December 23, 2008

Are the across-the-board salary cuts coming?

Here's the choice:

A) Keep your job, but 40% pay cut

or

B) Set of steak knives and the door

51 comments:

Anonymous said...

Across the board salary cuts are not inflationary.

Carry on.

greg said...

I'll take the steak knives.

steely damn said...

There will be mandated changes in salaries, but they won't be cuts. The government will institute wage and price controls (they always do) and one of the ways to "fix" the consumption problem will be mandatory wage increases across the board.

The implementation will likely be ham-handed and won't work very well, but that has never stopped government apparatchiks in the past, has it?

Guberville Smack said...

After all these bailouts, if the middle class would have to take a 40% pay-cut, there might very well be some lynch mobs headed to Washington. the only reason there has been no outrage, is the average Americano still has two cars in the garage and a wide-screen TV.
Anyway. I would walk out the door, because 40% off would be about 6 months unemployment money.
Why work if I could watch WWF, smoke crack, and do side jobs under the table?

foxwoodlief said...

If pay cuts are coming, it should be at the top! It is disgusting that tax payer money is going for bonuses for people in companies we bail out. The argument that "we need to keep good people." is %($*#. Where are they going to go? And if they were so smart and good, why did they cause their companies to fail? They should be penalized, not rewarded.

Anonymous said...

Don't know what you are talking about. Just got 2 pay increase. Yes really, I'm counting my blessings this season. Lots of people I know are getting killed, they set their lifestyle at or above their top income and now they have not worked in months.

foxwoodlief said...

If pay cuts are coming, it should be at the top! It is disgusting that tax payer money is going for bonuses for people in companies we bail out. The argument that "we need to keep good people." is %($*#. Where are they going to go? And if they were so smart and good, why did they cause their companies to fail? They should be penalized, not rewarded.

Anonymous said...

Booooooooosh and King Hank steal 300 billion on the way out the door. Every one else, take that cut, starve bitches. That's right boys, keep it up. Keep pushing the dumb animals into the corner.

The new world order elites will end up on the menu, Obammmmmmmy and Hitlery included. Keep Puuuuuushing.


The magic popcicle will save us all.

Anonymous said...

Don't know what you are talking about. Just got 2 pay increase. Yes really, I'm counting my blessings this season. Lots of people I know are getting killed, they set their lifestyle at or above their top income and now they have not worked in months.

Anonymous said...

Farmers Insurance discontinued their "profit sharing" program.

It basically was a 10-15% yearly bonus.

They've got over 20,000 employees I believe.

Owned by Zurich Financial.

Anybody know the ticker symbol for Zurich Financial Services? About a dozen choices come up on yahoo services.

Lady Di said...

A.) Keep the job until I find a better paying one then give said employer Das Boot.

Nimesh said...

Folks, I am in the deflation camp. Salaries along with assets, goods and services will go down. People will be shocked to see that ultimately in order for a company to survive, they will have to drop prices and this in turn will push wages down.

Nick, we Fucked Savers as you like to call us have finally won. We won! Cash will be king and cash will be worth a heck of a lot more (even if banks will pay 0% interest rate)because asset prices will come crashing down.

A good book to read is Conquer The Crash (I forgot the author's name). But read it and he makes a good argument why we are headed towards deflation.

Wind Farmer said...

Am I a Union Worker?
If you even try to cut my pay, I'm gonna sue!

Anonymous said...

This is pretty cool:

Here's Max Kaiser Predicting the Collapse of Iceland's Economy

Good stuff!

Pay Lay Ale said...

Keith, you seem to have a split personality disorder. One minute you're talking about a hyperinflation holocaust. The next minute you're talking about 40% nominal pay cuts (deflation)?

Anonymous said...

Where's the door?

Next stop, unemployment office for 52 weeks of paid vacation.

Oh Yeah, call me when that little ticking timing virus time bomb shuts the place down for good.

For the Right Money, maybe I can get you back up again? I said, maybe.

Bring Cash.

Fuck You America. remember 2000?

Mammoth said...

The small family-owned medical equipment firm where I work was sold to a corporation two years ago. Yesterday at work they called everybody (about 75 of us) to the front office for an ‘announcement.’

