Thursday, July 31, 2008

Governer Cuts State Worker Pay; Nobody Cares


The Governator signed an executive order cutting the pay of 200,000 state workers to $6.55/hour.

IT IS FURTHER ORDERED that the Director of the Department of Finance and Director of the Department of Personnel Administration shall work with the State Controller to develop and implement the necessary mechanisms, including but not limited to pay letters and computer programs, to comply with the California Supreme Court's White v. Davis opinion to pay federal minimum wage to those nonexempt FLSA employees who did not work any overtime.
As you can see by the overwhelming media presence outside the Capitol, there is huge public interest in this story:



11 comments :

Anonymous said...

Apparently by the number of comments, few really do care. The funny part is even after the cuts, there is still about a $7Billion dollar deficit.

Max said...

Pretty funny, huh? The LA Times didn't even have a story on it until the thing was actually signed.

I live and work inside the bubble, but I travel enough to know how non-Sacramento people think about "state workers." When your only interaction with the State is when you pay taxes, get a ticket, or go to the DMV, it's hard to care when salaries are cut.

Anonymous said...

Finally, getting paid the correct amount for the value added!

westparker said...

From sacramento landing
"The union representing the Stockton Police Department's rank and file has filed a claim against the city, saying a 9.5 percent raise budgeted by the city is not enough under the terms of a 2005 agreement.
...
The pay increase the police union says it is owed could trouble a city budget already beleaguered by the collapse of the housing market and the inability of flattening sales and property tax revenue to offset rising costs."

This is why we're in trouble. 10% raises in a depression, are you kidding? Want to solve the state's problems, 50% pay cuts for Cops, Fire and Teachers. Cops and fire make 50K a year, teachers make 35K.

Anonymous said...

I don't mean to be a stick in the mud, but it may be that you then wouldn't have people willing to work those jobs. Even at current levels, you often get substandard folks...

Anonymous said...

"I don't mean to be a stick in the mud, but it may be that you then wouldn't have people willing to work those jobs. Even at current levels, you often get substandard folks..."

Ever hear of a volunteer fire department....

Darth Toll said...

This seems like a political stunt to me. There would be a lot more outcry if there wasn't a provision in the order to pay back "lost" wages once an agreement with the legislature is reached. Far more deadly is the temp worker layoff, and this is getting downplayed in the press.

Still, the state is in big trouble with deficits and something many times this size will have to be implemented soon to correct the imbalance. I doubt taxes could be raised a lot to cover the shortfall without huge economic impacts - the economic impacts of the layoffs will be severe enough.

A wave of layoffs doesn't bode well for Sac RE prices, needless to say.

DrDoom said...

Alt-A vs Sub-Prime

Sorry to hear about agentbubble's employment change. Will we still see posts and comments in a different form?

I know I am off thread here but we don't seem to be spending much time on "Sacramento Real Estate Statistics". Not like we used to. I am already nostolgic for the "old days". For some reason more postings are touchy-feely.

To answer my own question from a few posts ago you can get Alt-A compared to Sub-Prime information for California from the NY Fed (go figure). Here is a cute map.

http://www.newyorkfed.org/regional/subprime.html

I found the NY Fed link from bubbleinfo.com down in San Deigo

http://www.bubbleinfo.com/journal/2008/6/25/data-on-subprime-and-alt-a.html

Conclusion...assuming resets are the big factor, the California sub-prime train wreck is only 1/4 completed. Most is yet to pile in. Alt-A is of unknown total impact (FICA 709 compared to 640 only 1/2 as many lates) and does not hit California hard until 2 years from now. Alt-A is almost twice the size of sub-prime (721k compared to 489k).

Max said...

Sorry to hear about agentbubble's employment change. Will we still see posts and comments in a different form?

Oh, AB didn't work there (that I know of), I think he's just busy with other things. Maybe I'll bug him this weekend to see if we can get a July sales preview. (hint hint:)

I know I am off thread here but we don't seem to be spending much time on "Sacramento Real Estate Statistics". Not like we used to. I am already nostolgic for the "old days". For some reason more postings are touchy-feely.

Well, I've got to do something to fill the time during the week. :)

Seriously, the crisis is moving away from purely one of data asymmetry (only Realtors knowing the true market conditions, thus allowing them to lead borrowers down the wrong path) to one where politics and policy will determine the outcome. It makes the outcomes hard to predict, to say nothing about timing. Here's a rundown of what the blogs have accurately predicted or called so far:

1. The housing bubble's existence.
2. The bubble's peak.
3. The bubble's end.
4. Builder dominance in the overall market.
5. Builder capitulation/demise of the new house market.
6. Demise of the subprime borrower.
7. Rise of foreclosures.
8. REO/bank dominance in the resale market.

The next dominoes:

9. Shadow inventory revelations.
10. Demise of the ALT-A borrower.
11. Bank capitulation.

The timing is now impossible to gauge, since the Fed and the government are now active market participants. All I can do is keep reporting stats, and stay informed as best as I can.

And make the occasional snarky post during the week if I feel like it. :) The only thing that will get us through this is a sense of humor.

DrDoom said...

Max:

Thanks. Your hit list and reasoning gets me oriented. Big help. Serious on the weekends, snarky during the week :).

Glad to see Alt-A is on the coming list because that looks like it will be big and long.

You got graph?

Patient Renter said...

Max is right about the market being unpredictable now with political/government influences, but I think there are a few other factors now effecting things that weren't part of the orignal pure housing related bubble: recession and unemployment.

Even without a recession or rising unemployment, the housing crash was destined to play out, but now that other economic factors are in play, the course of housing will be effected. Regardless of where the housing bottom should be, things change during recessionary times.