Tentative Nod to a Pay Cut at The Times:
More Job Reductions Planned at Sotheby’s:
The Newspaper Guild, the union that represents newsroom and certain other employees of The New York Times, tentatively agreed Tuesday to a 5 percent salary cut that had been proposed by management. The pay cut, which has already been imposed on nonunion employees of the newspaper, will go to a full vote of the union membership next week. The pay reduction, which began for nonunion workers on April 1, would end on Dec. 31, 2009, the union said.
NC governor cuts pay of state employees, teachers:
Salaries will be reduced for top employees, too, and the company plans unpaid furloughs as well as a reduction in pension contributions for those working in the United States.
Hundreds of Danvers employees accept salary freeze:
North Carolina Gov. Beverly Perdue on Tuesday ordered a pay cut for all state workers in May and June equal to a half-percent of their annual salary as worsening tax collections force her to find about $1 billion more in savings before the end of the budget year in June. (Note: many states are cutting pay to accommodate record revenue loss)
And in Singapore, Layoffs remain companies' cut of last resort:
The employees make up seven of the town's 12 labor unions. Their agreement to forgo an approximate 3 percent raise in the coming fiscal year means no layoffs in their respective collective bargaining units as Town Manager Wayne Marquis scrambles to close a $900,000 budget shortfall.
The unemployment rate was 8.5% in March, up 3.4% since just last year (when the U.S. was already in a recession). Workers are desperate and willing to accept the salary freezes and/or wage cuts. As costs (wages) come down, firms are better able to reduce final goods prices in order to sell their product as demand for their product falls. But then, as prices fall workers are willing to accept lower wages. This is the infamous wage-price spiral.
This time around, even before the National Wages Council (NWC) released revised guidelines in January, many employers had already moved to reduce their wage bills, and staved off (or maybe delayed) the need to wield the jobs guillotine.
Anecdotal evidence suggests that wages and salaries are either falling or frozen - at least mine was in 2009 - but certainly not rising. Although the chart above shows that average hourly earnings are not falling yet, the annual rate of growth is certainly slowing. Wages: just another signal that prices are going down.