The California Supreme Court ruled today that furloughs on state employees are not illegal, but that the Governor does not have the power to impose them. This creates a possible window of opportunity for Californians like you to stand up and call to an end of this ridiculous practice.
What? You support the furloughs? Well, read on, dear Sacraggians, maybe I can change your mind with some hard facts.
GAS imposed these furloughs to help save the state money in tough economic times. An analysis was conducted by a non-partisan and neutral economic research firm to see if this goal was being met. Unfortunately, they discovered that the furloughs are actually harming the California economy. As mama stickie says, “We are robbing Peter to pay Paul.”
Each month, they found that the state was saving $125 million in withheld wages, which has averaged out as a 14% pay cut for each worker impacted. These pay cuts result in reduced spending, which has a ripple effect through the economy. When state worker Bob doesn’t buy his daily coffee and bagel, doesn’t go out to lunch or post-work cocktails, and doesn’t perform other incidental spending, this takes money out of the pockets of others. In turn, these others have less money to spend. The end result is a reduction in economic activity of $172 million, a net loss of $47 million each month to California’s economy. Also, the coffeeshop, restaurant and bar owners need fewer employees because their normally bustling business is empty several Fridays each month. California sheds 1,059 jobs each month due to furloughs. We also lose almost $13 million in pure tax revenue each month.
Sacramento and its concentration of state workers is particularly hard hit by furloughs. You don’t need an economist to tell you this, just go outside on a Furlough Friday and see the tumbleweeds rolling through town. Hear that silence? That is the sound of local businesses dying. The Sacramento Metropolitan Statistical Area (MSA, our economic region) of Sac, Yolo, El Dorado and Placer Counties loses $34 million in economic activity, 302 jobs, and $3.5 million in tax revenue each month.
Sacramentans should be screaming bloody murder that our leaders are pretending that furloughs are doing anything to help the budget situation or the California economy. With record unemployment causing unprecedented devastation on our region, the last thing we should be doing is taking money out of the economy and discouraging job growth. I encourage all of you rabble-rousers out there to defend our home turf against ineffective and harmful furloughs. Call up the Governor and demand their end. Call up your legislative leaders and demand the same. Call your Mayor, your City Council and Board of Supervisors and demand that they use their bully pulpit to lobby the state to end this stupid and short-sighted policy that is harming every one of us.
