honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Wednesday, July 22, 2009

'Gov. No' says layoffs hurt us all


By Jerry Burris

Former Gov. George Ariyoshi does not wish to be seen as a kibitzer, and he knows that the budget crunch faced by Gov. Linda Lingle is real.

Still, Ariyoshi cannot help but wonder whether the dire situation faced by the state today might have been avoided with a little more prudence and planning.

Ariyoshi is a firm believer in the idea that a small dose of pain today is preferable to a large dose of misery tomorrow. In practice, this means holding spending down today in relatively modest terms so that more draconian measures — like layoffs — will not be necessary when times get tough.

This philosophy brought Ariyoshi more than his share of grief during his three terms as governor. In some quarters he earned the nickname "Gov. No" for his refusal to spend money even when times were good.

But Ariyoshi believed that slow and steady was preferable to the wrenching experience of overspending one quarter and then severe restrictions the next.

Specifically, Ariyoshi believes that the Lingle administration would have been better off if it had followed the idea of more vigorously restricting spending over the past several years before the economic crunch hit hard.

The key tool in this approach is attrition; that is, letting positions go vacant when someone retires or leaves government service. Now, this has its obvious downside. Leaving positions dark means more work for those who remain behind. And it can slow down the quality of government service for the public.

But this, Ariyoshi contends, is gradual pain compared with the dramatic and immediate pain of layoffs or across-the-board pay cuts, whether direct or in the form of furloughs.

"Layoffs and pay cuts are very traumatic," Ariyoshi said. "Every employee says to himself: 'Maybe it will be me.' So they alter their buying patterns and their families and friends do the same. It becomes a big drag on the economy."

His point: When government (one of the state's biggest employers) cuts its payroll, the ripple effect goes right through the entire economy. Short-term gains for the state budget may be lost in the overall drag on the economy.

The unions, Ariyoshi argues, understand this and will readily accept the prospect of more work for fewer members in exchange for long-term job security.

A side benefit, he contends, is a more efficient government with fewer people doing the same amount of work.

Now, Lingle may well contend that such advice is well and good, but she has to deal with a budget crisis today, not some years in the future. And surely, the economic downturn the Lingle administration faces is equal to, or greater than, anything faced by Ariyoshi.

But these things are never as immediate as they might appear, Ariyoshi argues. A vigorous program of attrition and payroll shrinkage today, combined with spending restrictions where appropriate, might resolve the budget crunch more effectively than outright layoffs or furloughs, and without the unintended but inevitable side effects.

With the Lingle administration already releasing lists of workers liable for layoffs, this advice may seem to some as too little or too late.

It might also be looked upon as political meddling, particularly in light of Sen. Daniel Inouye's criticism this week of Lingle's approach to the budget crunch. When two prominent Democrats find fault with the way the Republican governor is handling things, it is difficult not to suspect politics.

But there's another explanation. Working with Hawai'i's unions is part of the political DNA of people like Ariyoshi and Inouye. It worked for them and it worked for the thousands of men and women who belong to the unions.

It would be virtually impossible for them to see the path out of this crunch in any other way.