The economic crisis that California faced a mere year ago was handled by gifting hundreds of thousands of IOU’s to contractors and taxpayers. This year’s budget challenges may be addressed by cutting state workers’ wages to the very core.

Because government officials are unable to reach an agreement regarding the new fiscal-year budget for the state, most of California’s quarter of a million state employees will most likely see their salaries cut to the federal minimum.

It is a perfect example of workers finding themselves in the midst of party-line crossfire as Republican governor, Arnold Schwarzenegger, struggles to find middle ground with the Democrat-led California legislature. With no light in sight at the end of the tunnel, Schwarzenegger’s administration had no choice other than to move to cut 200,000 workers’ wages to $7.25/hour across all job types and pay scales, making the local lifeguard on par with an accountant.

When the budget is finally agreed upon, affected workers would, in theory, receive back pay; however, state employees have already received the brunt of financial abuse, with cuts already taken on the average of 14%.

Republicans propose severe cuts to state social programs such as welfare and Medicare, while Democrats wish to tax some corporate industries and delay corporate tax breaks. Workers are fortunate that 2003 California Supreme Court ruled that a state can withhold salaries during budget impasses as long as they continue to comply with federal law, which does not allow wages to drop below federal minimums.

Not all agree that this is a solution to the current budgeting predicament. In fact, the Service Employees International Union, the largest union of California state workers, said in a statement that the cuts will only add to the state’s budget crisis. The union has made claims an agreement was negotiated last year that would have saved the state some money, “but the governor walked away from that deal.”