Nearly nine in 10 Americans get their water from a publicly owned utility. This means that when the vast majority of us pay our water bill each month, we write the check to the city, not to a privately owned water company. This is a good thing: A new report finds that privately owned, for-profit water companies are rarely good for the consumer.
Researchers from consumer advocacy group Food & Water Watch looked at private versus publicly owned utilities, and found that for-profit water suppliers are 58 percent more expensive than public utilities on average. And some private water suppliers are more expensive still: In New York and Illinois, private companies charge double what public utilities do; in Pennsylvania, they charge 84 percent more; in New Jersey, 79 percent more. Researchers also found that private companies provided worse service, were less accountable, and were more likely to make decisions based solely on profit than public utilities. Basically, if you’re getting your water from a for-profit company, you’re probably getting screwed.
The mismanagement of water supplies by private companies is nothing new. Food & Water Watch reports that New York City created a public water utility in the 19th century after a cholera outbreak in a privately owned system killed 3,500 people. That system was owned by the predecessor of JPMorgan Chase. Los Angeles and San Francisco soon followed suit — and the public benefited: More people got safer water for less money.
“Public ownership reaped great public health outcomes in large part because it allowed for more-equitable service,” the report’s authors write. “Local governments extended water lines to low-income and black communities that had been neglected by private companies.”
Of course, that doesn’t mean that the publicly held system is perfect. Just look at Flint, where local authorities switched the city’s water source in order to save money. The switch has been linked to both lead poisoning and an outbreak of Legionnaires’ disease that has killed at least 10 people.
And not only is the water in Flint toxic, it’s expensive: Flint charges an insane $864.32 for an average annual supply of water — the highest rate in the whole county. But Flint is the outlier among public systems. The cheapest community water systems, researchers found, are all publicly owned or not-for-profit systems. Phoenix, whose water supply is also publicly owned, charges an average of just $84.24 annually. And Phoenix is in the desert.
Obviously, this system isn’t working. Why should people in Flint pay so much more (for so much less) than people in Phoenix? And while we all may be envious of Phoenix’s low water bills, should people living in a water-starved, arid metropolis really be paying so little? What incentive do you have to conserve when it’s so cheap? The cost of water, it seems, has little to do with its value.
Since the Flint water crisis hit the news, free-market conservatives have argued that the best way to fix the water problem is to privatize. As Salon points out, the vice president of policy at the Reason Foundation, an anti-regulation group whose board David Koch sits on, said privatization would solve it all. These are the same people who argue for the privatization of schools, of prisons, of Social Security. But as Food & Water Watch found in its analysis of water systems, privatization is hardly the answer: The answer is better governance.
“Rather than running water systems like businesses, or worse, handing them over to corporations, we need increased federal investment in municipal water,” said Wenonah Hauter, executive director of Food & Water Watch. “With this federal funding, we can help avoid future infrastructure-related catastrophes.”
And we can help avoid another Flint.
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