Deregulate the Garbage Industry

By Charles Tolleson

During the 30 years before (1947-1977) the Airline Deregulation Act of 1978 there were 117 labor strikes against U.S. airlines. During the 30 years after (1979-2009) airline deregulation there have been less than a third of the prior 30 years, about 35 labor strikes against U.S. airlines. This data shows that government regulating a market causes disruption and above market costs to the investors, employees, and most of all, the consumers.

When the government creates a contract with city employees to pick up garbage there is no competition to improve efficiency because the city will just pass along the cost to the consumer.

Nor does it matter if City, CA acts as a negotiator for the consumers and gives an exclusive right to a private company, like employee owned Recology, to pick up all the garbage in City, Ca.  City, Ca. receives a 5% finder’s fee and fees for street sweeping. Recology gets a 10% profit over costs during the ten year contract. If the owner employees of Recology want a good salary they do not have to strike nor do they have to compete and find more productive ways to improve their profit. They can just pay themselves a good salary, vacations, and pensions and just charge it to costs, like the fees to the city, all of which the consumer will be forced to pay. The absence of competition creates inefficiency.

Recology used to be Norcal Waste. They changed their name recently to Recology, (recycle and ecology). It was a brilliant marketing move. Everyone wants to use Recology just for their name.

I'm glad my city does not negotiate for my other vendors like; Internet service, telephone, clothing, and groceries, or package delivery. What if the government said I could only use FedEx for package delivery in My City and that I had to pay My City a fee for selecting FedEx to be my vendor?

Speaking of telephone service, the government used to negotiate for our telephone service when AT&T, affectionately known as Ma Bell, was the only telephone company. The government set the rates and the consumer paid for the staid monopoly service. The Communications Workers of America could get higher wages than the market would offer and then the consumer had no choice but to pay the wages. When Ma Bell was broken up in 1984 phone calls became cheaper, much cheaper.

I heard a retired nuclear engineer say he liked it better under Ma Bell because there was only one company to deal with. He said the choices today for telephone service are so numerous it is confusing and stressful. That is the opinion of many consumers. Choices become stressful so they are willing to let the government negotiate and pick a vendor for the consumer.

“Intellectual discourse is the new coliseum.” Chuck Tolleson, Jr.