Point Austin: Jobs to Go

Last week, the Texas State Employees Union discovered yet another new wrinkle in the state's plan to privatize and mechanize the eligibility review system for health and human services. Based on a job-recruitment advertisement placed by one of the companies sub-contracted to provide a telephone eligibility "call center" in Midland, the prospective operators would be paid a starting wage of $8 an hour. At that rate (about $1,280 a month, gross), a single parent with one child, or a single-income family of three, would be eligible for food stamps. And should the company not provide affordable health insurance (as is likely), their new employees would also be eligible for Medicaid and the Children's Health Insurance Program.

"This is just another hidden cost of the low-wage privatization," commented TSEU Vice-President Mike Gross in a press release. "When you look at all the cost created by privatization, it's not a good deal for the taxpayers. It's not too late for [the Health and Human Services Commission] to take a hard look at the numbers and call off its call center scheme."

Gross was presumably referring to the fact that in the very act of creating and staffing the call centers, the state of Texas will have simultaneously created its own social-service clients who will themselves be applying for the programs they will be hired to administer (by remote control, of course).

But there's another way to look at it, and no doubt the governor's executive director, Albert "Axe-Man" Hawkins and those other sharp-eyed folks at the HHSC were prescient enough to foresee it. Under this new system, the new state workers hired at these sub-living wages will themselves be able to administer their own applications for food stamps, Medicaid, and CHIP. They can interview themselves, review their own meagre pay stubs, determine their own levels of eligibility, and sign and hand-deliver their own approval letters – saving an envelope and a stamp in the bargain.

Now that's what I call eliminating the middleman!

The only thing I haven't quite been able to figure out is how they can call themselves on their own phones at the call centers. But I'm sure those clever folks at Accenture – the Bermuda-based consulting conglomerate holding the $899 million contract to implement this monstrosity – will think of something.

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By the Numbers

And I'm also sure that Hammerin' Hawkins and company will duly explain how hiring state employees at welfare-eligible wages – and by the way generating several thousand abruptly unemployed and welfare-eligible former state workers in the bargain – will certainly save the state of Texas buckets of money. That's what they told us when the Legislature hatched this heartless and brainless scheme in 2003, decreeing that work that had required 12 state agencies heretofore, in Texas' notoriously stingy health and human services system, could be comfortably accomplished by five.

As it happens, we already have a good idea of the accuracy of the HHSC's financial projections. When it awarded an $85 million contract for the agency's consolidation of payroll and human resources to the Ohio-based Convergys consultants last fall (you gotta love these corporate names, right out of bad science-fiction), the commissioners promised $21.7 million in savings over five years. (Actually, they started at $63 million and steadily worked their way down.) Well, last month, the State Auditor's Office issued a report saying not only that it could not confirm the HHSC's grandiose projection, it could not confirm any projected savings at all under the privatization contract. (The HHSC has acknowledged no savings, yet – but just you wait ...)

Pointedly, the auditors noted that "significant errors and omissions in the Commission's cost data" made it impossible to determine if privatization would be cost-effective at all. That was for an $85 million, in-house contract; the Accenture contract to consolidate and mechanically streamline eligibility services all over the state is for $899 million. Why should anybody believe Albert Hawkins now when he insists, as he did to The Dallas Morning News last week, that he is "really confident" in the call-center plan, insisting that it will save the state more than $150 million a year? And what will the auditors find, a year or two from now, when they review the financial results of this mammoth exercise in corporate-subsidy and social-service slashing under the guise of "efficiency" and "fiscal responsibility"?

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We Regret to Inform You

It's not even clear yet that the plan itself – which will close about a third of the currently more than 300 eligibility offices, to be replaced with four call centers – is legal. Hawkins insists he's pushing forward next month, although the federal food stamp honchos at the U.S. Department of Agriculture have not signed off on the new system, which may violate federal requirements of personal interviews of applicants. Under a telephone system operated by low-wage workers, many potential clients will simply fall off the state's radar, which is precisely the point – it's called "rationing by regulation," or in this case, deregulation. More Texas-style economic development.

And whatever the feds decide (don't hold your breath), we already know what the plan will do for current state employees (those who don't manage to latch on to one of those great $8-an-hour telephone jobs). The Statesman reported last week that 2,900 eligibility staffers (250 in our area) have been informed, via e-mail, that their services will no longer be needed after May 1. A few may get hired by the privatizers, and they can promptly begin processing the food stamp applications of their former colleagues, along with, perhaps, their own.

And in Austin, if they're really lucky, they'll soon be able to get jobs delivering pizza to high-tipping Samsung employees.

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Speaking of Samsung, last week, after we went to press, Samsung Electronics and Samsung Semiconductor pled guilty to a felony charge of price-fixing brought by the U.S. Department of Justice and agreed to pay a $300 million fine (the second largest ever).