Lay offs or pay cuts

The legislature is mulling over the idea of reducing spending on state employees, either by cutting pay by 10%, or by cutting 10% of the work force

If those are the choices, I think the 10% lay off is the way to go. If pay is cut 10%, morale will plummet. State workers are already about 15% behind their private sector counterparts. Butch Otter was proposing 3-4 years of 5% raises just to get state workers even. They got about that one year, and will not get raises this fiscal year. So cutting salaries will widen the wage gap.

It also seems likely that the pay cut will be permanent. Do you think that in a couple of years the state will fund a 10% raise for all employees? That would be unprecedented.

Given that, and given the low morale, as soon as things turn around employees will leave the state jobs in droves. And of course, the best workers will be the ones getting hired in the private sector.

Note that the benefits package has already been cut back in accord with the Governor's idea that state workers ought to be compensated like the private sector. The benefits were higher than the private sector, so cut them back while raising salaries. A pay cut will be a double whammy.

It seems somewhat unfair as well. The higher paid workers will take larger cuts. A person making $50,000 a year will get a $5,000 pay cut. A $25,00o/year worker will only get a $2,500 cut.

As I've written before, reducing state employee pay, while expecting them to do the same work, places the burden on the employee while shielding the citizenry from the problem. If citizens want the state service, they ought to have to pay for it, through taxes.

I say cut 10% of the work force. The folks left will at least know their jobs are safe.