How to deal with 23% pay cut

As if the workplace hasn't been interesting enough at the Boston Globe, which had threatened to close, its employees now face the double death watch of having their salaries cut by 23% as their paper is put up for sale.

The New York Times Co. has hired an investment bank to sell the Boston Globe, a move similar to what my former employer, Knight Ridder, did in 2005. The newspaper chain was sold about four months later, and a spinoff and a little more than a year later, I was laid off at one of its newspapers.

The four months or so between the sale announcement and the sale was some of the most stressful, difficult periods of my career, and I can only wish the Globe staff good luck in the coming months.

But their dilemma caused me to think of what they can do -- prepare how best to deal with the 23% pay cuts the newspaper is imposing on nearly 700 employees. The move was announced late Monday night after members of the Boston Newspaper Guild narrowly rejected a contract to cut $20 million through new employment contracts.


While the pay cut will likely be challenged in court, it's likely that some type of pay cut will hit the Globe's employees sometime soon. Many newspapers, even the New York Times, are cutting pay, and the bloodshed isn't ending at the Globe.

After layoffs, work furloughs and no longer matching 401(k) contributions, my former employer -- where my wife still works as a copy editor -- is planning to announce pay cuts within the next few months. It's becoming one way employers can cut costs without having to lay workers off, although they might be done in conjunction.

While I don't know yet how much of a haircut my wife will have to suffer, I don't expect it to be 23%. I can't imagine how anyone could cut almost a quarter of their income. Do you cut your expenses by a fourth? Can your mortgage or rent be reduced by 25%? Cutting expenses may get you there, but trying to cut your boss off at the pass with other ideas is a better solution.

One Web site I found -- Admin Secret -- offers tips on how to deal with pay cuts, but many of the questions it suggests asking your employer sound like they weren't written during a recession. Here are some of the questions it suggests asking your manager, along with my answers based on reality.

How long will the reduction in compensation last? Forever. When was the last time an employer took something away, especially wages, and gave it back as soon as the economy turned around?

Will the decrease adversely affect any of your benefits? This isn't a bad question, actually. But the answer could be, "We didn't think about that, but yes, it will when we cut your health benefits too." For employers looking for areas to cut, health benefits will be next on the list.

Will the decrease be across the board or just within certain departments? Managers will take a 5% pay cut and everyone else will lose 23%. That's about what the Globe employees were told. If everyone isn't taking similar pay cuts, then start looking for a new job.

Are there any tradeoffs to lower pay? You can wash your boss' car. Seriously, if you're taking a 20% pay cut, it's only fair that you work less hours, such as one less day a week, right? Go ahead and ask for it, but don't expect it. It's likely that your boss will still expect the same amount of work out of you, even if you're being paid less.

In a recession, it's rare for workers to have the power to negotiate leaving work early, more vacation days, or better medical benefits in exchange for taking a pay cut. If you can, more power to you. Just let the rest of us know how you did it so we can give it a try.

Aaron Crowe is an unemployed journalist in the San Francisco Bay Area. Read about his job search at www.AaronCrowe.net