Two days a month
The cascading effect of the state-worker furloughs
It probably seemed like a good idea: Furlough state workers twice a month to save money during the budget crisis. It’s better to lose some pay than to lose one’s job, right?
That’s an easier statement to make when you’re not the one who is actually losing real, honest-to-gosh money, or the person who has to complete the same amount of work in less time—and for less pay—in order to keep the state running smoothly.
We all—businesses and individuals—rely on those state workers to provide the information, permits, licenses, inspections and decisions we need to do business. The two-days-a-month furlough plan takes away 10 percent of our access to state offices. But the overlooked economic toll is a big one, and it happens to people who work in an already devastated sector of the economy.
One of the first things that most of those state workers did—with the exception of those at the low end of the pay scale, who already were bringing their lunches every day—was cut back on eating lunch at local restaurants. It’s a luxury, and luxuries go first.
Because state workers have a whole lot of necessities to pay for, they didn’t make a 10 percent spending reduction across the board. Instead, they prioritized. That means that they cut more than 10 percent from their restaurant budget in order to spare the budget sections that cover orthodontists, groceries, shoes for the kids, the mortgage.
According to my friend José, who owns a small Mexican place near downtown, when word of the furloughs got out, his lunch business dropped 20 percent immediately. Those state workers are smart, and they’re not going to wait until the last minute to start covering their expenses.
Those losses in revenue forced José to lay off one of his waitresses last week. It’s reasonable to guess that she’ll be spending less locally, too.
It’s not just José’s restaurant. Every restaurant that relies on lunch business in the downtown and Midtown area is affected by state workers’ cutbacks, which also means that the grocery and produce suppliers, the people who clean the floor mats and the guys who do the windows are all going to have less money coming in. They may lay off some people, too.
Our economy is a complicated, interdependent web. When one sector crashes, it has a cascade effect on every sector down the line. Some get hit harder and faster, but sooner or later, everybody feels it.
The solution is most definitely not for government to stop spending. If ever there was a situation in which government spending was called for, this is it. As our new president pointed out recently in a timely bit of plain-speaking, spending is stimulus.
And those closed state office buildings? They’re going to result in closed businesses, which won’t provide jobs, generate growth or pay taxes. State workers may have jobs (albeit with 10 percent less pay), but there are a lot of other people in Sacramento who won’t.