pay cuts

Posted: March 7, 2014
By: Clay Cerny

In the April issue of Psychology Today, Joann Ellison Rodgers reports on new psychological research on anger.  Traditionally anger has been seen as a negative emotion that hurts both mental and physical health.  Rodgers cites several experts who have found another side of anger.  They argue that anger can lead people to make changes. People who are upset are more like to try to change something.

This article made me think about many of the clients I’ve encountered over the last ten years.  Of those who were currently employed, most had some grievance against their company or boss.  Since the Crash of 2008, many clients have made me share their anger by telling stories of increased workloads that are reward by salary freezes or cuts.  One of my recent clients is a production manager who also has a sales function.  Last year he put in extra hours to help the company where he has worked for more than 10 years.  While maintaining all of his production duties, he also doubled his sales numbers.  He expected to receive a bonus at his annual review in December.  Instead, the owner told him “times are tough” and cut his pay by 10%.  That made him angry enough to look for a new job.

His story makes me angry as well, which is why I’m telling it.  Too many people are working too hard and not being properly rewarded.  That’s why many workers in the U.S. are very, very angry.  Hopefully, they will come together and change things to make their lives better.

Posted: February 18, 2014
By: Clay Cerny

Huffington Post reports that American list unemployment as the most important problem facing the country.  According to a Gallup poll, 23% of American feel this way, which is up 7% from last month.  While this information is interesting, it only reflects what people think, not economic realities.  Clearly unemployment is a problem, a big one.  But I don’t think it’s the most serious.  Most Americans are still employed.  The bigger problem is that their pay has been flat or cut.  Employers have increased employees’ contribution to health care, or they have stopped matching payments into retirement plans.  For many low wage workers, employers have moved to a contingent labor model in which workers are scheduled on an as-needed basis.  All of these people are working, but they feeling like they are falling behind.  We know what unemployment is, and economists have a way of measuring it.  What we need is a way to measure underpayment.  That’s the real problem.

Posted: September 18, 2013
By: Clay Cerny

A client told me a sad story today.  He has worked for a large retail company as an Assistant Manager for over 8 years.  He currently makes $25 dollars per hour in a managerial role.  Next month his position will be eliminated and replaced by one making $11-$14 dollars per hour.  In addition to this big pay cut, the company is increasing the position's responsibilities.  My client could not accept such a demotion, and he gave notice.  Some would say that no one should quit a job before securing another.  Given the changes in his company, my client felt he had nothing to lose.  He is confident he can find a job that will pay him more than $14 per hour.

This story surprised me only in the degree of the pay cut.  Since 2008, clients have told horror stories about pay cuts, furlough days, changes in commission, and increased health care contributions.  While pay increases go to the top of the income scale, the middle class and lower wage workers keep facing greater and greater stress.  This trend cannot continue, or we will learn what our grandparents and great-grandparents went through in the 1930s.  "Brother, can you spare a dime?"

Posted: August 3, 2010
By: Clay Cerny

Steven Greenhouse reports in the New York Times that many governments are asking employees to take pay cuts rather than furlough days.  Many companies are doing the same.  I hate furlough days because they nothing more than are rolling layoffs.  They do have one benefit – time off.  Pay cuts require employees to work the same amount for less money.  I’ve heard several stories of pay cuts from my clients, and it is often the middle level workers (managers, administrative assistants) who take the biggest pay cuts. 

Who doesn’t take a hit?  The people at the top.  They still get bonuses.  If they are let go (like some executives at Tribune Media may be), they are given “golden parachutes.”  John Edwards may be a jerk, but he was right about “Two Americas.”  Most of us are living in the America where life is getting harder and less secure.  For the lucky few, America is still the land of opportunity (the opportunity to feed off your fellow citizens like a blood-starved vampire).

Posted: June 30, 2010
By: Clay Cerny

The Daily Kos’s Meteor Blades has written an incisive post on how working people have suffered in this recession.  Beyond the millions who have lost jobs, millions more have taken cuts in pay or hours.  Others can only find a part-time job to replace (only in part) a full-time job.  Blades also looks at recent job growth (very slow) and the factors that may keep it this way.  This article is worth a read.

Posted: June 15, 2010
By: Clay Cerny

The Sun-Times reports that employee contribution to health care will increase 9% next year.  On top of that, many plans will ask employees to pay more for co-pays and deductibles.  Some employers are moving to plans that require employees to pay deductibles rather than co-pays, which means more up front costs will be placed on the employee.

I’ve written about salary cuts, furlough days, and other changes in compensation.  Whenever an employee pays more of her health care costs, there is less pay to take home.  The employer shifts costs to the employee – that’s a pay cut.  Death by a hundred pay cuts.

I could not find a link to the story in today's Sun-Times.  It was on page three of the print edition.