California Showdown - Court sides with Schwarzenegger on minimum wage; L.A. council Fires 232 Workers; Illinois Stops Paying Bills Keeps Digging Holes

Fortunately a California appellate court came down in favor of sanity and sided with the governor when Schwarzenegger Ordered 200,000 State Workers be Paid Minimum Wage until a budget was passed.

Please consider Court sides with Schwarzenegger on minimum wage

A state appellate court on Friday sided with the Schwarzenegger administration in its attempt to temporarily impose the federal minimum wage on tens of thousands of state workers.

It was not immediately clear how the ruling would affect Gov. Arnold Schwarzenegger's order a day earlier to pay 200,000 state workers the federal minimum of $7.25 an hour as the state wrestles with a budget crisis.

The state controller, who cuts state paychecks, has refused to comply with the order. Friday's ruling affirms a lower-court decision in favor of the administration in a lawsuit filed two years ago after the governor's first attempt to impose the minimum wage.

The latest ruling from the California 3rd District Court of Appeal in Sacramento concludes that state Controller John Chiang cannot ignore the minimum wage order from the state Department of Personnel Administration.

But Chiang said in a news release that he interpreted the court ruling to mean that his office would not have to comply with the executive order if it was practically infeasible to do so.

Schwarzenegger's minimum wage order will not affect all of California's 250,000 government employees. The 37,000 state workers represented by unions that recently negotiated new contracts with the administration will continue to receive their full pay. The contracts, including one with California Highway Patrol officers, contain pay cuts and pension reforms.

Salaried managers who are not paid on an hourly basis would see their pay cut to $455 a week. Doctors and lawyers who work for the state will not be paid at all until a budget is signed because minimum wage laws do not apply to those professions.

Schwarzenegger is pushing for minimum wage based on a 2003 California Supreme Court ruling. In White vs. Davis, the court held that state employees do not have the right to their full salaries if a state budget has not been enacted. At the same time, the state cannot ignore federal wage laws.

Chiang has maintained that the minimum wage order is illegal, even in the face of court decisions indicating the opposite.

He has taken in more than $190,000 in campaign contributions from labor groups representing state employees and other unionized workers so far in his 2010 re-election bid. Those donations accounted for about 22 percent of all his contributions, according to campaign reports through May 22.

Chiang also has said California's computerized payroll system cannot handle the change, specifically because it cannot cut some checks at full pay and others at minimum wage.

Chiang's payroll claims seem a bit far fetched. However, we are talking about government systems and California on top of that, so I suppose a payroll system could be that pathetic, but right now I have my doubts.

L.A. council turns back last-minute plan to delay layoffs

Please consider L.A. council turns back last-minute plan to delay layoffs

Union leaders are angry over the decision, which means that 232 workers, mostly in the library department and the city's child care centers, will lose their jobs with the start of the new fiscal year.

One day before an estimated 232 employees at Los Angeles City Hall were slated to be laid off, the City Council on Wednesday turned back a last-minute proposal to delay the cuts for three months.

With scores of employees scheduled to lose their jobs at 12:01 a.m. Thursday, the council fell two votes short of the 10 votes needed to reverse course. The vote was 8 to 4, with council members Bernard C. Parks, Jan Perry, Greig Smith and Dennis Zine opposing a new discussion of the cuts.

Opponents of Thursday's layoffs, which coincide with the start of a new fiscal year, contend they will cost the city $3 million more than they will save in salaries. Under its salary agreement with the Coalition of L.A. City Unions, the moment a single member is pushed out, the city must pay an estimated $27 million in raises to coalition members who remain on the payroll.

Matt Szabo, deputy chief of staff to Mayor Antonio Villaraigosa, said those numbers are accurate but predicted there probably would be more salary savings in the coming months after a second round of layoffs occur.

To Hell with the Union Leader

Union leaders are pissed but so what?

By the way, what kind of administrative idiot would approve a contract whereby "the moment a single member is pushed out, the city must pay an estimated $27 million in raises to coalition members who remain on the payroll."

That is water over the dam right now and thus the correct decision is to fire as many as it takes to make up for the lost $27 million. Hell, The correct policy decision is actually to fire every one of them and outsource every job to the low bidder.

Showdown in California - Court sides with Schwarzenegger on minimum wage; L.A. council Fires 232 Workers; Illinois Stops Paying Bills and Keeps Digging Holes

Illinois Stops Paying Bills

I have said this before but by now it should be obvious to nearly anyone. Illinois is insolvent. Yet it keeps making promises, especially to unions that it has no way of keeping.

The New York Times reports on this sad state of affairs in Illinois Stops Paying Its Bills, but Can’t Stop Digging Hole

Even by the standards of this deficit-ridden state, Illinois’s comptroller, Daniel W. Hynes, faces an ugly balance sheet. Precisely how ugly becomes clear when he beckons you into his office to examine his daily briefing memo.

He picks the papers off his desk and points to a figure in red: $5.01 billion.

“This is what the state owes right now to schools, rehabilitation centers, child care, the state university — and it’s getting worse every single day,” he says in his downtown office.

Mr. Hynes shakes his head. “This is not some esoteric budget issue; we are not paying bills for absolutely essential services,” he says. “That is obscene.”

Then there is the spectacularly mismanaged pension system, which is at least 50 percent underfunded and, analysts warn, could push Illinois into insolvency if the economy fails to pick up.

Public colleges and universities occupy a fiscal sickbed all their own. This year they muddled through without $668 million expected from the state; the University of Illinois has yet to receive 45 percent of its state appropriation. Legislators made no pretense of promising to pay this bill soon. Instead they authorized colleges to borrow against the expected state payments.

Legislators this year raised the retirement age and slashed benefits. Though changes apply only to future employees, the legislature claimed immediate savings.

“Savings upfront and reforms down the road,” said Mr. Hynes, the state comptroller. “It’s just bad habits and bad practices.”

There is much more in the three page Times article. Disgusted minds prepared to be even more disgusted will want to give it a look.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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