Personal Finance Round-Up: Working for Peanuts

working for peanutsIt’s every government worker’s worst nightmare – and no, I’m not talking about Scott Walker running for governor in your home state. I’m talking about what the mayor of Scranton, Pennsylvania slashing the pay for 400 city workers to the federal minimum wage to compensate for a $16.8 million budget deficit – a move so drastic that it nearly led to hundreds of firemen and women, police officers, and other essential personnel nearly walking off the job. As a result, the mayor had to defy a judge’s order and risk being held in contempt of court.

I don’t know about you, but I value these workers. In my opinion, they’re already underpaid – would you be willing to charge into a burning building for $35,000 a year? Would you be willing to go toe-to-toe with a convicted felon for $40,000? For many of us, the answer to those questions is probably not. For the Scranton mayor, however, reducing the pay for these men and women to minimum wage – $7.25 an hour – is his only solution to the shaky economy.

This is in stark contrast to a 2011 editorial on CNN by Anne Thompson, who argues that the only way to bolster the stagnant economy is to increase the federal minimum wage.

What’s to blame for the Scranton minimum wage debacle? One need only look to another city 2,000 miles away for the answer: Stockton, California. Mish from Mish’s Global Economic Trend Analysis goes inside the Stockton situation to figure out exactly why the inland empire city had to declare bankruptcy this summer. In hisĀ post Stockton, CA, Bankrupt; Unions (Not Housing Bust) Primarily To Blame, Mish writes:

“The thing Stockton could not correct over time is ever-escalating pension promises and public union salaries. Union pensions wrecked Stockton. The only way to escape the death-grip of inane pension promises is bankruptcy.”

It seems that the move by Scranton mayor Doherty was only temporary, as the state has come up with a tentative recovery planĀ for the city and reinstated salaries. But the mayor has stated, “I don’t know what’s going to happen. We’re doing our best.” The plan may not be enough.

Here are some other posts this week that touch on what you make – or don’t make – on the job:

Volunteering Time vs. Charitable Donations [Canadian Finance Blog]
What’s your time worth when it comes to helping others? Author Teacherman poses several queries in this post and attempts to find out.

Why Aren’t You Chasing After the Juicy Gigs? [The Financial Blogger]
How often have you said you hate your job in the last year? Now, how often have you tried to do something about it? MD gives us some insight on why so many of us stick with jobs that leave us unsatisfied – and what we can do about it.

How Much Is Your Total Compensation? [Free From Broke]
“The dollar signs you see on the offer letter aren’t the only important factors to consider,” writes Kevin. “There are a large number of other factors that get thrown into the mix before you should accept a job.” Kevin explains six hidden perks that may come with your next job offer or contract.

How Much Do You Need to Save for Retirement? [You Have More Than You Think]
Your salary is more than just what you take home every pay day – it will ultimately determine how and when you can retire, argues Shawanda. She puts the “Wealth Number Challenge” to the test, running through three retirement scenarios, complete with detailed projected budgets.

I Did Something Big [Daily Money Shot]
Jana’s not kidding when she says she did something big: “Last week, I did something I never thought I’d do. I quit my job,” she says. But she didn’t do it without putting a whole lot of forethought into the decision. Here’s her five-step process to leaving the rat race with your pride, sanity, and finances intact.

6 Questions You Should Never Ask on a Job Interview [Personal Dividends]
During a job interview, “it can be just as important to be prepared to ask your own questions,” says Kevin. However, there are certain queries you should avoid, and he’s got six of them listed here.

What Do You Think About Executive Perks? [Bargaineering]
I could give you an earful about this topic, especially after Miranda tells us, “CEO pay is 380 times the average pay of workers, while in 1980 CEOs earned 40 times the average worker’s pay.” Want to see some more figures that will make your head spin? Miranda’s got ’em.

  • Jana @ Daily Money Shot

    Thanks for sharing my post!

    For what it’s worth, when I was a juvenile probation officer, the highest I was ever paid was $38K/year. Not too bad but not that great either. Many law enforcement personnel, particularly the ones in the prisons and on the streets, are grossly underpaid. Cutting their wages to minimum wage is absolute BS.

  • Walt Valdemoro

    Great article.

  • Walt Valdemoro

    Is the set minimum wages for firemen and policemen is enough to have a comfortable standard of living? I am hoping and praying to these great men, they can survive from their income, they can provide decent needs for the family.

    My suggestion to them is to look another source of income or they start taking part time business online