Schwarzenegger cuts pay of state workers to minimum wage

posted at 10:12 am on July 2, 2010 by Ed Morrissey

It’s not the first time that the Governator has tried this in the absence of a budget, but it will certainly be the last.  Since California’s legislature failed to produce a budget, Arnold Schwarzenegger used his power as governor to reduce wages on most state workers to the federal minimum wage — and for some state workers, to zero.  However, it’s unlikely that any worker will see their pay actually cut, even temporarily:

The Schwarzenegger administration today ordered State Controller John Chiang to reduce state worker pay for July to the federal minimum allowed by law — $7.25 an hour for most state workers.

The instructions from the Department of Personnel Administration exclude roughly 37,000 state workers in six bargaining units that recently came to tentative labor agreements with Gov. Arnold Schwarzenegger.

Some employees, such as doctors and lawyers, would get no pay because federal exempts them from any minimum wage requirement.

The minimum wage law has an exemption for lawyers?  Someone on a Congressional staff is going to get an angry letter from the Trial Lawyers Association.

Schwarzenegger tried this in 2008, too, but it didn’t fly.  The state’s controller refused to follow the edict, worried that the employees would sue in federal court.  Also, the cost of the change in payroll would be substantial, and eventually the state would have had to fork over the back pay anyway.  The change would only be temporary, and California would have to restore the earnings lost when the budget passed.

Instead of gimmicks like these, California’s political class should be looking at ways to actually reduce payroll by reducing the size and scope of government.   It seems like Schwarzenegger and the legislature want to make the state’s bloated bureaucracy cost even more rather than address the real problems of their budget disaster — just as California has done for the past several years.


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How long before they just get paid in IOU’s again?

search4truth on July 2, 2010 at 10:14 AM

I’d had enough of this twin. Put Danny DeVito in charge for a while.

DrAllecon on July 2, 2010 at 10:16 AM

He is a huge part of the problem. His signing off on binge spending is the problem.

seven on July 2, 2010 at 10:17 AM

Schwarzenegger tried this in 2008, too, but it didn’t fly. The state’s controller refused to follow the edict, worried that the employees would sue in federal court.

No. He was worried about his political future in a state dominated by public employee unions.

Mark1971 on July 2, 2010 at 10:19 AM

Let California rot.

madmonkphotog on July 2, 2010 at 10:19 AM

Send more unemployment benefits! That will stimulate the economy!

BacaDog on July 2, 2010 at 10:23 AM

To all those dependent on government….

Austerity is coming folks, it has to as the well is run dry.
Get used to it.

Jvette on July 2, 2010 at 10:24 AM

CA. is all about gimmicks.

They will never do what needs to be done.

Suffer the consequences.

But hey, enjoy the latte!

artist on July 2, 2010 at 10:24 AM

The first time the state missed the budget deadline was in 1990, when I was working for an Assemblyman and the Republicans were much closer to a majority. All of us missed a paycheck, though the state made it up later and the utilities voluntarily suspended collections for state employees. There was an attempt made by some Republicans to pass a bill that would suspend the paychecks of the legislature and all of its employees as long as there was not a budget, but it failed. Many of them voluntarily refused to take their paychecks, but a lot of them didn’t care.

So it’s not like this is unprecedented. California’s budget has been a mess for 20 years.

rockmom on July 2, 2010 at 10:25 AM

Meanwhile in Chicago, as reported on WGN:

Unions representing nearly 15,000 construction laborers in Chicago have voted to strike.

…Local 150 wanted a five percent pay increase and affordable benefits.

…The strike will leave major construction projects like the Eisenhower, Wacker Drive, and the Congress bridge in the lurch.

…Abandoned heavy equipment is another issue that IDOT will face as the strike begins.

Fallon on July 2, 2010 at 10:27 AM

Stick a fork in California, it’s done.

Caper29 on July 2, 2010 at 10:30 AM

Fallon on July 2, 2010 at 10:27 AM

But unions are the solution, not part of the problem!!! /sarc

search4truth on July 2, 2010 at 10:31 AM

CA State employees @ minimum wage should appreciate the sacrifices required of Leftist liberals spreading the wealth through the sewer. Gee whiz, it isn’t just conservatives Obama forces to give ’til it hurts?

This is going to get dirty, public employee unions vs. SEIU on wages. Will all unions actually go down together? Hardly.

How long before they just get paid in IOU’s again?
search4truth on July 2, 2010 at 10:14 AM

Minimum wage vs. worthless IOU, hmmmm.

