Want a survey on the extent of outsourcing and the conditions of low-wage workers

Today, Sanna Magdalena Mörtudóttir, socialist city councilor, submits a proposal to the newly elected Reykjavík City Council that a survey be conducted on the extent of outsourcing, contractor agreements with employees, and staffing agencies in institutions and companies under the auspices of Reykjavík City and companies in which the city holds a share. The occasion is, among other things, a recent exposé on the conditions and legal status of staff in Harpa and how the board and management of a public company considered it their role to suppress the wages and rights of the lowest-paid staff.

In the proposal's explanatory statement, it says that the protests of the lowest-paid people in Harpa, the music and conference hall, have drawn the attention of city residents to how common contract work and other outsourcing was in jobs that were previously performed by people in permanent employment and with full employee rights. This gives rise to a comprehensive survey on the extent of such contractor agreements and other outsourcing by the city and institutions and companies connected to it. In recent years, private companies have used staffing agencies and contractor agreements to curtail employee rights, moving them away from the rights guaranteed by the traditional labor market and into the uncertainty of temporary contractor agreements. This arrangement has also broken up employee groups, which are now often divided into better-paid people who are permanently employed and lower-paid people who are not employed by the company or institution where they perform tasks, but rather work either for themselves or for an unrelated company. This has had a significant impact on workplaces, creating class divisions and making the lowest-paid people even worse off in the workplace than they were before. It is proposed that a survey be conducted at all workplaces under the city's auspices, and the extent of contracting, staffing agencies, and outsourcing be measured, and staff be given the opportunity to express themselves on the developments of recent years.

“Outsourcing and staffing agencies have severely damaged the rights of employees, not only domestically but all over the world. This is one of the toxic effects of neoliberalism, one of the tools of the rich to break down society,” says Daníel Örn Arnarsson, socialist deputy city councilor and board member of Efling, a trade union. “We need to tackle this scourge in private companies, but the exposé in Harpa showed that this problem extends far into the public sector. In many places, the people who clean or handle food have been cut out of the employee group, they are no longer city employees but work for an unrelated company in town. And often they work for Dagar, a company owned by the finance minister's family. This is reportedly done to save money in the public sector, but savings primarily consist of getting an external company to suppress the wages and rights of the lowest-paid people. The public sector is, in fact, paying the owners of these companies, including one owned by the finance minister's family, to suppress the wages of the worst-off employees. This is not just corruption of society, this is degeneration.”

Sanna and Daníel say that this change in the labor market has been driven forward without the consequences being known. “And that is common to all changes of neoliberalism,” says Sanna. “They were pushed through without the consequences being examined. This applied, for example, to the breakdown of the revenue collection system of the state and the city. Taxes and fees were abolished for the rich without the inevitable consequences being discussed; that is, increased taxes on employees, cuts in public services, and increased fees within the welfare, education, and healthcare systems. Outsourcing tasks from the public sector is said to save money, but little indicates that this is the case. What happens is that the workload on the lowest-paid people increases, their conditions worsen, people experience more stress and burn out sooner. The supposed savings are therefore driven on the backs of the worst-off. And the public sector does not get the benefit, but rather the owners of companies that take over tasks previously performed by city employees.”

“A recent survey by the British National Audit Office on hundreds of projects that had been outsourced from the public sector showed that virtually none of them had yielded benefits for taxpayers, some showed no benefit for the public, but the vast majority involved increased costs for taxpayers and users and reduced conditions for staff. This should not surprise anyone,” says Daníel. “Neoliberalism is a bad policy. It is a bad policy that always puts the interests of the rich first. That should be obvious to most.”

Sanna says that unfortunately it is difficult to grasp the extent of outsourcing, bogus contracting, or staffing agencies at Reykjavík City. “That is why we want to investigate this,” says Sanna. “It is not possible to respond to societal changes without knowing their scope and nature. And that is why it is not enough to see numbers on paper. We want to hear from the people who have experienced these changes. What impact does it have on their status to be moved out of the employee group and into an unrelated company? What is the change in the status and conditions of cleaning staff today compared to when they were directly employed by the relevant institution? Has class division increased in workplaces? Can a growing distance between managers and employees be detected, are they more arrogant, and do employees find it harder to be heard or have an influence? These are all questions that need to be answered so that we can formulate a new employee policy.”

“It is at least clear that we have reached an impasse,” says Daníel. “It is a serious problem that owners of private companies apply such an employment policy against their employees, but it is completely absurd that Reykjavík City, the association of our city residents, imitates this. Is it in the interest of city residents that the position of the worst-off in the labor market be made even weaker? I am not aware of such a demand or that this has ever been voted on, and I doubt that there is any support for this among city residents. Reykjavík residents want a fair and just society. At least the Reykjavík residents I meet and talk to.”