Privateers argue that privatization brings lower costs and higher efficiencies. The evidence is mixed. In many areas, public firms are very competitive with private firms. Municipally owned electric utilities, for example, may be even more efficient than investor owned utilities. In Indianapolis, where public workers compete against private firms for city contracts, in a majority of cases the public workers have been the victors.
Privateers offer many examples of where private firms provide services cheaper.
But much of the U of M's savings, as is true of many privatization efforts, results from the lower wages paid by the private laundry. Apparently, the University believes that Minnesota taxpayers will go berserk if asked to pay livable wages to the people who provide public services. But if outside contractors do the job cheaper only because they pay their workers less, they don't deserve our tax dollars. Chicago has debated an ordinance that requires private contractors to pay wages comparable to those paid to the city employees they would replace. That would guarantee that any savings derive from service improvements.