Thursday, 15 October 2009

How much public money do furloughs save?

This article in the Sac Bee says furlough savings are “illusory” in many cases.

Except for very limited, short-term uses; I really dislike furloughs. They are hell on morale, drive away the best workers who have better opportunities, and often don’t save as much as one thinks. There are long term costs on the quality and cost of an organization’s workforce (in addition to morale, a cost example is that furloughed employees tend to bank up vacation time and cash it in later at a higher salary level). When you have large or long-term budget issues, I think layoffs are a preferable way to reduce payroll costs.

At 3 furlough days per month for an extended period, the state has definitely crossed the line for where furloughs make sense.

About the Author

Ethan Jacob

Author & Editor

I am Ethan Jacob Executive Director of the Center for Business and Policy Research at the University of the Pacific, where I have a joint faculty appointment in the Eberhardt School of Business and the Public Policy Program in the McGeorge School of Law..

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