10:29am

Fri August 10, 2012
Politics

Ask a Latvian: What's the solution to California's budget crisis?

California's state employees received their first “furlough-affected” paycheck, this month, and it provided more than its share of controversy. Many unionized workers have called for layoffs, rather than forced days off, to help balance the state's budget. But Governor Jerry Brown's solution – and suggestion to possibly implement a four-day workweek – is not unheard of. At least in Eastern Europe. In 2009, similar measures were introduced by many state institutions in Latvia.

At the time, the Baltic nation had just begun to go through a tough recession and received a financial bailout from the International Monetary Fund and European Commission. The budgets of many state institutions were cut by more than 30 percent while functions and responsibilities often remained the same.

As a result, management of those organizations had to come up with various creative solutions that would allow them to still get their jobs done. One of those institutions, ironically, was the State Revenue Service, responsible for tax collection. In 2009, to save money, it decided to shut its doors on Fridays. A similar approach was taken by the State Employment Agency, regardless of the fact that it had to deal with an increase in the number of unemployed Latvians. Many other institutions decided to lay off some of their employees and cut the salaries of those remaining employed.

The decisions to introduce four-day workweeks were generally accepted by state workers rather peacefully, as were most of the other harsh cost cutting measures implemented in Latvia. Perhaps the reactions were caused by the fact that the salary of almost every state employee was cut by an average of 10-20% regardless of the amount of hours they had to work.

Several years later, institutions like the Latvian National Library, still operate just four days a week. Many other agencies that self imposed furloughs have returned to a five-day workweek. It's hard to say, though, that things in Latvia have returned to the way they were before the recession.

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