Times are tough in N.C.

Staff WriterMay 3, 2009 

It's been a bad week for state employees -- from the guy holding the slow/stop sign at highway construction sites, to the woman who teaches Shakespeare at your local college, to the guard manning the prison tower.

Everyone who draws a salary from the state is getting a pay cut of one-half of 1 percent. For someone making $50,000 a year, that is a $250 cut. The 10 hours of time off that state employees will receive -- the so-called flexible furlough -- really doesn't compensate for the pay cuts.

For many state employees who are counting every penny, this will be difficult. I know, because I've heard from some of you.

But the cuts proposed by Gov. Beverly Perdue should be put in some perspective. Many North Carolinians would love to be in the shoes of state employees.

Like me.

Starting today, I am beginning a weeklong unpaid furlough, which equals almost 2 percent of my annual pay. That's on top of a 5 percent pay cut that went into effect last month for employees of my company. Many people in the private sector are seeing similar cuts.

I'm one of the lucky ones. I still have a job.

North Carolina has the fourth-highest unemployment rate in the country, behind Michigan, South Carolina and Oregon. Everyone made a big deal during the NCAA Final Four about tough times in Michigan and how Michigan State should be the sentimental favorite in its championship game with Carolina. But North Carolina is hardly the land of milk and honey right now.

The Tar Heel unemployment rate has doubled in the past year, jumping from 5.4 percent in March 2008 to 10.8 percent this past March. There are those who think it could climb as high as 12 to 15 percent by next year.

During the past 12 months, 250,000 North Carolinians have been thrown out of work, according to Mike Walden, an economist at N.C. State University.

Those who still have jobs are earning less. During the past year, the average private sector weekly salary has dropped from $790 to $727, Walden said.

North Carolina apparently has never seen the type of state government furloughs Perdue ordered last week, although there have been layoffs in the past.

During the difficult times of the Great Depression, salary cuts were far deeper. Under Gov. O. Max Gardner (1929-1933), state salaries were cut 20 percent, and under Gov. J.C.B. Ehringhaus (1933-1937), salaries were cut another 25 percent, according to historian William Powell.

The budget crisis in Raleigh is being played out in state capitals across the country.

California employees are being furloughed two days a month. The governors of Colorado and New York have proposed five days of unpaid leave, and the Illinois governor has suggested four. Georgia furloughed 25,000 employees. Maryland has enacted five days of furloughs. The New Hampshire governor has proposed 12 days of unpaid leave.

Overall, the states experienced $102.7billion in budget shortfalls in the current year and are projected to face an additional $121billion in shortfalls for the fiscal year that begins in July, according to the National Conference of State Legislatures.

Everything is on the table as states look for savings, said Todd Haggerty, a research analyst for the national group.

"This is," Haggerty said, "pretty dire and grim from the reports we are seeing in the states."

rob.christensen@ newsobserver .com or919-829-4532

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