But back to Arnold - for most state employees, the pay cut is just temporary and they'll get their back pay when the budget is approved - they used to get NO PAY when there was no budget, but a recent court decision required that they get at least minimum wage. We had the same deal as federal employees: no budget, no pay - but we alway got paid once the budget passed. In addition, the state employee credit unions have traditionally given interest-free loads to help needy employees through this no-pay/low-pay period.
What IS a problem is the status of temporary employees. Thousands of temporary employees (including student employees) are likely to lose their jobs in this action, and there is no plan to give them any compensation or to give them their jobs back when a budget is signed. Most of these temp employees are the ones who need jobs most.
In the Governator's defense, I have to say that it's very hard to balance a budget an in anti-tax state like California. A huge amount of the budget is "designated funds," appropriated by election initiatives and outside the control of the governor and legislature. What's left is less than half of the state's revenue.