We were all told that due to the current economic climate and the projected drop in revenue for next year, there will be no annual pay raise.

This is one result of all the speculation and greed that manifested itself in the real estate bubble. So, with inflation having taken a bite out of my earnings (sorry, but insurance, medical care, and food prices are NOT deflating), plus the possibility of layoffs next year, I am not in the mood to gamble in the stock market at this point in time, nor am I in the mood for spending money on anything but the essentials needed to get by.

Now, multiply these sentiments by 100,000,000 and you will understand why the stock market is not going to roar ahead and also why we have not hit bottom.

So, to sum it up, now is not a good time to buy.

-Mammoth

P.S. Note that this firm makes medical equipment, and not consumer discretionary crap. So if the projection for something like medical equipment sales is to crater next year, this does not bode well for the general economy.

Anonymous said...

In Portland, Oregon in the Great Depression, the Bureau of Waterworks put people on part time so more would keep some kind of job, rather than some keeping all, and some losing all.

You can tell the times when that seems fair, because everyone recognizes there are few chances for the unemployed to find a job.

grandma pkk

i've had it said...

the only people facing 40% pay cuts are those in finance. my bet is that they would gladly take that cut over the steak knives since they are simply unqualified for any other type of work.

their skills are not transferable to other industries and most of these people will go into a new finance business for themselves, become consultants, retire, or open up small stores, like making and selling cupcakes, trinkets, bread, etc. that's about all most of them can do. the younger ones are in a better position that the older ones because of their age and because they don't have a long track record, so they are more changeable than, say, a guy who has 25 years in m&a or structured finance behind him.

also, non-finance companies would just fire people before even getting close to considering a 40% salary reduction. i know i would.

Paul E. Math said...

There is an option c that will play out as well. Option C has 2 parts:

1) salary freeze even if you've received a promotion

2) bonus is reduced or removed

Both of these have been implemented at my employer, who is a wholly owned subsidiary of one of the largest financial institutions in the US.

My utilization rate was above target but my bonus was reduced. And my bonus can be as much as 16% of my salary. Others who have spent some time on the bench will receive very little bonus at all.

But this is actually a good thing. Much more widespread use of bonuses in compensation structures give employers much more flexibility to adjust to changing conditions. Reduced compensation will have a smaller negative effect on the economy than widespread unemployment. And it is better that companies can survive through reduced labour costs where once bankruptcy was the only option.

My worry is that executives will continue to award themselves high bonuses and bonuses for peons like me will be very slow to grow even after the economy recovers.

But that's what it's like to live as a slave.

boowho said...

talk about a big negative bubble:

"WASHINGTON - President George W. Bush signed legislation Tuesday that frees businesses from having to pump billions into pension plans in the coming year, another sign of the nation's deepening economic crisis."

http://www.startribune.com/politics/36633494.html

Tyrone said...

I'll take the pay cut.

One month ago I said to a buddy we'll probably have to take a pay cut at some point. It's probably a year away, but it will come. In the meantime, I'm recording comp time and OT; I don't normally record OT, but I'm taking everything I can get right now. The idea of buying gold and silver with OT dollars makes me feel good.

David said...

Well, it's not people leaping out of windows, but the first Wall Street titan to commit suicide because of massive losses just came over the wire: http://bit.ly/nluY

The head of Credit Lyonnaise desk in N.Y. just slashed himself to death, with a trash can there to helpfully catch the blood. He is the first I've heard of to take "the honorable way out." Unfortunately, De La Villehuchet was a victime - as are so many of the rest of us. Meanwhile, the actual crooks - the Mozilos, the Cheneys, the Bushes, the AIG & Citi boards, they all prop their feet up on their desks, puff cigars, and chortle as they watch their handiwork bring down Western Civilization.

1929 is here.

too much debt said...

So do all the goings on in the last year mean that the boomers aren't going to sell their overvalued homes and stocks to the x'ers then party party thru the golden years?

Abraham said...

If you are being offered that much of a cut, then you are in big trouble.
I ran some numbers for the next year, and you're better off with the cut if you can't get a job within 3 months with a pay at least 80% of your current salary.
Assuming the whole industry is in that bad shape, a new job would be less posible.. so may be you are good with the cut (and ask for the knives anyways). It may come with future rewards for being a martyr in hard times.

