The Huffington Post

Furlough days illustrate differences between public and private sectors

Wednesday, July 28, 2010

Recently, under attack for giving big raises to his staff, Governor Quinn issued an order requiring all State nonunion employees to take off 12 more days of unpaid work this year - which now makes a total of 24 unpaid "furlough" days. These days of non-work are said to translate to a 9.2% reduction in pay. Governor Quinn said he would take these furlough days just like everyone else.

The order applies to about 2,700 non-union employees - but does not touch the 48,000 unionized workers.
Mayor Daley announced a similar reduction several weeks ago: Chicago's non-union employees, including the Mayor himself, will take 24 unpaid "furlough" days.

The Governor and the Mayor are not talking about reducing pay for work. People will just work less. In the case of State employees - that's about a month out of the year less. Since they won't
work, they won't be paid.

Suppose you managed a professional firm and you need secretaries to support your lawyers, or accountants, or consultants. Would you tell your office manager to fire 9% of the secretaries - even if it meant the briefs and letters didn't get typed, or the tax returns didn't get filed? Would it make any difference if, instead of firing 9% of the secretaries, you made them all take 9% of the days off? The briefs and letters still wouldn't get typed.

There is one set of circumstances in which a furlough makes sense: this is where the work - or the time at work - wasn't used or needed anyway. If 10% of the state's employees sit on their hands all the time, or if all of them sit on their hands 10% of the time, then the furlough makes all the sense in the world.

But then one asks: why did the Governor and the Mayor wait for a budget crisis to reduce the unneeded amount of time they were buying from their employees?

The overriding problem is that in state and municipal service - just as in the Chicago Public School system - the ordinary incentives that exist in the private sector are missing. State and local government - like CPS - are monopolies. They are largely bureaucracies, and largely unionized. (Gov. Quinn's order applies only to the 2700 non-unionized State employees - not the 48,000 unionized workers.) This means it's next to impossible to get rid of incompetent or sleepy workers, or to incentivize them to do better. Collective bargaining protects the incompetent, precludes meaningful job performance evaluation, and makes it impossible to reward the strong performers - or stimulate the weak ones - through compensation adjustments. In such an environment, it's likely that 30 or more of the time spent "at work" is effectively wasted. Perhaps the percentage wasted is larger. Nobody knows for sure. The system is not friendly to anyone trying to find out.

There are no doubt exceptional employees in state government who work hard and well -- just as there are within CPS. One place appears to be the Governor's Budget Office, where much of the ruckus started. The Governor had granted a generous raise to his chief Budgeteer, along with others; that led to the public furor over the raises - which in turn led to the political defense tactic of granting an additional 12 days of furloughs.

Personally, I'd have preferred he give the Budget Office a bigger raise - and then tell them to work harder to figure out ways to save the State from fiscal calamity - rather than order them all to take a month off from work during the coming year.