Monday, September 24, 2007

U.S. corporation takes another piece of B.C.'s human service work
Sept. 21, 2007

For better or worse, the bulk of B.C.’s back-to-work programs for people with disabilities are now under the control of a large, aggressive American corporation.
The ink is barely dry on the Aug. 3 agreement that saw the sale of the local company that has run the programs up until now - WCG International - to Arizona’s Providence Service Corp. So it’s much too soon to speculate whether clients will notice any difference, or to assume that it’s automatically a bad thing when one more big U.S. company takes over yet another aspect of B.C.’s human services.
But man, I get cold shivers down my spine when I think about how easily British Columbians are giving this stuff up, all of it without a whisper of public debate. Providence in particular is a heavy-duty acquisitor of government social-service contracts, and delighted to be gaining its first foothold in Canada.
Providence bought WCG less than a month after the Victoria company had secured the better part of $18 million in contracts with the Ministry of Employment and Income Assistance. Of the eight contracts awarded in B.C. for services to people with disabilities, WCG secured four of the most lucrative ones - Vancouver Island north and south, the Fraser Valley, and northern B.C.
WCG has run welfare-to-work and the Triumph disability program for several years now, so no surprise it got the contracts. First hired by the New Democrats in the mid-1990s to get people off welfare and back to work, the company has continued to do very well under the Liberals.
It’s difficult to gauge the success of the venture overall, given that the only absolute measurement is whether fewer people are receiving welfare. We don’t know if their lives have been improved because of that, or if they managed to maintain whatever job was found for them. External factors - a booming economy, for instance - complicate things even more.
So all that can be said with certainty about this past decade’s efforts is that 230,000 fewer British Columbians are on welfare now compared to 1995, and that companies like WCG have played a key role in that.
That our streets, hospitals and jails are now overflowing with people who are no longer receiving welfare - well, that’s a subject for another day. For now, let’s stick to the sale of WCG, and what it means to have a U.S. monolith now calling the shots in great swaths of the province.
Providence founder Fletcher Jay McCusker was running for-profit reform schools when he “saw an opportunity” in the mid-1990s to expand the business.
Governments throughout the U.S. were losing interest in providing social services, but in many cases were required by federal law to continue the work. Meanwhile, social need was growing. For the private sector, those factors pointed the way to a “recession resistant” industry, notes the Providence Web site in its section for investors.
Providence now has a workforce of more than 7,000 operating a soup-to-nuts list of social services in 37 states. The purchase of WCG marks Providence’s first foray into work programs for people with disabilities, but its other offerings run the gamut: probation services; domestic-abuse counselling; foster care; parole supervision; child and youth behavioural programs. Florida’s entire child-protection system is now run by Providence, under a contract the company touts to potential investors as “economically insulated.”
In the topsy-turvy world of profiting from human misery, worsening economic conditions are actually “market drivers” for companies like Providence. There’s a financial interest in maintaining poverty and suffering.
With all the social problems the U.S. is experiencing, that means there’s nowhere to go but up. The emerging industry that Providence defines has the potential to thrive in times of economic downturn.
And if two years in a row of “double-digit returns” aren’t enough to convince wary investors of that, Providence offers a grim array of statistics to verify the growing dependency on its services. More than 40 million Americans now living in poverty. Almost five million adults released every year on parole. Two million children needing protective care. Half a million kids in foster care. High-school dropout rates at 33 per cent and rising.
The company adds that it is “further driving revenue growth by expanding into select geographic markets, including Canada.” We’re a prime market, as it turns out - lots of “liberal benefits” for job training and government interest in offloading the provision of social services.
Do we want to go in this direction? Is there even time to ascertain that before all is lost?
Providence is voraciously expanding its empire by buying up businesses like WCG and signing management contracts with not-for-profits. In an age when bigger is always assumed to be better, each acquisition positions Providence to snap up even more government contracts.
“Most of our competitors are small, local, not-for-profit kind of United Way agencies. This has historically been very parochial - that is, they are interested only in their community and providing services to their community,” McCusker said in a recent interview with the Wall Street on-line magazine “The more we do, the more credible we become with the state procurement people.”
He’s right. And it really scares me.

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