Pay Cuts Spreading As Economy Worsens

(CBS)  We hear almost daily about companies cutting jobs as the recession deepens, but another kind of cut is being used more and more to help save jobs: a pay cut.

A growing number of companies and government agencies are reducing workers' pay -- sometimes drastically -- rather than trimming payrolls, CBS News correspondent Bianca Solorzano reported on The Early Show. Others are turning to furloughs -- forced, unpaid time off.

"Companies are trying all sorts of new things to not actually cut heads at this time," BusinessWeek Senior Writer Michelle Conlin told Solorzano.

Pay cuts are catching on in different industries around the country. Companies such as Federal Express, Scripps Media, Hewlett-Packard, Ford and General Motors are among those going down that road.

Pilots at many major airlines are feeling the pay pinch too. Even Money magazine Senior Writer Donna Rosato told co-anchor Harry Smith on The Early Show that a pay cut doesn't have to be the end of the story.

"One of the things you might think about doing," Rosato says, "is talking to your employer and saying, 'OK, I'm taking a pay cut. Is there something I can do to make this work for me, as well? I'm taking a pay cut. Maybe can I work a few less hours so I could maybe work part-time or pick up something on the side?' So, I would be careful. We should all be glad to have jobs these days, of course, but if you're going to take a cut in pay, see if you can negotiate a corresponding cut in hours that can give you some time to allow you to pick up some side work."

Having a strategy can help, she says, adding, "People know when their company's in trouble. You may go to your company and suggest, say, 'I know things are bad,' and you may think that they're going to cut your pay or maybe they think about laying you off. If you offer to take a pay cut or reduction in hours, one of the things you can offer to do is perhaps take some of your compensation in bonus. So that's a way for you to reduce maybe not your base salary, but the overall cost. And that could be a negotiating point, as well."

Rosato suggests trying to "reinvent" yourself if you see the writing on the wall about a possible job loss, pay cut, or reduction in hours. If you're furloughed, "You may be out of work for a week or two. Make the most of that time to ... update your resume, maybe take some training courses, network with people, find out what other opportunities are out there."

You could also try to make yourself indispensable to your employer. "It may feel like you're not indispensable when they're cutting your pay," Rosato acknowledges, "but this is also an opportunity, when times are tough, it's better than being laid off. And because they have fewer people, this is the time you want to take on more responsibility at work. And because there are fewer people on the job, you can make yourself more indispensable."

[auntc3]

If they are cutting pay checks, then it is TIME to bring down prices....if we are in a recession or depression, prices are suppose to come down to. Trouble is Buisness is ignoring the fact that we are in tough times...they better WAKE UP. Cut prices or you will fold as a Company.

[cbsblogger]

It is time for government employees to take pay cuts and pension cuts and get into the world of reality that the private sector has faced. Private sector employees have had contracts in place and that didn't prevent them from facing pension and benefit cuts, and the government employees (including elected ones) need to face the same. It is either take pay cuts and wage freezes and subsequent reductions in pensions or America goes broke and government employees face mass layoffs.

Another thing. We need to reinstate the marginal tax rates that were in effect during the 1950s adjusted for inflation. That means a CEO or athlete that earns over 2.5 million will pay 91% on earnings over that amount. It worked in the 1950s to contain CEO compensation and it will work now.

[jlriesbeck]

How about ALL THE POLITICIANS AND GOVERNMENT EMPLOYEES, taking a PAY CUT? Cut them down to $800.00 to $1200 dollars a month, like us people on Social Security. Many of them has electric bills, telephone bills, and cell phone bill, that are more than that! Each one of their kids are probably running around with cell phones, paid for by the taxpayers. HOW ABOUT ALL YOU GOVERNMENT PEOPLE, (Except the military, God Bless all of our Military people), SET AN EXAMPLE FOR THE REST OF US regular Americans, suffering through this Recession. TIGHTEN YOUR BELTS, learn to eat Chicken Baloney, like the rest of us. Am I getting through to ANYBODY?
Posted by aztecdakota at 9:28 AM : Feb 26, 2009

Aztecdakota, I believe you are forgetting that government employees include teachers and other positions that are not highly paid.

[aztecdakota]

How about ALL THE POLITICIANS AND GOVERNMENT EMPLOYEES, taking a PAY CUT? Cut them down to $800.00 to $1200 dollars a month, like us people on Social Security. Many of them has electric bills, telephone bills, and cell phone bill, that are more than that! Each one of their kids are probably running around with cell phones, paid for by the taxpayers. HOW ABOUT ALL YOU GOVERNMENT PEOPLE, (Except the military, God Bless all of our Military people), SET AN EXAMPLE FOR THE REST OF US regular Americans, suffering through this Recession. TIGHTEN YOUR BELTS, learn to eat Chicken Baloney, like the rest of us. Am I getting through to ANYBODY?

[blueberry49]

First of all, I'm a government employee AztecDakota. I am the only one working and one of my pay checks is well below $1200 bi-weekly. I work and do not get SS checks. My wife has been unemployed for almost two years now with her two Associate Degrees and a Bachelors Degree; still she has not found work. I have no cell phones. If government employee?s children run around with government cell phones, that?s against the law, report it, same thing with government vehicles.
We have a family of five and I pay child support on time from a previous marriage. Hypnotically speaking, if this (pay cut) were to happen; we would not be able to pay our bills, buy food, medical, child support and we would be thrown out since I can't pay my rent. We would be living in a tent. Thanks for doing that you us.
I pay my taxes every paycheck and every year I pay my federal and state taxes just like every one else.
Since you are on SS checks and have a fixed income, may I ask if you paid into a retirement plan when you worked? If not, why? If so then you may need to work part time if you can find a job or if you are able. I know I will have to work part time when I retire, since my SS check will not cut it. That's why I'm aiming to pay off as many bills as soon as possible. Think before you speak, AztecDakota.

[architekker-2009]

America, Obama is pushing to let the stock market to take a nosedive then restart the economy. Everyone will have equal pay or equal wealth. I think you all are screwed!

[john878]

Paycuts?!?!? LoL I guess it all depends on WHO you are.

Right now CEO's are scheming on how to get around the ?bonus ban?, so they have come up with ?Retention Awards?.

http://www.brasschecktv.com/page/565.html

Ok they say we HAVE to save the banks, but do we need to save the management too?!?!?

If we can outsource all our other labor, I don?t see why we can?t bring in foreign CEOs & management to cut costs, since they don?t seem to be able to do it.

Let?s get rid of the problems BEFORE we try to fix the banking system, then maybe less people will need to endure a big pay cut.

[sockpuppet4]

Without a union base no one will even make minimum wage. Those hippo crit republican prance around and say oh i get high pay coz i worth it. lol. They get didily now coz they not worth it in reality. They worth same as chinese. Let them eat rice and cry away there errors now.

Those bush cheney republican ruined the united states. God will punish them for sure coz of there lusting greed for dollars. They all selfish gluttons want everything for themselves.

[ubrew12]

mrs_nesbitt said: "No. Cutting the pay of executives would amount to socialism. "

And we only practice socialism when companies are losing their shirts. Like now.

[mrs_nesbitt]

I hope Obama's plan will help us - I KNOW GOD WILL!
Posted by cheri4ell
==========================
Hopefully God will help you. Remember though that being unemployed does not excuse you from your responsibility from giving to the church. If you dont continue God will only send you pestilence.

[rushlimpdrug]

Here is an idea:

How about the president and congress be TRUE leaders

Have THEM take pay cuts.

Have THEM show us that THEY are also sacrificing something
during these hard times.

This is an idea that I hope will catch on.

We ALL need to suffer together.