Privatization decreases direct accountability to the public and reduces government flexibility and control. Private sector workers who deliver public services are directly accountable to their company, not to citizens. This reduces citizens ability to hold their public officials and workers responsible for the quality and timeliness of public services. Privatization means the government loses the flexibility to respond directly to unforeseen situations not covered by contracts. As more public services are shifted to the private sector, government managers lose the experience necessary to handle crises, and the private service provider becomes more closed, secretive, and easily subject to manipulation.
Privatization undermines local economies by putting people out of work.
While proponents of privatization claim that public jobs are simply transferred to the private sector, the public sector incurs many hidden costs as a result of layoffs. The government pays the entire cost of unemployment insurance benefits during the first 26 weeks of unemployment and half the costs of benefits extended through the 39 th week of unemployment. Some laid-off workers may also require public assistance because of economic circumstances resulting from the layoffs. Privatization significantly diminishes social and economic opportunities previously available to women and people of color through government employment. Traditionally, the public sector has provided greater employment opportunities for women and minorities, both in absolute numbers and in level of jobs.