Schwarzenegger to invoke wage cuts

SACRAMENTO, July 23 (UPI) -- The pay of 200,000 California workers may be cut to the federal minimum wage to help balance the state budget, the San Francisco Chronicle reported Wednesday.

The newspaper said the wage cut to $6.55 per hour was part of a draft executive order Gov. Arnold Schwarzenegger plans to issue next week. The state minimum wage is $8 per hour.

The Republican governor also is expected to order a freeze on state hiring, an end to all but critical overtime and the layoff of 22,000 temporary and seasonal workers, the newspaper said.

"As a result of the late state budget, there is a real and substantial risk that the state will have insufficient cash to pay for state expenditures," the executive order states.

California has been without a budget since its fiscal year began July 1. State lawmakers have been unable to resolve the state's projected $17 billion budget deficit.

The idea of balancing the budget by cutting wages for the lowest-paid workers didn't resonate with state labor officials.

"Holding state workers hostage is not a fair way to get to a budget agreement," said Emily Clayton, policy coordinator for the California Labor Federation.