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Layoffs: Painful but Necessary
Posted 1-31-2004
Layoffs are no fun. Whether
you are the person getting laid off or the person doing the layoff, there is
simply no pleasure in the process. What is currently taking place in county
government is a painful, joyless effort that is nonetheless imperative to us
reining in county payroll expenses.
I have been on both sides of
the experience, so I can relate to the troubled feelings of the laid-off
county employees. Like many others in southwestern Pennsylvania, I am a
former Westinghouse employee. And, like so many former Westinghouse
employees, I was laid off from my job. Near the end of 1990, after nearly
four years of employment with a company that I had hoped to be employed by
for many years, I received a call from my boss and was informed that due to
the loss of a government contract I, along with about 200 other people, was
being let go.
Initially, I was stunned that
the comfort of going to work each day, the security of receiving a paycheck,
and the confidence of "having a job" were all being turned upside down.
Knowing that others were going through it and that the company had lost the
contract that was providing me work did not make it any easier.
What I went through is
similar to what many people in our region who have worked in the private
sector have experienced. In a region that lost 158,000 manufacturing jobs
during the 1980s, I am hardly alone in that experience. However, we are
talking about government now, and you just do not see layoffs happening very
often in the public sector.
I foresaw these layoffs
coming as an eventual consequence of county payroll expense that will never
quit growing. It is not that we have been adding jobs. To the contrary, even
before the layoffs, we had less people working here than we did when I took
office in 1996. We did things like offer an early retirement program in 2001
that saved about $500,000 in payroll costs, and we eliminated 29 jobs under
the commissioners at that time. But, that was a painless experience compared
to layoffs.
You may wonder why, that if I
saw these layoffs coming, I didn't cut jobs earlier. This experience is
painful enough, and we are doing it as a last resort. If we had done so with
a $20 million surplus, we would have been perceived as even more heartless
than we are now by some employees.
The layoffs became inevitable
because we could not continue on the course we were on. We really have been
frugal with management raises in recent years. We froze wages this year,
only gave a 2 percent management raise in 2003, and it has been since the
1990s that we gave management raises greater than 3 percent. That covers
about 25 percent of our employees. The other 75 percent are in bargaining
units, and all but two of those cannot strike, so they go to arbitration. As
I have mentioned before, those arbitrators could care less about your tax
burden, and they never hand out raises lower than four percent. Some are
much higher. I know some people reading this article will say these
employees do not make large amounts of money. Individually, that is true.
But, we must deal with the collective payroll costs, and we cannot look at
each employee's circumstances on an individual basis.
I can only hope that in
future negotiations, the bargaining units understand more thoroughly the
county's financial position. We are in no way "out of the woods" as far as
the county's budget goes. This year's budget will still have a structural
deficit (the difference between revenues and expenses) of about $9 million,
and there is no appetite to raise taxes each year to cover expenses. Tax
increases may happen in the future, but there must be even greater fiscal
restraint in future budgets.
We also need to get our
health insurance costs under control. We have improved our situation by
shopping for less expensive insurance, but all that means is that the costs
go up less quickly; they never go down. Like the private sector, employee
contributions for health insurance premiums are likely in the near future. I
have said for years that our benefit package must mirror that of the people
paying for us to be here.
All this discussion about
employment does not mean we are in any way balancing the budget only through
reducing our payroll. That is not the case. We have reduced contracts, cut
capital expenses, and shopped for better deals in everything from natural
gas prices to vehicles. However, payroll is a big part of the budget and one
that causes the most consternation when cuts are made. We will continue to
make tough decisions that help us rein in expenses, while also allowing us
to fulfill our responsibility to deliver services. There is a cost
associated with running government, and we are mandated to provide virtually
everything we do here, except run the park system. But as managers and
elected officials, we must become more creative and resourceful, and the
answer of, "We can't cut anywhere," just won't cut it! |
