Reed Asks City Workers to Take a 10 Percent Pay Cut

At last night’s City Council meeting, Mayor Chuck Reed asked all city employees to accept a 10 percent cut to their salaries. Without this, he said, either 450 workers will have to be laid off, or hours at the city’s parks, libraries, and community centers would be “cut dramatically.” Though some City Councilmembers countered with a sliding scale proposal, the Mayor’s request received the Council’s support by a vote of 8-3. The proposed cut would affect all city workers, including police officers and firefighters.

Though many residents spoke out at the meeting in support of the pay cut, city employees and their union representatives were unhappy about the news. Yolanda Cruz of the American Federation of State, County and Municipal Employees Union complained that the city was trying to “balance the entire budget deficit on the backs of city employees.” The Mayor countered that the city spent $138 million on its employees’ retirement benefits this year, and that this is expected to go up by another $53 million next year.

Though the final budget will only be decided in June, last night’s vote empowers the City Manager to begin negotiating with the eleven employee unions that represent city workers. Several of the unions’ spokespeople have already suggested that they will strike if the city carries through with the Mayor’s plan.
Read More at ABC 7.


  1. We’ll soon see how much solidarity there is in the unions.  Since seniority rules re who keeps jobs, will those with seniority give a little to help save jobs, or will they cut their brothers and sisters loose?  Only time will tell.

    And the pension system must be revised.  The city gives eight dollars to the employees’ three, nd guarantees an 8% NET ANNUAL return, which is fiscal folly.

    • Probably best to forget negotiating with intransigent union reps.  Start the layoffs immediately – 50 per week for nine weeks – and get it over with.

  2. This take on the meeting is quite different than Merc story this morning which suggests that Reed caved to Kalra and other laobor backed councilmembers when he said that he doesn’t really mean 10 percent.

    Don’t think our good mayor has the votes for what he wants to do.

    • That’s because the Merc story is accurate. Reed did agree to include the proposal to look at a sliding scale and only agreed to Kalra and Chu’s proposals after it was clear he didn’t have the support of either Chirco or Herrera.

  3. Put a city charter amendment on the ballot immediately.  Change the pension plan to require 50-50 cost sharing between employee-employer and remove the guarantee about 8% annual growth.

    Sections 1504, 1505 are the one’s that need cleaning up. 

    Seems like the council should be able to muster enough votes to at least put this on the ballot as a referendum.  If they don’t, perhaps an initiative is in order.

    Which would be a real let down, why are folks elected if they don’t want to make tough calls and just want to past the buck to future councils and taxpayers?

    • “why are folks elected if they don’t want to make tough calls and just want to past the buck to future councils and taxpayers? “

      But they have time to debate plastic bag bans, and banning toys from happy meals.

    • I’m not currently a member of any union, but have been in the past.

      If I were looking at this from the angle of protecting my own and my fellow employees, I’d be looking at proposals with a coalition of other unions for creative solutions.  I suspect the preference would be to generate additional revenue by coming up with some vehicle to increase taxes or borrowing to prevent any cuts to jobs, salaries or benefits.  This could be sold the the public as a way to preserve core services.

      In the past, a benefit assessment district was created to directly support library materials purchase.  At the time, it was promised that the city would not cut General Fund contributions.  Anyway, that was a long time ago and a different council.  I’d look long and hard at a dedicated tax for core service and make sure I included the popular ones people use like parks and libraries.  This would still be a hard sell, but actually has a chance in this area.

      This method would increase revenue without cutting expenses, but the grateful council would have money freed up from the general fund which would take the pressure off imposing layoffs or major benefit changes.

      That’d be my pro-labor Plan A, with some alternative Plans that I wouldn’t get into until I forced a vote on the new revenue option.

      On the pro-business side, I’d look at privatizing or spinning off services, such as the airport and parking.  In Chicago, London and other cities, such privatizations have yielded quick infusions of cash for troubled municipal governments.  They have also seen big political problems as the vendor in Chicago, for example, has run the city parking meters in profit-centered ways with maintenance deferred but collections high.

      This is a problem akin to privatizing other public-goods like what the MTC is doing with the carpool lanes.  Its a remarkable way to generate money and get projects moving forward even during a recession, but it just seems fundamentally wrong to take something that generations of taxpayers paid for and turn it into a profit-center where only the wealthy or subsidized poor can use it (once again squeezing the middle class.)

      These days I’m less partisan, and would call myself a pragmatic idealist.  Strive for ideal solutions, but at the end of the day, make sure you at least have workable solutions in place while you work on long term improvements.

      Water Treatment, Aiport Services, Solid Waste and Recycling are already regional in scope, so maybe I’d look at partnering with other political entities to develop, use and finance these programs.  Perhaps in the process some money could be leveraged up front that would help the cities bottom line.  Labor can’t win every fight, but the tactics of fighting every battle means they do usually prevail by wearing down opponents.  In the case of airport union jobs, that would have to be on the table as part of the spin-off plan, and the labor peace provisions with the city hall and other buildings also reconsidered.

      Unions are good vehicles to provide collective power to people who would individually have little.  Union’s are also a business in and of themselves, providing wealth, income and power for those working in the labor organizations.  There’s market forces that have seen unions contract and also efforts to expand into new markets, such as organizing health workers.

      Those not in unions don’t appreciate all the good stuff, and let’s face it, the unions aren’t in business to look after the rest of us, just their members.  I wonder if there’s room for a progressive political movement called the taxpayers union whereby rational thinkers put work into improving the quality of public business (and exerting some influence to balance the vested influence of public employee unions who trump all others in access to local elected officials.)

  4. As District 9 City Council candidate Robert Cortese recently pointed out on his Facebook page, San Jose has thousands (I believe its just over 2700) employees who make over 100K per year, and quite a few who make over 200K per year.  How about we cut five percent of the salary of those making less than $100K, twelve percent from those making between $100-200K, and 30 percent from those making over $200K?  Just my personal suggestion, but I don’t mind saying I think its a pretty good one.

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