Why Privatizing Government Services Would Hurt Women Workers

Executive Summary This report analyzes the implications of privatization for women workers, especially those employed in low-end occupations. Data analyzed show that women disproportionately depend on the public sector for jobs that pay decent wages and offer benefits. This is especially true for African American and Hispanic women, and for women who do not have a college education. In part, higher wages and better access to health and pension benefits in the public sector can be attributed to higher rates of union coverage. The evidence suggests that privatizing government services will have a negative impact on women workers, especially those workers who are most vulnerable. Over the past two decades, employment in the public sector has grown much more slowly than employment in the private sector. In 1979, 16 percent of working men held public sector jobs, while in 1998 only 13 percent did. For women, the share employed in the public sector dropped • The proportion of workers employed in the public sector declined for both women and men between 1979 and 1998, with especially pronounced declines for African American and Hispanic workers. • In 1998 almost one in five women held a public job (18 percent), a higher rate than among men (13 percent). This was especially true for African American women (22 percent). Public sector employment declined for both women and men between 1979 and 1998 with a somewhat sharper decline among men. Focusing on 1998, the most current year for which data is available, the report shows that median earnings in the public sector are higher than in the private sector for most categories of workers. • Median wages for women without a four-year college degree are 15 percent higher in the public sector. For women with a college degree, wages in the public sector are 7 percent higher than in the private sector. • Among women, 72 percent of public workers participate in a pension plan and 69 percent have employer-provided health insurance. By contrast, in the private sector less than half have either benefit, and in the case of Hispanic women, less than a third do (see Table 5). Thus, privatization is likely to erode the wages and benefits of women workers, especially for African American and Hispanic women and those with fewer years of formal education. Wage ratios shown above are useful descriptions of employment conditions, but they can also be misleading because …