Scranton, Penn. to pay back workers' wages, plus interest

[Eugene]

Source: Reuters

Mon Jul 30, 2012 1:55pm EDT

(Reuters) - After slashing public employees' pay to minimum wage on July 6, the mayor of cash-poor Scranton, Pennsylvania, has struck a deal to pay them back what they are owed with interest.

Mayor Christopher Doherty agreed that the city would pay approximately $750,000 in compensation owed to firefighters, police officers and public works employees, plus at least $5,100 in interest, said Tom Jennings, a lawyer for the employees' unions.

In exchange, the unions said they would drop their bid to have the mayor held in contempt of court, according to the agreement, reached Saturday and presented to a judge on Monday.

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Doherty made headlines around the world after cutting employees' pay to the state's $7.25 minimum wage for the July 6 payroll period.

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Read more: http://www.reuters.com/article/2012/07/30/us-usa-scranton-payroll-idUSBRE86T0WR20120730

[markpkessinger]

1. It's still messed up . . .

. . . because it forces the employees to function as a lender to the city!

[Igel]

3. And yet it's what the city offered to start with.

So it was a good faith offer, and the best the employees could hope for.

Can't get blood out of a turnip. The option was this or emergency lay-offs for everybody. This way at least they get work out of the employees to keep that all-important public sector functioning while the employees have at least a promise of income. Since it's now in writing, that makes it legally binding. Silly of the union not to get it in writing asap.

Of course, I guess if they were laid off they'd get unemployment, so there's that drawback.

California's done this kind of thing numerous times. No money in the coffers, issue IOUs--de facto scrip--and hope it sticks. It did. Often wondered if it infringed on Congress' right to coin money. Some lenders and banks took the de facto scrip at nominal face value and held it as a kind of interest-free loan to the state employee/state until the money flowed again.

[happyslug]

2. This is part of a fight between the Mayor and City Council

Post from July 11 on this fight:
http://www.democraticunderground.com/?com=view_post&forum=1014&pid=163837

Actual Settlement agreement (From the Scranton Tribune-Times):
http://dl.dropbox.com/u/48182083/Settlement%20Agreement.pdf

Scranton Tribune-Times article on the Settlement:
http://thetimes-tribune.com/news/scranton-unions-reach-settlement-1.1351815