Governor Threatens Federal Minimum Wage

In an effort to save the state of California money, Governor Schwarzenegger has indicated that will sign an Executive Order that would call for all state government workers to be paid the federal minimum wage ($6.55/hour as of today) rate until a budget agreement is reached between the Democrats and Republicans. Why not at least the California minimum wage rate of 8.00 per hour?

Evidently a 2003 ruling made by the California Supreme Court allows him to do pay workers the federal minimum wage until a state budget is passed.

From the Sacramento Bee:

He [Governor Schwarzenegger] says that his action complies with a 2003 ruling by the California Supreme Court that made clear that without a state budget in place, federal labor laws require the state to pay most workers “either federal minimum wage or, for those employees that work overtime, their full salaries.” The order would require state agencies to stop authorizing overtime for most employees.

The Order also calls for an additional 20,000 or so part-time workers would be laid off.

Needless to say, not very many people are happy about this idea. Even some on the inside.

From the San Jose Mercury News:

State Controller John Chiang, whose office pays state employees, criticized Schwarzenegger’s threat as a political ploy that could end up costing the state even more in litigation fees.

“Forcing public servants to involuntarily loan the state cash by foregoing their hard-earned paychecks puts an untenable burden on our teachers, health care workers and those who provide critical public services,” Chiang said in a statement.

“Cutting workers’ salaries will do nothing meaningful to improve our cash position or help us make our priority payments.”

Mr. Chiang has indicated that he will not comply with the Governor’s order should it pass.

This really has stirred the waters. The concern is being voiced statewide. And the unions are speaking up.

From the LA Times:

“The governor is turning a budget crisis into a catastrophe,” said Yvonne Walker, president of Service Employees International Union Local 1000, which represents 95,000 state workers. “How can you tell people, ‘We will just pay you this amount and you can catch up later?’

“We are in the middle of a housing crisis, and people are losing their mortgages,” she said. “Are they going to issue a notice to mortgage companies that employees will just catch up later?”

Walker said she believed the governor’s plan was illegal, and union attorneys are already drafting a lawsuit to file if the order is signed.

One can only hope that a budget is reached sooner rather than later. This is not a good time to be reducing anyone’s salary.

You can find a copy of the Executive Order in question right here.

Update: SFGate has a good breakdown of the employees who would be affected by this change.

Update 2: Hurry up and wait. The Order has been delayed until Thursday.