Recession tales: The workplace is changing forever
Filed under: Recession
For the 138 million Americans who still have jobs, the recession is changing the way they work.Work furloughs are common, pay cuts are mandated to save jobs from being eliminated, four-day work weeks are gaining popularity, and companies are cutting benefits such as matching 401(k) contributions.
It's enough to make someone quit.
When the 15 million unemployed Americans do find jobs again, they'll return to a workplace that is likely to have grown accustomed to less pay for more work, or at least working less hours in a week. The raises that were once part of an annual employee review, if not entirely gone, will take years to get back to where they were before the recession.
Work furloughs, which equate to a pay cut because workers are mandated to take time off without pay, are popular because they save companies money.But that's not the case at state-run hospitals, prisons and other facilities that are open 24 hours a day in California.
A study by UC Berkeley's Center for Labor Research and Education found that mandatory furloughs of three days a month for California government workers reduced state revenue and increased costs. The furloughs didn't save the state money. The workers who took the equivalent loss of seven weeks of pay saved the state 12 cents for every dollar cut in wages, the report found.
Utah started a four-day work week for state employees as a way to save the government money in overtime pay and energy costs, and the good news was that workers didn't have to take pay cuts or work fewer hours. But they did have to learn the difficulty of working four 10-hour days.
Hawaii recently instituted "furlough Fridays" at its 256 public schools to help the state save money. The shortened school week is expected to last for at least the next two years.
Pay cuts so far in 2009 have been the largest in nearly two decades, according to a McClatchy Newspapers story quoting a government index that shows the real average weekly earnings are down 1.9% since its high point in December 2008. The average workweek is 33 hours -- the shortest on modern record.
But it beats being without a job.
"The ones who have jobs are willing to give up a lot to keep them," Tom McCoy, a compensation consultant at Intellithink, told McClatchy. "They've seen the alternative."
That may be what's keeping the American worker -- whether with a job or not -- from storming the castle and demanding something be done about all of this. Fear. Fear of losing a job, no matter how bad it is, because at least it's a paycheck and expensive health care, and that's better than not having it.
Because after you add on pay cuts, forced days off without pay, eliminate retirement benefits and tell someone to do the work of their buddy who was just laid off, and after you've beaten them down by not giving them raises for all the extra work they do, then you're shooting yourself in the foot.
Because if the workplace is changing, then the American worker is too. They may find that after getting beat up during the recession, they no longer like working for a company that treats them bad when times get tough.
A friend and co-worker who quit his job for a buyout more than a year ago as layoffs loomed, recently told me that at his new job he had to take a companywide 5% pay cut, along with a cut in benefits and increased workload. His wife is unemployed and they have a house, so the extras such as dining out weekly are being cut back.
He rides the bus to work, a vacation was canceled and buying new clothes is something they haven't done in a year.
I doubt if he's going to quit his job when the economy returns and he gets his 5% pay cut back, hopefully along with a raise, but I'll bet he'll look at working a lot differently when things do improve.
Taking everything you can away from a worker when the going gets tough not only strains the relationship, but the effect on the economy may last just as long. The car, vacation and clothes that workers didn't buy because they had to work less and were paid less during the recession won't return as quickly.
The recession, whenever it ends, will have changed the workplace permanently.
Aaron Crowe is a freelance journalist in the San Francisco Bay Area who can be reached at www.AaronCrowe.net
Reader Comments (Page 1 of 1)
11-06-2009 @ 9:15AM
Sam said...
Wow, this article has such a bias against employers. It's like you think we're sitting in our huge corner offices, laughing as we make cuts and ask people to sacrifice to keep the business open.
Seriously, do you think the businesses that are cutting back are doing so to take advantage of the recession, or because they are scraping to keep the doors open?
I know so many business owners who haven't taken paychecks at all, who are going into debt they can't afford, and are behind on their mortgages, trying to keep cash in the business.
This mindset never ceases to amaze me. Earlier this year, I had to make cuts and ask people to work extra hard, and had to take away some time off that they had grown accustomed to. They acted like I was the devil.
