In tough economic times, the hard decisions are never popular. This was the case with California Governor Arnold Schwarzenegger’s decision to order 200,000 of his state workers to accept the minimum wage set forth by the federal government. The hope is the state’s legislative arm can pass a budget before August 1, says EmploymentCrossing.com founder A. Harrison Barnes. The governor also assured those workers that their balances will be paid in full retroactively once the budget is approved.
With close to a 20 billion dollar budget, no one denied drastic times called for drastic measures; it’s just the state workers were a bit unprepared for their new salaries. A. Harrison Barnes mentions the minimum wage is currently set at $7.25 per hour. This, as one might expect, does not bode well with many in the state. California Assembly Speaker John Perez (D-Los Angeles) let his disapproval be known at a press conference and was quoted as saying, in part, “…using working families as leverage is not the kind of leadership we need to get through this budget process”.
If state workers were waiting for an eleventh hour save, they were disappointed when a California court said the governor was will within the legal boundaries. Appeals are being filed. It’s likely, too, that many will be searching for new jobs versus riding the storm out on the state payroll. Many say that’s a big gamble for residents in a state that was hit especially hard during the recession. This isn’t the first time the governor has ordered state workers’ salaries cut. Budgetary problems once before resulted in drastic measures by Schwarzenegger. Their unemployment rates are still high and it doesn’t appear a solution is on the horizon in terms of balancing the state’s budget.
The EmploymentCrossing.com founder says it’s likely these cuts will save the state close to 1.2 billion dollars per month; that’s if the state controller complies with the order. John Chiang, California Controller, says the computer system simply cannot meet the demands of so many pay adjustments. He says the technology isn’t available to his office. He told the Court of Appeals that his office could not comply and that the computerized systems that could handle such a request wouldn’t be a consideration until 2012. It’s not clear on how these cuts will be handled, as the Courts have cleared the way and Schwarzenegger has ordered it. Some even say by the time a solution is found that can handle so many requests, the budget could very well be remedied, making the cuts moot.
While these changes currently only affect state workers in California, other states could follow suit should the need arise, once again turning the employment sector on its head since not all employees would agree to stay during difficult financial times that required a monetary sacrifice on their parts.
