Dean Dad had a post last week that looked at the staff side of the equation during this economic downturn. I lived through a downturn during my first years as a staff member and saw 30 people get laid off. In many departments, this meant a 20%-30% cut in their staff, meaning that the rest of the people were doing at least 20-30% more work. While there were a handful of departments where demand had declined and therefore layoffs were a reasonable action to take, this was a rare situation. I'm away from the scene now, but my understanding is that only a couple of people have been let go and that positions vacated via attrition (like my own) are not being filled. As with layoffs, the effect is the same; people having to pick up the slack.
As Dean Dad notes, the work of staff is often invisible. Unlike not having enough sections of comp to fill demand, no one readily notices if the student services office is understaffed. In many cases, service simply slows down, with requests taking longer to get filled. In some areas, such as the IT side of things, a major crisis can bring a department to its knees when understaffed, causing a ripple effect across the campus (no email for days, files inaccessible, no one answering phones). But everyone crosses their fingers that that crisis never comes. The irony is, it's more likely to happen when you're understaffed because people are often harried and therefore more mistake prone.
The thing that is incredibly frustrating to me is the way in which the mission of many colleges, including my former employer, is so at odds with their actual employment practices. They talk a good game of social justice and fair employment practices, but it's all theory. They're fine with hiring adjuncts or having dining services employees who are not making a living wage. At least in most corporate environments, they make no bones about the fact that they're trying to make money and that one way to do that is to keep wages low. Corporations that do having excellent employment practices are often applauded and win awards. There are certainly many benefits to working in a university environment, where one often has access to classes, lectures, and often ample vacation and sick time, but all that means little if you're too overworked to take the time for them and/or not making enough money to make ends meet. Sadly, most faculty have no clue how much their staff members are making or what their benefits are. If you're a faculty member, I encourage you to a) find out what the living wage is in your area and then b) find out if your lowest paid employees are making that wage.