Scranton Mayor Slashes Pay For All City Employees to Minimum Wage – Austerity Comes to America
This is a story that came out today on Yahoo about the city of Scranton, PA taking drastic measures to deal with their budget crisis. The article describes how the mayor slashed everyone’s pay down to minimum wage, perhaps illegally, in order to keep the town something resembling solvent. According to the article, Scranton has a $16.8 million budget deficit with only $133,000 in cash on hand and $3.4 million in vendor bills (i.e. health insurance and such).
I feel for the city employees – building your life around getting a decent paycheck every week and then suddenly being expected to do the same amount of work for a poverty level paycheck has to be a real kick to the teeth. I’m sure everyone thinks the mayor is an asshole too, but I know that was not an easy call to make. The bottom line is that there’s essentially no money, not enough revenue coming in and someone is going to have to swallow it.
Scranton isn’t the only city in the US facing these problems by any means, but as far as I know it’s the only one of any notable size that has taken these kinds of drastic measures in the midst of a budget crisis to date. There have been many municipal layoffs, cutbacks, reduced hours and overtime and wage freezes, but I can’t recall hearing of an across-the-board wage cutting like this.
The thing that really scares me about this news story is that Scranton’s situation isn’t unique and many other city, county and state governments around the country are in equally dire straits. So who is going to come to the rescue? The county that Scranton is in is probably broke too. Scranton isn’t the only city in Pennsylvania facing hard times and if the state comes to the rescue, they’ll probably have to step in for the other cities facing a budget crisis. If other cities in Pennsylvania are facing budget crises, the state as a whole is probably behind the 8 ball as well and would have to look to the federal government for assistance. If the federal government helps out Pennsylvania, they’re going to have to help out Michigan, New York, Illinois, California and every other state facing a local crisis. In case you haven’t heard, the federal government isn’t looking so hot either right now in this department. I fear that right now we could be at the verge of a major economic disaster that will start from the lowest levels of government and work all the way up to the top.
The difference between the federal government and state and local governments is that the federal government can print money to meet its obligations. Local governments have to raise taxes, attract new sources of tax revenue or issue bonds if revenue falls short. Since the economy tanking and the housing crash, there’s been less money for local governments to take. An increase in foreclosures and lower property values mean lower property tax revenues. They can raise taxes, but many people and businesses (especially the successful ones with more to lose) may move to greener pastures, having an overall negative effect on revenue. You can issue bonds, but people have to want to take the risk and buy them. If they don’t, you have to raise the interest in order to attract the investors. At some point, the city is responsible for paying back the bondholders more than they borrowed and there’s no guarantee that things will be rosy and the money will be flowing in the future. In other words, the federal government has more tricks up their sleeve to deal with budget shortfalls than local governments.
This will undoubtedly mean a sharp decline in services for the people of Scranton and the people of any other municipality facing a similar dilemma. Many cities are laying off police officers and at least in theory Scranton is keeping the same amount of officers on hand, but it’s likely that police officers will seek new lines of work, jobs with different departments and become more cynical about their work. I think most police officers have a genuine desire to keep the citizens of their city safe and fight crime, but I can see a police officer who just had his wage cut by more than half becoming apathetic to petty crime. So someone broke into your garage and stole some tools? Yeah, sure, they’ll get right on it. When criminals know they have a better chance of getting away with crime, they’ll do it. When committing petty crimes becomes less risky, more marginal people will get knocked off the fence and crime will become more alluring.
We can debate whether or not this is the smartest solution, but ultimately it looks like we can expect to see more of this throughout the country and there’s probably not anyone coming on a white horse to save some of these cities.
Ok, now let’s talk about how to deal with this situation:
– Since the quality of policing will likely go down, it’s a good idea to take home security precautions like good lighting, good locks, cutting back shrubbery that could give criminals a place to hide, securing easily accessible windows and making it look like you’re home when you’re not just to name a few general ones.
– Being armed and knowing what you’re doing to include lethal and non-lethal weapons. If someone’s coming in and the cops can’t be there in the next 10 seconds to save your ass, it’s in your best interest to do it yourself. Know and abide by your local laws on this subject as well.
– It pays to be in as good of health as possible if facilities and ambulance services have declined. Actually, it pays to be in good health even if they could beam you up into the finest hospital in the world at the drop of a dime. Learn basic first aid (or even more advanced!), it might come in handy someday while you’re waiting for an ambulance.
– Know your neighbors and look out for each other. Although the neighborhood watch concept may have taken a bit of a hit with the recent Zimmerman/Martin incident, it’s a good idea to be vigilant and look out for your neighbors and have them do the same for you.
– If you’re someplace really precarious, you can always jump ship and go somewhere else. It would probably be easier to sell your home sooner rather than later if the municipal debt crisis kicks off. Some parts of the country (and probably even within your state or county) are better off than others.
– If you think your job, wage and benefits are secure, so did the employees of the city of Scranton. A legal agreement can bind one party to pay another, but a legal agreement can’t magically fill the payer’s pocket full of money for the payee. The employees can take the city to court, but if there’s no money there still going to end up with bloodless turnip for dinner that night.
I’d like to believe that this is just a fluke and a temporary glitch, but I think we’re all going to have to start making due with less. Hopefully the employees of the city of Scranton were able to prepare themselves financially for this kind of situation and hopefully some sort of normalcy is reached soon.