Tough times lead to more worker furloughs – just ask Chicago
Tightening belts this way costs businesses and government less than layoffs. But it’s tough on families.
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Unions in both Hawaii and California have filed legal challenges to the furloughs. In the case of Hawaii, the four public workers' unions argued that the state constitution requires bargaining over anything related to pay and wages. The governor, Linda Lingle (R), had imposed furloughs for three days a month on all but "essential workers" to try to help reduce a massive budget deficit.Skip to next paragraph
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So far, the unions have won the battle in court but offered to take a 5 percent temporary salary reduction. At least one of the unions, the AFSCME local, says it could live with a negotiated temporary furlough compared with an across-the-board pay cut. The negotiations are ongoing, but the governor has announced the layoff of 1,100 unionized workers.
Governor Lingle herself and her cabinet are taking a two-day-a-month furlough, and 900 nonunion state workers will begin three-days-a-month furloughs starting Sept. 1. "My cabinet, the lieutenant governor, and I firmly believe closing the state's unprecedented budget shortfall requires a shared sacrifice," she said in a statement.
But the unions want the public to know there will be ramifications for the furloughs. For example, in California, where most state workers are furloughed three days a month, the Department of Motor Vehicles (DMV) closes its doors three Fridays a month. Wait times at the DMV have ballooned from 30 minutes to as long as two hours, says one employee. "This is not like a business where you have fewer customers," says SEIU's Mr. Zamora.
Furloughs are also causing suffering for state workers on tight budgets. That would be the case for Ed Wellington, a Napa Valley computer technician and disabled vet who works at a state veterans' facility. Mr. Wellington and his wife, who also works for the state, have each lost 14 percent of their pay. With three children, including a daughter in college, it is a pay cut he didn't need.
"Right now our family is losing our home, which has been foreclosed," says Wellington, who has also received notice his job is being eliminated.
Another state employee, John Krumm, who works at the DMV, used to volunteer at a food bank. Now, once a week, he collects food there himself. "It helps to make ends meet," he says. Mr. Krumm, estimates he will lose close to $450 a month in pay.
"It used to be money to go to a movie and a night out, but that won't happen now," he says.
Even relatively well-paid workers who have been furloughed say it affects them. In January, the state of Arizona, facing declining revenues, sliced the money it gave to Arizona State University. To save $24 million, for the first six months of this year all 12,000 employees were furloughed anywhere from 10 to 15 days, depending on their status.
One was Dennis Hoffman, an economics professor, who saw a 10 percent reduction in his paycheck every two weeks. "It was painful," says Dr. Hoffman, noting that the belt-tightening meant he did not renovate his weekend home as planned. "We were watching our pennies every little bit."
Sometimes, reducing an employee's hours is still not enough to help the organization. This past January, Katie Corrigan, an executive recruiter in Boston, saw her hours reduced by 50 percent. She was optimistic she would get back to full-time work once the economy improved. But in February, she was permanently laid off.
"They keep in touch and still hope to hire me back," she says. In the meantime, she's trying to make ends meet as an interior decorator.
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