CARPE DIEM: A City Growing, A City Dying

Saturday, March 01, 2008

At 3/01/2008 7:50 PM, Anonymous said...: I’m always confused on how companies/municipalities account for privatized or contracted workers. Is there a standard to fold back in the cost of the contracted worker so comparisons can be readily made?

For example, say a city has 20 employees making $20-per-hour; that would be $3200 per day in wages for an 8-hour day.

Now, suppose the city decides to save money, so they contract out 10 employees at $10-per-hour and keep 10 city employees at $20-per-hour. That works out to $2400-per-day.

Disregarding any fringe benefits, the headcount has been reduced by 1/2, but the cost has only been reduced by 25%. Shouldn’t the new number of workers be considered 15 instead of 10 when figuring the number of employees?

Saying the company has cut their workforce in half seems deceptive. I’m not sure how the ratios between Detroit and Indianapolis are figured, but I don’t think a city that has heavily privatized can be directly compared to a city that has not without adjustments.

Do any of you MBA graduates/students or city administrators know how the human resource numbers add up in these types of cases?
At 3/01/2008 7:50 PM, Anonymous said...: This comment has been removed by the author.
At 3/01/2008 9:43 PM, juandos said...: Detroit is an example in this video clip that Newt Gingrich has on his American Solutions that you might want to listen to...

CARPE DIEM