Place your bets while the UN decides to dump the dollar.

maverick muse on July 2, 2010 at 10:33 AM

Meanwhile in Chicago, as reported on WGN:

Unions representing nearly 15,000 construction laborers in Chicago have voted to strike.

…Local 150 wanted a five percent pay increase and affordable benefits.

…The strike will leave major construction projects like the Eisenhower, Wacker Drive, and the Congress bridge in the lurch.

…Abandoned heavy equipment is another issue that IDOT will face as the strike begins.
Fallon on July 2, 2010 at 10:27 AM

I live here in Chicagoland, and people are giving the finger to the workers on the picket lines as they drive by…I’ve seen it several times already…getting ugly.

Fire them and hire the real un-employed.

PatriotRider on July 2, 2010 at 10:33 AM

Fallon on July 2, 2010 at 10:27 AM

Unions, meet your non-union illegal alien brothers and step aside. Strike?! Chicago is thug-land, so perhaps they’ll be the last to see the illegal aliens take their union jobs without having first become union members and “faith” induced illegitimate US citizens.

maverick muse on July 2, 2010 at 10:37 AM

Pay them with starlette autographs they can sell on Ebay.

Akzed on July 2, 2010 at 10:37 AM

…Abandoned heavy equipment is another issue that IDOT will face as the strike begins.

Fallon on July 2, 2010 at 10:27 AM

That shouldn’t last to long. Abandoned heavy equipment has a way of disappearing rather quickly.

chemman on July 2, 2010 at 10:37 AM

The minimum wage law has an exemption for lawyers?

Yep, for “licensed professionals.” Which means cheap law firms can hire lawyers for a crappy hourly wage, work the crap out of them, and not pay overtime. I know few here care and everyone loves to hate on lawyers, but it’s still BS. The “Trial Lawyers Assoc” only cares about the stereotypical rich lawyers, and believe me, they don’t care because they profit by this.

/aside

brak on July 2, 2010 at 10:38 AM

It is typical that unions will strike over more money, while a lot of good people are just trying to find a job period. The fact that they don’t understand why the normal worker hates the union guys is really beyond me.

search4truth on July 2, 2010 at 10:39 AM

Fire them and hire the real un-employed.

PatriotRider on July 2, 2010 at 10:33 AM

How far is too far?

Obama wants civil unrest so as to impose martial law as he dissolves the Constitution.

Ugly is just the beginning of Marxist Change.

maverick muse on July 2, 2010 at 10:40 AM

Shouldn’t have to pay lawyers they should have a bounty on em.
If we had more citizens and fewer lawyers in congress we wouldn’t be havin these budget problems!

dhunter on July 2, 2010 at 10:40 AM

The minimum wage law has an exemption for lawyers? Someone on a Congressional staff is going to get an angry letter from the Trial Lawyers Association.

This allows them to negotiate their fees (i.e. “nothing unless we win”, etc.).

J_Crater on July 2, 2010 at 10:41 AM

hm, maybe they are running out of other people’s money to spend.

Anyone see the Dem operative on BOR last night saying that there is plenty of money?

ORconservative on July 2, 2010 at 10:42 AM

The only way California will ever solve this is for the people to add a constitutional amendment that makes it a felony for failure to pass a structurally balanced budget by the mandated date. It should mandate that all members of the legislature are terminated and immediately charged for felony fiduciary malfeasance and that across the board cuts to the budget are automatically made to bring it into balance.

chemman on July 2, 2010 at 10:44 AM

This allows them to negotiate their fees (i.e. “nothing unless we win”, etc.).

J_Crater on July 2, 2010 at 10:41 AM

Yeah, but I was mainly just trying to joke about it. I should have explained it a bit better.

Ed Morrissey on July 2, 2010 at 10:44 AM

State Workers on minimum wage?!?!? What an insult to legitimate minimum-wage earners.

Fishoutofwater on July 2, 2010 at 10:46 AM

The last bubble that has to burst is the Goverment bubble. We will get nowhere until public unions are squashed!

bluemarlin on July 2, 2010 at 10:46 AM

It’s not the first time that the Governator has tried this in the absence of a budget, but it will certainly be the last.

That’s an understatement.

Dark-Star on July 2, 2010 at 10:48 AM

I don’t agree with this move. Workers who have negotiated a pay rate should be paid that rate. (The fact that the govt had their arms twisted by the Unions is not a factor – they still agreed.)

