said.
“I’m very hopeful that the School Committee will do the right thing on Thursday and keep the custodial department in-house not just because it’s the right thing to do but also because there are no sustainable benefits to privatizing this team,” she told The Plymouth County Observer.
I should note that I am likewise deeply opposed to privatization of the Duxbury custodial services. My Uncle spent much of his career as a school custodian and facilities and maintenance operator (not in Duxbury, but at a private school in Boston), and I can attest from my own K-12 experience at the Duxbury Public Schools just how important the custodial staff were to our success as students, retrieving inadvertently-locked-away musical instruments early on Saturday mornings in time to make a distant audition, or, as Ms. Discullio-Babbin told me, searching through rubbish for lost retainers, and generally helping students to succeed in school.
The fact is that custodians are an integral part of the fabric of the community. They are the sine qua non (“without which, nothing”) of the Duxbury Public Schools — as Ms. Babbin-Discullio put it, the keepers of the house, and, and as both she and Mr. Durkin noted, they are the first line of security for the schoolchildren of our town in this dangerous age. They are well-placed to identify just who exactly should be at our schools — and who shouldn’t.
I also worry about precedent. Duxbury, very regrettably, privatized its food service workers a decade-and-a-half ago. If custodial workers are privatized, by what logic are faculty protected from privatization? Would not the logic of privatization apply as well to administrative workers in the Duxbury Public Schools?
Precedent also goes in the other direction – there is ample support in the historical record for opposition to privatization. I think one of the most powerful and relevant is the first public education statute, to my knowledge, in the Atlantic world, the very-Puritanly-named Massachusetts Old Deluder Law of 1647, which begins:
“It being one chief project of that old deluder, Satan, to keep men from the knowledge of the Scriptures, as in former times keeping them in an unknown tongue, so in these later times by perswading from the use of tongues, that so at least the true sense and meaning of the Originall might be clowded by false glosses of Saint-seeming deceivers; and that Learning may not be buried in the graves of our fore-fathers in Church and Commonwealth, the Lord assisting our indeavors: it is therefore ordered by this Court and Authoritie therof; That every Township in this Jurisdiction, after the Lord hath increased them to the number of fifty Housholders, shall then forthwith appoint one within their town to teach all such children as shall resort to him to write and read, whose wages shall be paid either by the Parents or Masters of such children, or by the Inhabitants in general…”15
For larger towns, grammar schools – the equivalent of high schools today, teaching Latin and Greek, and incubating that desideratum of the Puritan mind, a learned ministry — were also to be established:
“And it is further ordered, that where any town shall increase to the number of one hundred Families or Housholders, they shall set up a Grammar-School, the Masters thereof being able to instruct youth so far as they may be fitted for the Universitie.”16
I quote the statute at length because it shows that from the 17th century through the present, there have been some things which are irreducibly public. Our common lands and waters, our public ways, the public safety and the public health, and our common schools – all of these things are, by their very nature, public things (res publicae). It is no accident that the word “republic” derives from “res publicae,” and I would argue that privatization of our schools is contrary to the entire ethos of small “r” republican government, in which private profit and interest are kept in a strictly separate sphere from the common good and the general welfare.
For me, this is a question of what kind of Town and what kind of community we want to be — do we want to be a place where life is a series of impersonal economic exchanges, devoid of meaning, or a spirit of human kindness? Or do we want to be, as the Mayflower Compact directs us to be, “a civil body politic,” directed to the common good and the equal flourishing of all of its members?
I believe that we are in fact a civil body politic, and that we should act accordingly; that is why I am very hopeful that the Duxbury School Committee will reject any privatization whatsoever of the Duxbury Public School custodial staff at tomorrow’s meeting.
Margaret Thatcher, Speech to Conservative Party Conference, Oct. 12th, 1984. https://www.margaretthatcher.org/document/105763.
https://www.keolis.com/en/keolis-an-expert-in-shared-mobility-for-all/.
https://www.bostonglobe.com/metro/2015/02/25/mbta-and-keolis-shake-leadership-name-new-general-managers/CiX3SuzwNnLfhZmdCSUZAM/story.html.
Ibid.
https://www.keolis.com/en/our-governance.
https://www.keolis.com/en/governance-members/marie-ange-debon/. ENA plays a similar role in the national life of France as the Ivy League in the United States, or Cambridge and Oxford University (“Oxbridge”) do in the United Kingdom. “Enarques,” as its graduates are called, dominate French national life, as well as that of many former French colonies. See this list of Enarques, here via Wikipedia, including Presidents Valery Giscard d’Estaing and Jacques Chirac, the present CEOs of BNP Paribas (a leading French bank) and the automaker Renault, and many more.
https://www.cdpq.com/en/about-us.
TWU flyer, received April 9th, 2024.
https://news.keolisna.com/announcing-new-coo-brad-thomas.
Theodore Roosevelt, Provincetown Speech, Aug. 20th, 1907, 26-29.
https://afscmestaff.org/wp-content/uploads/2020/03/Privatizing-School-Support-Services-The-Wrong-Choice-6-Schools-Factsheet.pdf.
https://www.lowellsun.com/2015/10/20/house-cleaning-in-chelmsford/.
https://budget.digital.mass.gov/govbudget/fy24/appropriations/health-and-human-services/developmental-services/?tab=budget-summary.
Joseph Stiglitz, “The Harms of Infrastructure Privatization: A Step Backward in Progressive Policymaking,” The Roosvelt Institute, July 26th, 2021, https://rooseveltinstitute.org/2021/07/26/the-harms-of-infrastructure-privatization-a-step-backward-in-progressive-policymaking/.
https://www.mass.gov/files/documents/2016/08/ob/deludersatan.pdf.
Ibid.
The privatization benefit to the general public is a myth. But if that route is taken, just think how much could be saved by privatizing the police and fire departments, and the DPW. I view the overall community as a quilt — all parts stitched together to make a whole. The people whose jobs are on the line are a part of this community. They are not disposable.
One gets, in the end, what one pays for. Privatization in both these cases benefits the few, owners who extract wealth, over our schools and transit, which we own in common. Fine article.