[WS:] OK, I see. So there are actually two phenomena involved. One is labor cost cutting - which as you say is indeed the same animal for the public and the private sectors, except that the private sector faces fewer restrictions in doing it. The other one is the outsourcing of government functions to private businesses that I mentioned earlier. It is a different thing than simple cost cutting, because it is a pursuit of a political agenda of neo-liberal institution building rather than simple cost cutting. In many instances outsourcing adds rather than cuts costs.
Of course, we have no way of knowing which of the two motivated Bloomberg & Co, but I would bet that it was more than simple cost cutting.
Wojtek