Going through the ranks with a combine harvester, on the other hand …

OldEnglish on July 2, 2010 at 10:51 AM

Also, the cost of the change in payroll would be substantial, and eventually the state would have had to fork over the back pay anyway.

SOLUTION: Send them nothing for the month of July. Just withold payment altogether. Don’t print the checks. No paperwork required. And don’t pay them back either.

fogw on July 2, 2010 at 10:53 AM

Get of Schwarzenegger’s ass… he tried to reform and he rebuffed…

ninjapirate on July 2, 2010 at 10:55 AM

The CA 2008 (or was it ’09?) decision to cut pay to minimum wage was upheld by a court, then the Comptroller appealed that decision. It is still tied up in appeals. The likely immediate impact is none. IOUs are probably going to make their comeback though.

Illinois is in even worse shape, with a $13 billion deficit. Cuts of $1.9 billion are proposed, with the rest papered over through gimmicks that would have Rodney Dangerfield laughing.

And a good time was had by all.

GnuBreed on July 2, 2010 at 10:55 AM

Oh, hell. Just put your illegals to work and save a bundle.

LarryG on July 2, 2010 at 10:56 AM

All I have heard about Arnold since he was first elected is….he tried, but couldn’t get it done. BS. Try, fail. Try again. Don’t try then throw up your hands and say OK let’s do it the leftist way.

What’s the world I am looking for here….oh yeah LEADERSHIP.

Reagan got a lot of what he wanted with huge Demo majorities in congress. It’s not unheard of.

angryed on July 2, 2010 at 11:06 AM

Instead of gimmicks like these, California’s political class should be looking at ways to actually reduce payroll by reducing the size and scope of government. It seems like Schwarzenegger and the legislature want to make the state’s bloated bureaucracy cost even more rather than address the real problems of their budget disaster — just as California has done for the past several years.

So he isn’t actually reducing their pay, he’s just delaying in.
Darn.

Count to 10 on July 2, 2010 at 11:26 AM

But Arnie is still getting a full paycheck right?

milwife88 on July 2, 2010 at 11:26 AM

More RINO lies .
Does anyone else see Arnold making a run for President in 2012 ?
Would Californians vote for him ?
Hindsight looks like conservatives should have voted for HILLARY .
I think rampant corruption would have been better than the ” COMMUNIST IN CHIEF ” we have now .
I wonder where all the nay sayers who said Palin and McCain were not good are now ?
Could Palin have been any more inept than Obama ? Would Palin been able to makes SOMETHING ?ANYTHING happen in 72 days in the gulf cleanup ?

ELMO Q on July 2, 2010 at 11:27 AM

But Arnie is still getting a full paycheck right?

milwife88 on July 2, 2010 at 11:26 AM

Arnie hasn’t taken a paycheck as governor.

Mark1971 on July 2, 2010 at 11:33 AM

I own a small business in San Diego. I do work in other states so I have to get my corporation approved in each of those states. In order to do this, I have to get a Certificate of Good Standing from the CA Secretary of State.
I went to the state building in downtown San Diego a couple of months to get the certificate as I have done many times. This time as soon as I walked into the office I was told by the only employee there…the office was closing in a few days and they were no longer offering services. I would have to apply for the certificate by mail and have it sent from Sacramento. I looked around the office…empty cubicles and packed boxes. Over in the corner was a purple SEIU poster on the wall. I couldn’t help but grin, because I am sure they had no idea as they were packing that their thug union was the reason they were going. The good news is that the certificates by mail would be $10 each instead of the $20 I had been paying previously. I was informed the extra $10 was for the privilege of getting them from the local office.

oceansidecon on July 2, 2010 at 11:33 AM

Sometimes I really miss California.

Then I read crap like this and am glad I left.

teffertoes on July 2, 2010 at 11:39 AM

Why doesn’t California just secede from the rest of the Nation and deal with its own problems as a sovereign nation?

Besides, if anything, it will mean we can finally kick Pelosi, Waxman, Stark, and the rest of the loons out of Congress once and for all!

pilamaye on July 2, 2010 at 11:40 AM

its a dog n pony show trick, once the budget is passed they get the back pay. its a FEEL good rule.
I would like to see the Constitution of Ca changed to read
If a balanced budget is not passed,All motor vehicles that are used by state legislatures are to be parked and not used until a balance budget is passed,
any one and every one that has anything to do with the budget process does not get paid. They wont get back pay once it is passed and they are all prohibited from running for re-election for 2 election cycles.

