Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, January 17, 1992 TAG: 9201170535
SECTION: EDITORIAL PAGE: A-10 EDITION: METRO
SOURCE: DAN H. PLETTA
DATELINE: LENGTH: Medium
CUT PAY TO KEEP STATE WORKERS ON JOB
A HEADLINE in the Roanoke Times & World-News Jan. 9 says 900 more state employees in Virginia will have to be laid off because the recession is worsening. Such action scares all employees as they wait for the ax to fall. It forces them and all other workers to curtail spending, and deepens the recession further.The layoffs could be avoided now, as many were in THE Depression of the 1930s. Subjecting all employees and elected officials to a small pay cut now could shift enough funds to absorb reduced revenues and keep everyone working.
My memories of how Virginia weathered the Depression may be of interest. I watched Virginia set an excellent example for other states.
In April 1932, I was offered an assistant professorship in engineering at Virginia Tech. Before I arrived on Aug. 31, I was, and all state employees were, subjected to a 10 percent pay cut. Pay cuts were used to avoid layoffs. After another year or so, everyone had a second 10 percent cut.
Virginia, however, continued to pay in legal tender: dollars. Some states paid in scrip. Scrip was frequently discounted up to 50 percent when employees cashed these IOUs. They had to do so to live.
All federal employees also got a 5 percent pay cut. At that time, the national government enlisted the aid of industrial leaders to advise it on how to get the economy moving. They were the "dollar-a-year men." One, the president of Detroit Edison Co., got his check after a year of service. It was for 95 cents. I understand that rather than cash it, he framed it.
During the Depression, people did not mind the pay cuts. They knew this "surplus" kept many of their peers working. They accepted the situation when they saw all of their leaders subjected to equal cuts.
If workers don't accept pay cuts to share the burden, those who remain employed will be taxed more to pay for the increased unemployment-benefits load as layoffs increase it.
I favored Gov. Wilder's determination on Aug. 2, 1990, "to keep everybody working . . . to see nobody laid off," as noted in this newspaper that day on page A-1. I wrote him then suggesting the sharing policy noted above, after I had first polled some 30 faculty and staff members at Virginia Tech. Everyone was willing to accept a small cut so no one would be laid off.
Now might be a better time to start, with him setting the example. As a retiree, I'd take my share, too.
Dan H. Pletta is a distinguished professor emeritus in the Department of Engineering Science and Mechanics at Virginia Tech.