Batman said...

I think we're all getting salary cuts in the form of inflated currency soon.

Anonymous said...

I work at a mid-size company (about 800 employees) in Silicon Valley. Two weeks before Christmas we were told that we all had to take a 12% pay cut. If we were unhappy with that, we were free to resign. Our CEO went on to say that there were no jobs out there so it would not be very wise to quit...

arnold said...

The state of california should cut state pay and fire some people.

Anonymous said...

Can't say anything bad about it. Worked in US Aerospace in the early 90's and I took a 20% hit while one million aerospace workers got laid off after the fall of the Berlin Wall. I was one of the survivors - afterwords,made a lot of money on my 401k, retired with a pension and got medical plan. In the long run was worth the sacrifice.

gutless and lazy said...

C) Off topic, but this is really sure to get Keefer's attention!!


Bush pardons mortgage fraudster who escaped restitution
John Byrne
Published: Tuesday December 23, 2008



Print This Email This
Father gave $28,500 to RNC this year

President George W. Bush has characterized the recent US housing crisis as a product of greed and Wall Street excess.

But that doesn't seem to have been Bush's opinion when he pardoned Isaac Toussie, 30, of Brooklyn, the son of a New York real estate developer, who defrauded the Housing and Urban Development Department government for millions of dollars and pled guilty to inflating the incomes of at least 100 families to make them eligible for federal loans in the lead-up to the worst housing crisis the United States has ever had.

ARE YOU GETTING ANGRY YET AMERICA??

Mike H. said...

Keith,

Not sure if you realized it but you just made a great argument FOR deflation.

Benny and the inkjets will try and fight this as hard as they can but it will take a while to turn this deflationary spiral around.

In my company I am cutting 55% of my staff (450 people) and considering wage reductions - at a minimum there will be no salary increase next year.

Multiply this times several thousand and you wind up with massive deflation in the economy.

Gonna get worse before it gets better.

-Mike

Mike H. said...

I wonder if Social security and pensions will see a drop in annual payouts given the across the board deflation that's taking place? Maybe a good time for the state of California and others to cut wages and benefits to their state workers and people on pensions. Like a negative Cost of Living Adjustment.

-Mike

Enorah said...

The other night I had a dream

I was working for a company and they called us all in and told us we would be getting a 50 percent pay cut in 2009.

I was like, "I am so out of here", in the dream.

Anonymous said...

40% is a bit excessive. 10 to 20% will be the average, me thinks.

10% salary cut is the equivalent of taking two unpaid days off a month.

20% would be a 4 day work week.

Hey, maybe we will get a 4 day work week after all. the experts have been talking about the 4 day work week for decades.

isn't that how the french solved the unemployment problem? have 4 people switch to 32 hours a week, thereby creating another 32hour a week position, increasing the number of jobs by 25%!

maybe that is how BO is going to create (or save) 3 million jobs!

wow, I may be onto something.... the federal government employs about 15 million people. have all of them switch to 4 day work weeks and use those saved hours to hire more federal employees!

15 * .25 = 3.75 million new jobs!

Anonymous said...

The small technology company I work for (25 people), is cutting salaries of all employees by 25% starting Jan 1.

gutless and lazy said...

The are for GM, F workers. I guess that's how industry figures how it's gonna solve the housing crisis. Force workers to take even lower wages and force that many more into foreclosure.

Only in America.

barney jones said...

RE: "Keith, you seem to have a split personality disorder"

isn't what Keith's talking about called stagflation since there are too many goods and too many dollars?

Bukko_in_Australia said...

I'm getting a pay RAISE of, I think, 3% next year. (Sorry if it seems like bragging, but I don't pay that much attention to my salary because I'm fairly well set financially. I mainly work to enable me to stay in the country as part of the terms of my visa.)

Our working conditions have improved, too. On the morning and afternoon shifts, management has added an extra nurse to our crew. Now we have 10 nurses to watch over 30 patients (sometimes fewer) on the ward instead of the nine per shift we had before. My job is SO easy, and it's getting better!

