What the reduction of California’s minimum wage means
It seems that some of my predictions I wrote about in my book “It’s Your Money” are now coming true. Governor Arnold Schwarzenegger of California using the premise that the State’s elected officials cannot agree on a budget issued an executive order S-09-08 that not only reduces the State’s minimum wage to the lower federal level but he suspended or canceled many other state payments to vendors and organizations and has ordered the layoff or termination of non-essential employees and has frozen practically all hiring and promotions. “All State agencies and departments under my direct executive authority take immediate action to terminate the services of the following five categories of employees and individuals effective July 31, 2008: (1) Retired Annuitants; (2) Permanent Intermittent Employees; (3) Seasonal Employees; (4) Temporary Help Workers; and (5) Student Assistants.”
The argument is that as a result of the late budget, there is a real and substantial risk that the State will have insufficient cash to pay for State expenditures. “IT IS FURTHER ORDERED that this Order shall remain in effect until such time as both a Fiscal Year 2008-09 Budget is adopted and the Director of the Department of Finance confirms an adequate cash balance exists to meet the State’s fiscal obligations.”
Noticed there was no mention of reduction of income for the elected officials while they argue and posture and create what must be mayhem for the citizens in the State of California. I’m expecting to see this type of executive order at the federal level once the federal government is forced to bring spending in line with revenue while paying down the national debt and simultaneously paying for increasing entitlement programs (Social Security and Medicare) for some 80 million boomers over the next thirty years. Depending on who is elected to the office of the President, all of this may be called into question. Frankly I believe we haven’t seen anything yet.