Police, Firefighters Get Minimum Wage

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This is from a small town (population ~60,000) in Pennsylvania about 20 miles from where I grew up. Short version: The city is running out of money, and to help curb costs, the mayor announced that city workers (including people like police are firefighters) are getting their salaries slashed to the federal minimum of $7.25 per hour. (I wonder if that counts his salary too?)

While it sounds like a fantastic means of cutting costs, I can't believe it is legal. Many of the people on the city's payroll are probably reliant on that paycheck to support their families, and cutting it to a fraction of what it was previously would put many people in financial dire straits. These workers are also unioized, meaning their pay was probably collectively bargained, and I imagine it was at a signficantly higher salary than minimum wage.

Full Story.

 

OTOH, chances are when the mayor comes up for re-election, his new salary will be $0.

 

No, I don't think the number of people directly impacted by the decision will swing the election, but if the city is in that bad of shape economically, it may signal to the electorate that a change in leadership is needed. OTOH, I can't possibly believe that the mayor would be naive enough to think that this little stunt of his would fly, so perhaps this was a calculated decision. I haven't lived in that area for about 15 years now, so I can't comment specifically on the local perception of this.

 

I thought they enjoyed a nice boon from The Office. ?

 

While I don't know anything about this exact situation, it is an interesting dilemma which I have a feeling we are going to see more and more (especially in Democrat controlled cities). The spigot of unlimited cash has been shut off. Municipalities that can't get their spending under control are going to be facing bankruptcy which will then have a ripple effect in the financial markets.

 

Minimum wage for jobs where you can potentially get killed, and that serve a social need? Give me a break. I'd immediately quit and go work at mcdonalds or something. Unless these workers were the cause of the budget crisis it doesn't seem right that they should have to bear the brunt of it. Pay cuts are fine if they are needed and part of a larger strategy, but just sticking it to workers like that really ticks me off. Although, in all fairness, the mayor did have other policies in mind that were rejected, such as increasing property taxes, so I can't blame him too much.

 

You're right about that. I think it goes without saying that the value that police bring is higher than minimum wage. I wonder how long Scranton would last without them...

 

Well, I did ask around about this situation and got some more information. Evidently, there was one set of paychecks that went out when everyone got minimum wage. It was to the point where the city did not have the funds on hand to give everyone their normal pay. That the city paychecks would effectively bounce upon being deposited.

The mayor stated that he does not have the authority to raise taxes on command, he cannot simply raise the debt ceiling like Congress can, and that the city had maxed out its credit and couldn't get any additional loans.

So back they went again looking for loans. Eventually, they found a bank that would float them through to rest of the year, contingent upon the city being able to show a new revenue stream starting in 2013. (Basically the bank said, "We'll loan you the money if you can prove to use you'll have the means of paying us back.") The city council approved a property tax increase of 87% (YIKES!) in the city, and the loan was approved.

The city also put in place a salary freeze to all city workers (so you keep getting paid what you're used to, but there will be no raises in the foreseeable future), and will attempt to pare down the city workforce through attrition, only replacing completely necessary positions as people employed by the city leave (either to other jobs or through retirement).

But the basic solution to the problem was, "Property owners, bend over!"

 

Kinda makes you want to move to Canada before we get a "solution" to our national debt.

 

They would probably just move to county sheriff services. That's what a lot of cash-strapped cities do. Apparently it's more affordable, if less desirable.

 

In Maryland, nearly all police forces are county run. AFAIK, the only city in all of Maryland that has it's own police force is Baltimore. There is also a Baltimore County Police force, distinct from Baltimore City Police force. Believe it or not, Baltimore City is not part of Baltimore County. Baltimore is not in any county. It's one of the few, if not the only, incorporated cities in the state, although I am not sure about Annapolis.

 

Ah, yes. Let's forget about the deficits of Reagan and Bush while conveniently ignoring the surpluses of the Clinton administration.

Neither political party has cornered the market on fiscal irresponsibility. Republicans and Democrats should be likened to the old married couple who goes to Best Buy with $1,000 between them to make a purchase, but with very different priorities. John wants a gaming PC that they can't afford, and Sally wants a Big Screen TV that they can't afford. Unable to agree on which item to purchase, John and Sally compromise by taking out a $3000 credit line that they really can't afford, in order to buy both the TV and the PC. This is how deficits happen, and Republicans are every bit as guilty of this as Democrats.

