Minimum wage for all as one city scrambles to balance books

Austerity, austerity everywhere and not a cent to spare.

In the case of one US city, it has become a case of do or die as wages are slashed to minimum for all city workers.

 

Out of money Scranton forces minimum wage

Out of money Scranton forces minimum wage

 

Scranton Pennsylvania is located in one of the old ‘rust belt’ that runs from Pennsylvania west into Ohio. Once a bastion of economic production which was fuelled by an abundance of iron ore and coal, today, this is an area filled with empty factories and empty municipal bank accounts.

The Mayor of Scranton, Chris Doherty ignored a judge’s ruling that his administration could not cut the pay for almost 400 workers. The mayor did so anyway, arguing that there wasn’t enough money in the city coffers to pay the owed payroll on time.

While the legal implications for the Mayor of this US city are unknown (he could be held in contempt of court), the financial reality is grim.

Scranton, with its 76,000 residents in northeast Pennsylvania, is fighting a different kind of battle than some other cities. It faces questions of financial solvency because of shrinking tax revenues and rising costs; Stockton, Calif., for example, recently became the largest municipality to file for bankruptcy protection. Central Falls in Rhode Island filed for bankruptcy earlier, wiping out the retirement funds and pensions for many retirees.

In Scranton, the latest payroll of about $1 million was scheduled for July 20, and it was unclear if the city had enough money to write the checks. If the Mayor continues on his path to financial salvation and sticks to the minimum wage route, the payroll cost drops to about $300,000, but city officials have said they will pay the owed wages when – and if – the current problems are resolved.

So, it would seem on the face of it that there are places where the financial reality on the ground is far worse than they are here in Ireland. It would be hard to see the head of any state or city or even council organisation here being forced onto minimum wage to help balance the books.

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