(HOST) Commentator Tim McQuiston observes that for those of us who have lived through many recessions, this downturn feels quite a bit different – perhaps more like the end of an era – or maybe several eras.
(MCQUISTON) The entire financial services industry, from banks to Wall Street, is changing. Media, automotive, energy, telecommunications and retail are also changing and will look very different on the other end. Of course, what form those vital industries will take in the future is still unclear. And we can’t predict when that end will come. But if it’s any solace, it will come eventually.
Another huge industry in transition is government. Government and health care have been reliable growth industries over the last decade, just as other industries have waned.
And now Governor Douglas and the state’s unionized workers are confronting the future of the state’s workforce. There are around 84 hundred state employees. The Douglas administration says it needs to trim 17 million dollars from the state’s payroll as part of its massive effort to balance the budget. One way to do that, Douglas said in January, is to lay off 600 or more state workers.
To put that number in perspective, consider that there are only 19 private, for-profit employers in the state with that many workers. Two of those are grocery store chains. It’s fair to say that the state pays better than a supermarket. It’s also safe to say that a Green Mountain Coffee Roasters or a Stowe Mountain Resort closing its doors and forcing that many people out of work would be pretty devastating.
Because of the union collective bargaining process, Douglas can’t just reduce pay levels or change benefit packages to cut costs; he can only cut people.
The union has already offered a plan that could reduce costs in the near term by 20 million dollars – giving up pay raises, taking short-term furloughs, and reducing travel costs as well as other expenses and benefits.
But Douglas insists that the savings can’t be for just one year, they have to be sustainable. So the governor has made a counter proposal which would cut the pay of unionized workers by 5 percent and increase a worker’s contribution to the health plan from 20 to 30 percent. Otherwise, the state will lay off more than 300 workers right away, most of them unionized. The state has already worked up a list of what positions to eliminate.
For now, the union is balking at that offer. But turning it down could be a serious mistake – since I don’t think the governor is bluffing.
There is also the public relations problem. Workers giving up raises and having a week off work without pay is not nearly the same price to pay as losing a job altogether. A lot of people are suffering.
And I’m afraid that taxpayers will have little sympathy for the state Workers if they take a hard-line stand. The rest of us are trying to find a way. They can too.