ColdWarrior57 on July 2, 2010 at 11:42 AM

Which means cheap law firms can hire lawyers for a crappy hourly wage, work the crap out of them, and not pay overtime. I know few here care and everyone loves to hate on lawyers, but it’s still BS. The “Trial Lawyers Assoc” only cares about the stereotypical rich lawyers, and believe me, they don’t care because they profit by this.

/aside

brak on July 2, 2010 at 10:38 AM

I have never met or heard of an attorney being paid hourly by their firm or company. And, to be exempt from O/T, one has to be a professional and paid by salary, not hourly.

Monkeytoe on July 2, 2010 at 11:46 AM

This is the perfect example of Leftist tactics. Rather than suspend the salaries of those responsible for the lack of a budget, Schwarzenegger uses the public employees as a pressure group.

Just exactly what the Dems have always done by pumping up the lower class to start a war. Way to come out of the closet, Arnie.

warbaby on July 2, 2010 at 11:52 AM

Chang (the Controller) is pointing out that A) doing this with the antique computers they run is impossible for various technical reasons, among which is the fact that CA already laid off the required COBOL programmers, and B) the Controller works for the Legislature, not the Governor.

I think they’ll be seeing full pay. If wishes were fishes, etc.

mojo on July 2, 2010 at 11:57 AM

In NC… one-time pay cut last year. No raises for two years for most state workers (NC state workers are not unionized). You can do it, CA.

mankai on July 2, 2010 at 12:09 PM

How long before they just get paid in IOU’s again?

This year’s IOUs will be different than previous years. If they issue IOU’s this year, they will not have to pay them until 2014. Imagine the hurt that will put on a small business doing a state contract that needs the cash flow.

crosspatch on July 2, 2010 at 12:17 PM

If you matched the revenues in 2010 with the expenses from 2005, the budget could be running a surplus instantly — but thousands of political-class parasites would be unemployed.

And, yes, I just pulled the year out of thin air…but it should be thereabouts. Let’s see…2009 general fund revenues $97,576; 2005 general fund expenditures $90,026. Yep.

cthulhu on July 2, 2010 at 12:30 PM

If no State workers showed up, would anyone notice?

hip shot on July 2, 2010 at 12:35 PM

Anyone got a spare nuke? We could take out Sacramento and start over.

GarandFan on July 2, 2010 at 12:41 PM

If no State workers showed up, would anyone notice?

hip shot on July 2, 2010 at 12:35 PM

Maybe not right away…but come next pothole season (whenever that is in CA), if absolutely NO state workers show up people d*mn will notice.

Dark-Star on July 2, 2010 at 12:42 PM

Apparently janitors, cleaners, etc. will get paid more than State workers if this is correct.

Stick a fork in California, it’s done.

Caper29 on July 2, 2010 at 10:30 AM

More like burnt to a crisp.

kiakjones on July 2, 2010 at 1:00 PM

I don’t feel sorry for a lot of Californians, including my best friend. You vote for a left-wing idiot of a RINO, you get what you pay for. He’s a dummy, an economic illiterate and a socialist. What did they expect? They got rid of Gray Davis for the rolling blackouts; I guess as long as Californians don’t have to deal with that, they’re happy. Cut our pay, take the police off the streets, depopulate the prisons, give welfare checks to the MS-13 gangs; just don’t cut off our lights and air conditioners.

Virus-X on July 2, 2010 at 1:01 PM

Is this a “close the parks” tactic to show the serious need for new taxes by Arnie?

RJL on July 2, 2010 at 2:33 PM

I see dead people I mean California idiots. They are all around me and they don’t even know they are idiots.

vulcannomad on July 2, 2010 at 3:02 PM

Default on all state-paid pensions; kick them down to PBGC maximums. If it’s good enough for the private sector, it’s good enough for government. Make the paying of bonuses to government workers illegal.

Fire anyone in state government that has ‘diversity’ in their title. Thin middle management as private companies do, by reducing the number of levels between the governor and the lowliest worker.

Make ‘government unions’ illegal, it’s a perverse concept at best.

slickwillie2001 on July 3, 2010 at 9:25 PM

ELMO Q on July 2, 2010 at 11:27 AM

Arnold can’t run for president, he’s not a natural born US citizen.

All the CA state workers I know are having a cow about this, even though we all know damn well that John Chiang won’t issue the minimum wage checks.

I believe the Controller is elected separately so he’s basically invulnerable to any political pressure from a governor on his way out.

Luffle on July 4, 2010 at 2:25 AM