Major clashes are breaking out between public-sector unions and state and local governments seeking to steady their wobbly books by scaling back employee benefits, pitting labor’s political clout against lawmakers eager to avoid raising taxes or cutting programs.
From New York to California, state capitals and city halls facing huge budget deficits are fighting with unions to slash costs through pension cuts or freezes and worker furloughs and by renegotiating contracts with unions that represent civil servants, teachers, police, firefighters and other public servants.
“A lot of state and city governments’ backs are against the wall; they can’t go on borrowing forever like the federal government,” said Chris Edwards, the director of tax-policy studies at the Cato Institute, a free-market think tank.
“It’s a giant battle, and these are only the opening salvos.”
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California may end up lowering state workers pay to minimum wage, they can easily do this as there are no other jobs available. The Governor knows this and used it as a threat, but it looks like foresight of the inevitable.