 

Sorry Drew, but exactly what city was it that Reagan, Bush, and Clinton were in charge of that either is going bankrupt or running a surplus? You must be watching the convention as you appear to be in full defensive/blame mode

Seriously though, this is a major problem and unfortunately for you (as a Dem) it is way more of a Democrat probelm than a GOP problem. Unlike the federal government, which can just print money or borrow unlimited funds (Yay, Obama) cities and states don't have that ability. The major urban areas which are almost exclusively under Democrat control have done nothing but borrow money, spend it, and sign contracts with labor unions/employees for things that they cannot afford. Now the banks and the municipal bond markets are a little (meaning majorly) concerned about the ability of them to pay them back. Therefore it is becoming almost impossible for them to borrow additional funds.


I think this is going to get very interesting, as the cities are really going to have no choice, but to default on many things. I think it is going to become commonplace for cities to have to severly cut back on services and ignore their union contracts. Then the courts are going to get involved and even though the residents and employees are correct, courts do not have the ability to sieze money from cities that do not have any.

This is my opinion, of course, but I have a feeling the municipal problem will end up making the housing crisis seem like no big deal. Hopefully, this will teach people that the economy and fiscal responsibility should be the primary responsibility of politicians and all of the touchy/feely social issues should come in a very distant second.

 

Snook, it's not like all the Republican controlled states have great economic numbers either. In fact, you look at tables that evaluate metropolitan economic numbers - here's a decent place to start - you'll find that there are both very good and very poor performing places under both Democrat and Republican control.

If you look at the Democratic side - metropolitan areas in Maryland and northern Virginia are doing great, while pracitcally the entire states of Michigan and Illinois are in the dumps. Democratic legislatures have some of the best AND worst performances in the nation.

It's much the same with Republicans. Both North and South Dakota - not just the cities, but the whole states - have the lowest unemployment rates in the nation. That, of course is driven by the recent oil boom there, but you can't argue that the Republicans run those states. On the flip side of that coin, places like Alabama, Mississippi, West Virginia, South Carolina and Kentucky don't have a positive number to be found in the economic indicies.

So I think you are presenting a false dichotomy. It seems the economic recovery isn't based on WHO is in charge of the legislature, but rather the opportunities present in the state. Of coure Maryland and Northern Virginia are doing great - they have the many employment opportunities with the federal government. Of course the Dakotas are doing great - they found out they're sitting on top of billions of barrells of oil. And the reverse is also true. Democratic run Detroit is probably the economically worst performing city in the naion, but the entire states of West Virginia, Kentucky and Mississippi are in the dumps.

There are also a few factors at work in Scranton that you can't possibly be aware of not being from that area as I am. All the cities in the northeastern part of PA are old coal mining towns. Practically every person in that area has a parent or grandparent who was a coal miner (including myself). The mines closed in the 1960s when they breached the river and flooded the mines. The population has been falling steadily ever since. Scranton - and many other cities in the region are faced with a shrinking tax base and a large elderly population. Every year more people die than are born, more people move out than move in, and more people retire than enter the workforce. No wonder things suck there. (I'm a case in point. I didn't have a burning desire to move from the area where I grew up - but good luck finding a job there.)

 

The higher level the politics get, the more clear the differences between democrats and republicans become, and for a very simple reason -- the stakes are higher. What happens in the federal government happens at every level of government -- just on a smaller scale. Examining presidential politics is highly instructive when trying to understand the differences between how each party prefers to govern.

Republicans generally have no problem slashing revenue (ie reducing taxes), and have no problem cutting government programs, including reducing the size of the Federal safety net and employing deficit spending, to facilitate it. They feel that a smaller, more efficient government is better for everyone in the long run. Democrats generally have no problem expanding the scope of government, and have no issues with raising the revenue to get it. They have shown themselves to be substantially less comfortable with deficit spending, preferring to raise taxes to cover shortfalls where it is possible.

I would be lying if I said that I think these approaches to governance are equally valid, but I will attest to the fact that when Democrats and Republicans compromise like that old married couple at Best Buy, by expanding the scope of government and simultaneously decreasing revenue, the results are disastrous. Either approach on its own works better than the worst parts of both at the same time.