If I'm not mistaken, all of the city employees have been reduced to minimum wage. Scranton isn't that far from my area. In fact, I can get there in less than an hour and a half. We pass it on our way to Philadelphia. It is another old rust belt city that no longer has a strong manufacturing base.
That being said, the act of reducing everyone to such a small paycheck is irresponsible. The employees would have been better off if they had been laid off or had their work week shortened. Then, at least unemployment could have helped them to get by. Since they are working full work weeks, they are ineligible. I think that the Scranton administators did this to draw attention to their city. There is no other explanation.
I understand the fact that there is no money in the city coffers to pay everyone a regular salary, but the city contracted to pay X amount of dollars to their employees and now they are failing to do so. If an employee walks off the job, unemployment can refuse to pay them due to job abandonment issues. So many people live paycheck to paycheck as it is. We all know that it isn't the best way to live, but they do so for many reasons. Because they have jobs, these people may be ineligible for any assistance, etc... None of us are guaranteed a paycheck, but this was done deliberately to these employees. Presumably, the administrators have deeper pockets and aren't in danger of defaulting on their obligations. If Scranton is anything like my city, most of the politicians are attorneys that work in law offices by day and moonlight as elected officials in their spare time. They won't be missing any meals!
Edited to add an article:
http://www.nytimes.com/2012/07/11/us/unions-fight-scranton-mayor-after-he-cuts-pay-to-minimum-wage.html