Scranton's desperate solution to budget woes hurt union workers

(CBS News) SCRANTON, Pa. - If you go to the official website for the City of Scranton, Pa., you will see this boast: "The future is here."

Well, city workers hope not because their pay has just been slashed to minimum wage. Scranton is just one of many cities struggling to recover from the Great Recession.

American cities have seen their revenues decline for five straight years. Seventy-two percent of them are making personnel cuts.

Unions, Scranton clash over minimum wage pay cuts

When union workers in Scranton, Pa., opened their paycheck envelopes on Friday, they were shocked to see how small those checks were. Now they're wondering what's next for them and their city.

In this file photo from Jan. 29, 2010, Scranton Mayor Chris Doherty speaks during a debate between the four Democratic candidates for Pennsylvania governor in Harrisburg, Pa.
In this file photo from Jan. 29, 2010, Scranton Mayor Chris Doherty speaks during a debate between the four Democratic candidates for Pennsylvania governor in Harrisburg, Pa.
AP Photo/Carolyn Kaster

The fight here has certainly been a difficult time for the City of Scranton. The unions are suing Mayor Chris Doherty and the city in order to stop the pay cuts.

Robert Pugliese has worked for Scranton's Department of Public Works for 26 years. He made $19 an hour.

But last week, his salary -- along with nearly 400 other public workers' -- was cut to minimum wage: $7.25.

I own a house in the city, two children, wife, we have car payments, we have house payments," Pugliese said. "We have utility bills. We have to pay them all, and it's not going to be easy to do on this kind of money."

Scranton faces a $16 million dollar budget gap. Mayor Chris Doherty proposed either a 29 percent tax hike (a 78 percent hike over three years) -- or drastic cuts.

"We don't have enough money. That's what it comes down to. We're trying to balance how we get through this," Doherty said.

Doherty said after paying the workers minimum wage, the city had just $5,000 left. He says he had few options.

"We probably would've lost the gas and the diesel for our police vehicles, our fire trucks. ... We probably wouldn't have been allowed in the landfill to dump our garbage."

So he sent out a letter telling workers the cut would be for the "foreseeable future."

Union worker Robert Pugliese's $19/hour paycheck was cut to $7.25 because as Pa. city struggles to address $16 million budget gap
Union worker Robert Pugliese's $19/hour paycheck was cut to $7.25 because as Pa. city struggles to address $16 million budget gap
CBS News

Although he could make more on unemployment, Robert Pugliese is still showing up to work, hoping city leaders find a solution soon.

"It's sad that it came down to this," he said. "I can't understand how it could get this bad. I could never run my household down this low. I don't know how they could run city down this low."

The unions are suing the mayor and the city to stop the pay cuts, and last week a judge ordered the workers be paid full wages. Now the unions want the mayor held in contempt.

  • Elaine Quijano

    Elaine Quijano was named a CBS News correspondent in January 2010. Quijano reports for "CBS This Morning" and the "CBS Evening News," and contributes across all CBS News platforms. She is based in New York.

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