California labor leaders are warning that the state’s $42 billion budget gap, which has grown greatly in recent months as the economic crisis deepens, must not be resolved at the expense of the state’s working families.

Negotiations between Democratic and Republican state legislative leaders and Governor Arnold Schwarzenegger have been stalled for months, as Democrats lack the two-thirds majority required to pass a budget while Republicans are holding out for no new taxes and don’t support the Republican governor’s revenue proposals. Talks were to continue this week.

Meanwhile, the business community, the governor and some Republican legislators are seeking to weaken labor standards in the state, as well as to impose a cap on spending.

In a Jan. 30 press conference, leaders of the California Labor Federation and the Teamsters Union said efforts to achieve these longtime business and Republican goals would harm, not help, economic recovery efforts. They warned that any legislators from either party who support weakening the standards would face serious consequences.

“A hostage crisis is happening in Sacramento, and we’re trying to take some action here to solve that problem,” Art Pulaski, head of the California Labor Federation, told the journalists. “They have a list of rollbacks against hard-fought worker protections like the 8-hour day, overtime pay and meal breaks, and are standing in the way of a budget settlement until they get some takeaways accomplished.”

Calling the business community’s efforts “nothing more than extortion,” Teamsters International Vice President Chuck Mack emphasized that the economic crisis was caused not by workers, but by the same corporations that want to change the standards and put the burden on workers. “We have to stand up to that, we have to speak out very clearly … If we’ve got to marshal forces, engage in recalls, then we’re going to have to do that.”

Pulaski pointed out that wages, which directly support local economies, have stagnated for the last 40 years while CEO compensation, which largely does not do so, has soared.

“The short of it is, the more money we put in average working people’s pockets, the more they’ll spend on local goods and services, to keep the economy growing,” he said. “But what’s happening in Sacramento is that this big business lobby is pushing for proposals they have sought for years and haven’t been able to get.”

Pulaski said those who would be most sharply affected by the takeaways are mostly non-union workers, since union members are protected by their collective bargaining agreements. Businesses’ claims that they need more scheduling flexibility also don’t hold water, he said, since recent changes in the labor code already provide significant flexibility.

He also called a spending cap unrealistic. “You have to understand what future years bring in terms of inflation, rising costs and new economic challenges,” he said.

Meanwhile, some 238,000 state workers have been ordered to take two days a month off without pay, starting this week. Funds have been stopped for most public works projects, programs for the elderly and disabled and for childcare face a freeze, and state grants to college students are being delayed.

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