Tuesday, July 01, 2008

CIRM Salary Freeze: Sharing the Pain

The California stem cell agency's budget contained a little surprise last week – one that was not contained in the proposed spending plan presented to its Finance Subcommittee.

The proposal for the fiscal year that began today imposes a salary freeze through December. It is not a move that is financially necessary at the $3 billion agency, but one designed to show CIRM's fiscal responsiveness.

John M. Simpson
, stem cell project director for the Consumer Watchdog group, commented on the freeze, which CIRM executives said the staff had agreed to. Simpson wrote on his group's blog:
"This is a sensible PR gesture by an agency who's leadership too frequently in the past has not seemed to understand that it is part of state government. Kudos for the step."
Simpson continued:
"It's difficult to know the exact financial impact. The proposed fiscal 2008-09 budget includes $250,000 for merit and cost-of-living increases. How much of that falls in this calendar year and how much comes in 2009 is not clear.

"Nonetheless -- as with many things in life -- it's the thought that counts . And this was a good one."
The reason for freeze? To show "solidarity" with the rest of the state and share the pain of the fiscal extremis in which California finds itself.

Simpson said that CIRM could go a little farther, demonstrating true fiscal leadership and cut by 10 percent the salary of any CIRM staffer making more than $190,000 a year.

Our take? With 10 years experience as business editor of a large daily newspaper and roughly that many years also as labor union representative, I am skeptical of salary freezes. They disproportionately affect employees at the lower pay scales, who have more difficult economic times, particularly with today's rising energy and food costs.

In the case of CIRM, the staff really has no choice concerning the freeze. Management wants it. Drag your feet, and you are not a team player or worse.

CIRM staffers are relatively well-paid by state standards so a case can be made that a freeze is reasonable. Symbols are powerful. An even more powerful symbol – a 10 percent pay cut for CIRM execs -- is suggested by Simpson, but we suspect that will remain a suggestion – not a reality.

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