Posted by Edward Ring at 4:24 pm on May 12, 2015 Comments Off on How California’s State and Local Governments Can Save $50 Billion Per Year
Back in the early 2000’s, in the aftermath of the internet
bubble’s collapse, California’s state and local governments endured
a period of austerity that resulted in “furloughs,” where,
typically, employees would take Friday’soff in exchange for a
20% cut in their pay. That is, they worked 20% less, and made 20%
less in pay – but theirrateof pay was not
cut.
This display of “sacrifice” was an eye opener for private sector
workers, especially salaried employees of small businesses, who
endured cuts to their rates of pay at the same time as their hours
of work increased. Most people in the private sector back in the
early 2000’s felt lucky to have a job, even if it meant working
harder and making less.
There’s a lesson to be learned from the period of state and
local government “furloughs” in California: California’s
government functioned just fine with 20% fewer hours spent at the
job, overall, and California’s government workers got by, overall,
making 20% less money. So since we know these cuts
arefeasible, it isinteresting to estimate just how much
money Californians would save, if there were a 20% reduction to… Read More