You can be sure there is a recession when your neighbors tell you that their pay was cut by 10 percent and that they were forced to take off one day a week without pay. The carpenter across the street hasn’t had more than a week's work at his trade in the last two months. Two other neighbors were laid off.
Tough times have finally reached the Emerald City. Last February the U.S. Labor Department listed Iowa at a (very low) 3.2 percent unemployment rate and Seattle Metro area with an unemployment rate at 8.7 percent. In May, another source listed Seattle’s unemployment at 11.5 percent. There are so many variables that no number is exact.
It’s abundantly clear that private corporations are laying off people. Even seemingly healthy businesses are tightening their belts, as have local counties. King County, Starbucks, Boeing, and Microsoft (just today) all have either cut people or plan to or offered unpaid furloughs. The exception is the City of Seattle, whose belt tightening doesn’t even amount to one notch. What gives?
Seattle as of late 2008 had 11,201 employees with a payroll of $743,195,514. Mayor Nickels proposes cutting around 59 people in 2009, with half of that number vacant positions that won’t be filled. Since the Mayor hired over 1,000 people during his tenure in office this level of trimming employment seems a minor gesture. The Mayor's plan, not yet approved by the City Council, would cut $13.3 million from the City’s 2009 general fund. The forecast of Seattle’s revenue shortfall for 2009 is closer to $29.5 million, far more than he plans to cut. He would make up the difference with Seattle’s Rainy Day Fund, a kind of piggy bank against future emergencies. To save more money the Mayor claims he will furlough some professional staff, reduce overtime, and cut back on office supplies. That’s a lot of paper clips.
Cutting staff at the City is tough to do, while cutting services is easier. Cutting out the swollen middle-management levels means taking on labor contracts, which can't be broken unless unions agree to any cuts in pay, and there are numerous other legal restraints. Meanwhile, U.S. Department of Labor statistics suggest that City of Seattle public employees, especially those in administrative positions, are among the highest paid employees in the state and exceed the average pay of similar positions in the private sector.
The Mayor says he will cut the pay of 100 top administrators, many of whom lie outside union regulations, though he seems mostly to have in mind forgoing scheduled pay increases. Currently the top 100 highest paid public employees all make above $134,625 per year, topping out at $225,057. Seattle pays 689 employees who make $100,000 per year or more. By far the largest chunk of payroll money is between around $65,000 and $125,000. Nickels hasn’t been specific about cuts in this area aside from saying that he won’t cut public safety or funds for people in need.
Public Safety means Fire and Police, both represented by the most powerful unions in the City. The Fire Department has 32 executive positions or chiefs, who make over $125,000 per year, none of whose job requires they enter flaming buildings. The Police Department has 26 chiefs or executives who make $125,000 per year or more, none of whom work the streets.
Seattle Transportation Department has 728 employees and Seattle Public Utilities has 1,389 employees. Sea-Trans has 7 executives above $125,000 and Seattle Public utilities has 11 executives above $125,000. If we add up all the Mayor's top executives it comes to 61 people.
In order to achieve cuts, 23 of the city departments have been given percentages of their budgets which must be cut. The details of the proposed budget cuts are listed here, and give the impression that most of the budget cuts will be reductions of public services, along with the usual curtailment of consulting contracts, travel, and professional development costs. It appears that only minor cuts in the salaries of our highest paid employees are part of the Mayor's plan, with perhaps Police and Fire top brass excluded.
There are other strange anomalies in the pay scales of Seattle public employees. Take the Library, for example. Their 690 employees represent proportionally the highest educational level among City employees, yet library employees, as a group, are the lowest paid public employees in the system. There are only two library administrators with pay above $125,000 and they supervise 345 people as against the Fire Department administrators who supervise only 65 people on average. Library management is more efficient it seems.
Eventually, the City will have to face facts and make cuts. So far there is every indication it will occur in services offered to the public rather than from the salaries of City employees. Moreover, some City departments like the Fire Department will get a 0.32 percent cut while street repair will get a 5.4 percent cutback.
There are many approaches for cutting city budgets. Some prefer that a fixed percentage of cuts come from all departments. This philosophy, on the surface, would appear fair but preserves some city endeavors that be put on ice for better times. Another approach is to cut optional services more than required or critical services.
We don’t know yet how our City Council will respond to the crisis. They could cut public services and raise taxes and fees and not tamper with the number or pay of Seattle’s 11,000 employees. Or, they will cut a little everywhere. It’s time to call or go to the City Council website and register your opinion.
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