Representatives of unionized public servants often raise concerns about PPPs on grounds that they threaten the job security of current employees and may worsen wages and working conditions for those selected to work on the project. In the New York metropolitan region, compensation in state and local government generally exceeds that for comparable occupations in the private sector.101 The private partner's latitude to achieve efficiencies through substitutions of capital and technology for labor and through reforms of work rules may be important to the viability of the project. In fact, this may mean that public employees are replaced or rehired by the private partner under different terms.
The consequences of these changes for current public employees should not be ignored, and public officials should decide if they are willing to sacrifice some of the benefits of PPPs to provide protections. Public officials can act unilaterally by guaranteeing the hiring of displaced workers in other public sector jobs that become available; alternatively, they can negotiate with the private partner to establish contractually compensation or work conditions similar to that provided to public employees.
The deals negotiated in Chicago for the Skyway and Midway Airport illustrate the two approaches. For the Skyway, the private firm was required to interview existing employees, but was under no obligation to hire them. Employees who were not rehired were offered preference for hiring in other city agencies. Labor agreements on the Midway deal are governed by a 2006 state statute mandating that existing employees to be hired by the concessionaire must be offered employment under "substantially similar terms and conditions." The same condition applies to new employment opportunities granted to displaced employees by the City of Chicago in other city agencies.
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101 See Citizens Budget Commission, "The Case for Redesigning Retirement Benefits for New York's Public Employees," April 2005. Available online at http://www.cbcny.org/RetirementBenefits.pdf