While we should expect that public sector labor would defend every privilege they have gained for their members, it is still astonishing that state unions and their patrons would consider their positions immune from the ravages of the state’s budget debacle.

With every other politician claiming we are in the worst economic downturn since the Great Depression, state unemployment rising to 8.3%, and consumer confidence falling to an all-time low, since when are reductions in state government personnel costs off limits? Indeed, Gov. Schwarzenegger has proposed what are probably the least harmful approaches to the current state workforce to minimize layoffs by a combination of furloughs, salary reductions, and reducing some state holidays, like Columbus Day.

Indeed, private sector organizations are falling all over themselves to minimize job losses by spreading sacrifice among everyone in an organization. The faculty senate of Brandeis University – hardly a reactionary institution – is voluntarily accepting pay cuts in hopes of preventing employee layoffs. Can you imagine the Faculty Association of California State University making a similar proposal?

Private companies are trying the same approach, including Dell (extended unpaid holiday), Cisco (four-day year-end shutdown), Motorola (salary cuts), Nevada casinos (four-day workweek), Honda (voluntary unpaid vacation time) and the Seattle Times (plans to save $1 million with a week of unpaid furlough for 500 workers).

The Governor has also proposed beginning the important effort to enact long-term reforms in the state’s employee health care and retirement systems. Ask employees of small and large businesses about the prospects for their own 401(k) plans. FedEx has slashed the pay of more than 35,000 employees, including a 20% base pay cut for its chairman and chief executive, Frederick W. Smith. It will also stop contributing to employee retirement plans for at least a year.

Since the peak of California’s employment in the summer of 2007, private employers have shed more than 200,000 jobs, while government has added 39,000 jobs (see chart below). State and local public employees provide valuable services, but that should not exempt them from the consequences of a severe economic contraction or persistent poor decisions by elected officials.

Change in EmploymentChange in Employment