I never told them I hadn't taken a paycheck in a while so I could make their payroll.
I'm sure there are some (few) businesses who are abusing the recession, but the majority of us are just trying to survive.
One more thing... that sword cuts both ways. When times get tough, we see which employees are willing to make sacrifices, and which ones complain and gripe and only look out for themselves. We'll remember that after the recession, too.
I tried to stop there, but let me say one more thing. Can we all quit griping about vacations and time off and all that for just a little while? We're in a bad recession! It's not time to sit on the beach, people, it's time to buckle down and get to work! Otherwise, there may not be a company to return to when you're done with your vacation!
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11-06-2009 @ 9:37AM
Lester said...
Sam,
When the going is good, you don't split the profits do you?
No, you give them whats in thier contracts. You insulate them from the good times, yet you refuse to insulate them from the bad. If those workers have been making you a profit for 10 years, you can't claim it's ethical to cut them back at the first sign of a loss.
We're not in the middle ages anymore, in the UK and the EU us pesants get 5 weeks vacation. most other developed countries give 4. We've made enourmas gains in productivity over the last 50 years, yet the worker has seen a steady decline in real wages.
If you want your workers to rise and fall with the business, recruit partners, not employees.
11-06-2009 @ 11:17AM
pk said...
"...They acted like I was the devil.
I never told them I hadn't taken a paycheck in a while so I could make their payroll."
Perhaps you should have.
And out of curiousity: does your business share profits, or simply adversity? I've worked for small businesses with profit-sharing models, and it breeds solidarity like nothing else.
11-06-2009 @ 9:26AM
peeberson3 said...
@Sam
Americans typically work 49 weeks a year. So when you cut their vacation time, they should be pissed. We are not robots. We work so we can enjoy life. So when you cut pay and vaca and ask for more, where is the incentive? Get a new business model.
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11-06-2009 @ 10:33AM
Richard said...
Nothing is forever. When the good times come around again, the pendulum will swing back to the employee's favor.
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11-06-2009 @ 10:33AM
Dianna said...
I agree with the article. I think the recession will permanently change the workplace and for the better. The American Dream is no longer the case in our work world and hopefully we'll be able to adapt the type of living standards exemplified in other coutries that only work to live because they can find joy in their lives.
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11-06-2009 @ 11:16AM
Paul G said...
We already work more hours than people in any other first world country. I myself spent most of the summer working 90+ hours per week. WTF? Are we going to be working 52 weeks a year now?
The whole system is obviously broken, and I wonder if it can ever be repaired.
@ Sam. No, you won't remember who made sacrifices. Company owners never remember things like that. When times are good, you will treat employees in the same way that you do when times are bad: the way that results in the most profit for you.
If a "griper" is a guy who does the job and makes you money, you will keep him and pay him what he demands because he is worth it. Odds are he is griping because you will not pay him what he is worth unless he acts like an asshole.
For the record, I think a lot of cutbacks are due to the fact that businesses are struggling, but I absolutely believe a lot of other cuts are about taking advantage and you are naive to think that this does not occur. Employers have the hammer right now and they are swinging it to give themselves the edge.
Keep it up... but you guys had better make sure you keep us working 24/7. Don't give us time to start building guillotines.
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11-06-2009 @ 1:19PM
kkreft said...
I think North America and Europe has gotten lazy and spoiled. Talk to "the man on the street" and you're very likely to hear them talk as if the world owed them a living.
My hope is that the recession brings back thinking that we have to actually work HARD to make a living, that nothing is guaranteed. And maybe it will force us to stop being such babies about it.
Life is not pretty. Things are tough all over. If the recession can return the boot-strappiness that our country used to have, the sense of self-reliance over dependence upon Big Brother to "take care" of you, then it will have been worth every hardship.
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11-07-2009 @ 7:21PM
Bob said...
Why work for a system that doesn't work for you. Maybe the race to the economic bottom has been won. Maybe small businesses that have gotten away from paying living wages and benefits have reached their inevitable end. Good riddance.
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