9.27.2010

for-profit libraries creeping into u.s.

The march of privatization goes on. In a country with money for war and nothing else - where most corporations get taxpayer subsidies but pay zero taxes themselves - corporate interests profit from empty public coffers. And in some cases, they profit from public ignorance.
A private company in Maryland has taken over public libraries in ailing cities in California, Oregon, Tennessee and Texas, growing into the country’s fifth-largest library system.

Now the company, Library Systems & Services, has been hired for the first time to run a system in a relatively healthy city, setting off an intense and often acrimonious debate about the role of outsourcing in a ravaged economy.

A $4 million deal to run the three libraries here is a chance for the company to demonstrate that a dose of private management can be good for communities, whatever their financial situation. But in an era when outsourcing is most often an act of budget desperation — with janitors, police forces and even entire city halls farmed out in one town or another — the contract in Santa Clarita has touched a deep nerve and begun a round of second-guessing.

Can a municipal service like a library hold so central a place that it should be entrusted to a profit-driven contractor only as a last resort — and maybe not even then?

“There’s this American flag, apple pie thing about libraries,” said Frank A. Pezzanite, the outsourcing company’s chief executive. He has pledged to save $1 million a year in Santa Clarita, mainly by cutting overhead and replacing unionized employees. “Somehow they have been put in the category of a sacred organization.”

. . . .

L.S.S.I. got its start 30 years ago developing software for government use, then expanded into running libraries for federal agencies. In the mid-1990s, it moved into the municipal library market, and now, when ranked by number of branches, it places immediately after Los Angeles County, New York City, Chicago and the City of Los Angeles.

The company is majority owned by Islington Capital Partners, a private equity firm in Boston, and has about $35 million in annual revenue and 800 employees. Officials would not discuss the company’s profitability.

Some L.S.S.I. customers have ended their contracts, while in other places, opposition has faded with time. In Redding, Calif., Jim Ceragioli, a board member of the Friends of Shasta County Library, said he initially counted himself among the skeptics.

But he has since changed his mind. “I can’t think of anything that’s been lost,” Mr. Ceragioli said.

The library in Redding has expanded its services and hours. And the volunteers are still showing up — even if their assistance is now aiding a private company. “We volunteer more than ever now,” Mr. Ceragioli said.
Key phrase here: "...while in other places, opposition has faded with time." That's how it works.

This guy volunteers for a private, for-profit company and he can't think of anything that's been lost? Maybe his pride and common sense are under the bed with the lost socks. When library hours and services are cut because they're not sufficiently profitable, he won't find them there, either.

That "overhead" they cut is another word for your services. Why would you rather put money into shareholders' pockets than into good jobs in your own community? The for-profit library isn't going to cost any less, and you won't see a penny of the profit it turns.

There are many services that - done properly - can never and should never create profit. Health care and education are tied for first on that list. Public access to information is another.

17 comments:

johngoldfine said...

Many other things to the side for one moment, I worry about the degradation of librarian ethics--I don't see as many for-profit librarians standing up against the Patriot Act, the use of online filters, the denial of library use to the homeless, the de-accessioning of controversial material, the revealing of patrons' borrowing habits, and so on.

L-girl said...

Those are very good points, John.

Are the librarians in these institutions accredited, do they belong to the ALA? If they do, they should stand on the same side of those issues.

If they're only taught how to shelve books and answer random research questions, the chances decrease.

johngoldfine said...

Unless they are unionized or job-protected by civil service, librarians may have to choose between their principles or their jobs in a for-profit setting, and that is not the way it should be.

L-girl said...

Right you are. I could not agree more. It's a terrible development.

impudent strumpet said...

Wait, how does that even work? If they're for-profit, there must be revenue. How do they generate revenue from a library?

L-girl said...

They get the city contract to run the library. If the city spends x dollars on libraries, they now pay x minus something to this company, and the company runs the library on that, and whatever is leftover is profit.

That's how all privatized city contracts work.

MSEH said...

Thanks for this. I hadn't heard and P, as a librarian, found this very interesting!

Lorraine said...

More likely x plus something. P<strike>ira</strike>rivatization rarely results in real efficiency. Union busting is always the real motive for privatization, but executives and investors of contracting firms are inevitably a bigger overhead than civil service provisions. In the case of libraries, the politics of intellectual property probably also comes into play. I imagine Big Content would like a book in a library to be akin to a record in a jukebox--something whose consumption is 'metered.' Periodical subscription rates are often higher when the subscriber happens to be a library. Same principle at work.

I wonder what will happen to the role of the libraries at the front lines of the digital divide...prior to May of this year virtually all my online activities (incl. 2 blogs and a wiki) were possible thanks to this venerable institution. I'd like to think I've been contributing something of at least marginal value to the noosphere...

impudent strumpet said...

Wait, so all this time that people have been talking about privatizing stuff, they've really meant just giving public money to private companies and incentivizing them to deliver the absolute minimum they can get away with by telling them they can keep anything left over???

Holy shit! At the very very very very very least, they need to not call this "privatization", because that is hella misleading!

L-girl said...

The privatizers would probably use words like "efficiency" and "lower overhead," but yes, that's what happens when public services are privatized. Taxpayers' money goes to a private company that then hires workers, usually non-union, always lower paid and with less (or no) job security, cuts services and pockets the profit.

I'm really glad you asked this. Before this discussion, what would you have thought privatization entailed?

It's a great example of how we use langauge with an assumed shared understanding... but are often not communicating well at all.

L-girl said...

The myth goes that anything publicly run is inefficient and overpriced, and anything that is privately run is more efficient and cheaper. It's a complete myth - as Tommy Douglas showed with health care, once you add in profit, the service has to cost more.

Of course the place that so much money is typically "saved" is in salaries and benefits. So the community living standards drop, but do the taxpayers realize the difference? No. Only shareholders do.

L-girl said...

"Realize" in the sense of financial gain, not in the sense of understanding.

impudent strumpet said...

I thought it meant they just made a rule that says "Okay, private companies are allowed to do this now," and then some private companies went and did it because it's a business opportunity. Under that misconception, I could imagine why private companies might run a medical clinic or a bus route, but I couldn't imagine why they would run a library.

L-girl said...

In some circumstances, it probably does mean that. Health care delivery would be part of that. But when a formerly public service gets privatized, the private company is paid with taxpayer dollars.

Right now in the US, huge chunks of military services work this way. Most of the industries and services around the occupation of Iraq are private and for-profit, but paid for by the US taxpayer. And doled out by no-bid contracts, of course.

To Dick Cheney's friends.

Still.

impudent strumpet said...

How did private military contractors come to exist in the first place? How would it ever occur to someone to make a business that does military stuff? "I know, I'll get a bunch of people, a bunch of hardcore weapons, and we'll occupy countries so you don't have to!" (How is it even legal to do that?) But it wouldn't have occurred to a government to privatize military services unless contractors that could provide those services already existed. But the contractors wouldn't exist in the first place if they hadn't known there was a market for such things.

L-girl said...

But it wouldn't have occurred to a government to privatize military services unless contractors that could provide those services already existed. But the contractors wouldn't exist in the first place if they hadn't known there was a market for such things.

Yes, and around and around it goes.

Lorraine made a good point, above, that I missed in my comments: not x minus something, x plus something.

In this case - libraries - it probably is x minus, at least to begin with. But privatization NEVER benefits the taxpayer in the long run - only the corporation, shareholders and whichever pols the corp paid off to get the contract. When the pol doesn't get reelected or doesn't run, he/she knows where to go for work.

L-girl said...

From Library Journal: What a Library Closure Taught Me