Public Employees Receive First Diminished Paycheck Today

Thursday, August 25, 2011 at 7:43 PM by

Today, public sector workers in Wisconsin will receive their first paycheck reflecting reductions in their compensation mandated by the budget repair bill passed earlier this year.

Public employees with relatively low salaries or hourly wages stand to lose thousands of dollars a year, the equivalent of as much as six months of grocery costs. Some public workers at the lower end of the income spectrum could face as much as 15% in lost income and increased costs beginning this week.

This pay cut will hit low-wage public employees the hardest, and could potentially push many families that are barely scraping by into insolvency. Wisconsin Council on Children and Families highlighted these changes in a recent brief, showing how the cuts in compensation could affect low- and moderate-wage workers like janitors, beginning teachers, and public school kitchen workers.

The budget repair bill, which inspired massive protests across the state, requires public sector workers to pay a larger portion of their health insurance costs and contribute more to their retirement accounts. These changes come after years of negotiations in which salary was sacrificed in order to retain those benefits.

Working-class families with children will find it especially difficult to manage with their newly reduced paychecks in light of other changes in the biennial budget. Those changes include rollbacks in the earned income tax credit for working families with children and funding cuts for subsidized for child care.

And last week, the Department of Employee Trust Funds caught many workers off guard when they brought to light a new coinsurance payment that could cost workers up to $1,000 a year in out-of-pocket health care costs.

Keep in mind that public employees in Wisconsin are already compensated at lower levels than their private sector counterparts. A study by the Economic Policy Institute, released earlier this year, shows that public sector workers earn about 4% less than public sector workers performing similar jobs.

For more information, see Wisconsin Council on Children and Families’s two-page brief that describes the effect of compensation cuts on low-wage public sector workers.

4 Responses to “Public Employees Receive First Diminished Paycheck Today”

  1. Anonymous says:

    Besides our lost wages, we actually now have what amounts to major medical, with deductibles of $4000 for single and $6000 for family plans. There is NO coverage until that deductible is paid.

  2. Anonymous says:

    The result is the same as increased taxes–net pay decreases either way!

  3. Anonymous says:

    I spoke with some Teachers today…..I’m glad my kids are out of school. I think there will be a new attitude in school buildings this year. When you cut under-paid Teachers by an additional 13%, after they were hired with certain promises as to pay/benefits, people that once loved their jobs, and your children, may have a change of heart.

  4. Anonymous says:

    None of these kinds of cuts are new, they are simply new to the public sector. We’ve cut the pay and benes of airline employees, auto workers, manufacturers, and now public employees. And then politicians sit around and scratch their heads as to why no one has any money to spur on the economy. When will politicians realize that cutting, cutting, cutting, cutting is NOT working? The more they cut from the middle and lower classes, the fewer people that can afford to spend $$ on anything but life’s necessities. Just WHEN will Americans rise up and say “enough”? We need another Martin Luther King, Jr.