New York City Mayor Mamdani is revolutionizing government efficiency by cutting wasteful contracts with companies like McKinsey, saving millions without compromising essential services. Will this progressive approach inspire a national movement against inefficient outsourcing?
I understand where you’re coming from, but the value proposition is pretty enticing to groups like NYC government. A consulting group reduces their legal liability (if something happens, the consulting firm is at fault, or the consultant themselves). It sharply reduces ongoing payroll on the books. It reduces the need for HR departments, because that’s the job of the consulting firm. And hopefully, if you’re smart when you make the contract, you get more workers and more skilled workers for the money you spent than you could get by direct hire. Now, obviously in this case, the workers that were provided were unskilled and failed at their tasks, so cancelling makes sense. And if the consulting firm isn’t a bunch of scumbags, it’s good for everyone. The City gets tasks completed and doesn’t have to maintain a pension or the like, the consulting firm makes a huge pile of money and can parlay their learnings and platforms into providing other services to the city or local governments, and the contractors/consultants get to have control over their employment and a wide range of experience across cases.
Obviously the moment one group gets too greedy without the others responding (as has happened), you get situations like this.
Is paying people less the most important thing? I disagree with that assumption. Pensions are a good thing imo. They encourage retention, which reduces turnover.
Is it a good thing for governments to evade legal culpability by outsourcing? I prefer power to have more oversight, not less.
I am only speaking in generalities, because I don’t know much about what McKinsey actually got fired from doing. I’ll revise my points if I’m missing anything important about that. Just woke up, can’t be arsed to check until after coffee.
My understanding of the McKinsey deal (from across the Hudson - but with friends who work as contractors with companies for City agencies, just fyi), is that they were brought in because the City literally couldn’t afford to hire the best people for whatever roles they needed. Plus, there were a pile of lawsuits that really made them leery of bringing on more employees in certain areas. Morally I agree with you that paying people less isn’t the best goal - but the city taxes are murder and reducing personnel costs to one lump sum for a part of the City was a way to save money for the taxpayers. And same with the oversight, but in this case it’s not about power having oversight or not. These are generally (as I understand it) workers and functionaries, the ‘butts-in-seats’ people in the office that make things work while the big guys do whatever it is they’re doing. Sometimes they’re the idea folks, but not often. Every lawsuit where NYC isn’t potentially liable means less time and money spent to employ counsel for the city. Every HR dispute that’s between an employee and their private employer is something that can’t be thrown into the Post or the Journal to propagandize.
The group was also brought in with goals and expectations of results. Like reducing costs and violence at the named prisons (Rikers, etc) - they’ve failed. They were brought in to help streamline and support the Board of Health, and update their systems. They’ve so far failed and would be in worse shape if they hadn’t subcontracted to smaller firms. The City finance department, they haven’t made audits smoother either. Essentially, they promised results and skilled workers that the City couldn’t afford to employ directly, and lied. So what started with a good value proposition to the City has turned into a nightmare, and decisive action is needed.
I wonder what their track record is like. Do they generally fail this badly? Consultants who show a pattern of weaponised incompetence should be held to account imo.