You know why this happened? Because we're unionised. There was an "industrial action" last October when we didn't do a full-on strike, but "closed beds" (i.e. refused to take additional patients) in support of our demands. The state government mostly complied. That might get your goat, Keith -- militant workers making demands of the taxpayers in a socialised medicine hospital.

Let me tell you what the taxpayers get for that, though. Pardon me for crowing, but I'm damned good at what I do. I've been on this job three years, and I was a nurse for a dozen years in the U.S. I'm one of those people who knows what it means when someone's breathing starts going off, and where to find the equipment like IV pumps in a pinch, the correct dilution factor for that antibiotic powder, etc. Most of my fellow union nurses are similarly skilled, because our hospital is known as a better place to work than the private-insurance hospitals, where they stretch the nurses harder and pay them less. So we get the best.

And because we're so over-staffed, when a patient gets on their call light, we get to it quickly. If someone's in pain, we have enough nurses to fetch them a syringe of morphine post haste. We make our rounds regularly so that the demented, bed-bound patients are not lying in their own shit and piss for hours at a time. That way, their crotches don't start rotting with bedsores, sores that would cost the medical system more money in the long run, to say nothing of the pain they cause the patients.

Yes, life is still good for me, because I'm union. And I posit that it's good for Aussie society as a whole. But I'm mainly happy for me. Happy Christmas!

Anonymous said...

Wify took a 5% haircut this month already. She NEVER had a pay cut in her working life. Your pay cut is on the way, no doubt about it.

Mike Hunt said...

Such an appropriate post Keefer.

We have 900 people in our company- with lower sales I ran the numbers with us laying off 500 people- we are still far from profitable. I will do the layoff and also implement a 15% salary cut for all staff including myself.

At least until sales pick up again.

People won't be happy but this isn't about maximizing happiness... it's about survival.

15% salary cut still better than no salary at all, right?

Mike

Anonymous said...

Noodles-

To the RN bragging about how good they have it...Wow!

people like you make me glad this shit will crumble and although your skills will be needed you lil sassiness will go down as you hide in your home because of crime, as hours get cut and workload expands when the state finally says fuck you...I'm a state cop for Cali and we're sinking same will happen in Oz they're just 8 months to a year behind us...So as far as the bragging...May you get exactly what you deserve. :)

Anonymous said...

I work for a mid-size Silicon Valley technology company (800 employees). 2 weeks ago, the CEO announced an across the board pay cut of 12% for all employees (and obviously, no bonuses for the foreseeable future). Deflation has certainly hit me.... Meanwhile, my tax dollars are used to subsidize bankers and car makers...

Anonymous said...

Waah waah waah, quit your whining losers. Most of you would still be overpaid even after a 50% pay cut. Face it, the average Americano worker is lazy and useless, and does a job that a well-trained chimp could do. You losers should be happy to even be working. There are millions of people in the developing world who are better educated, more motivated and will work for a fraction of what your worthless Americano asses are currently getting paid. And someday soon they're gonna have your job. God bless globalism! Die you worthless Americano pigs!

dwr said...

"Keith, you seem to have a split personality disorder. One minute you're talking about a hyperinflation holocaust. The next minute you're talking about 40% nominal pay cuts (deflation)?"

It's pretty easy to predict everything that actually happens when you've made contradictory predictions on every topic, isn't it?

Bukko_in_Australia said...

How are you going, state cop in Cali? One thing you probably can't wrap your head around, as you predict me hiding in my house as crime goes out of control, is that other societies are not as violent as the United States. Gun ownership here was severely restricted after a massacre in Tasmania in 1996, so Oz is a safe place.

When you live in the U.S., as I did for the first half of my life, you take for granted the fact that everyone around you could be carrying a gun and that savagery will prevail the second that the power goes out. It's a given, like "There's air to breathe. I could be gunned down at any moment."

But other countries aren't as rapacious as the U.S. As a whole, people in Australia lack the mean streak which you hope will play out when the crisis hits here. They're as drunk as Brits get, but Aussies are happy drunks instead of surly ones like in the land where their culture came from.

Your attitude of "I hope you suffer too" reminds me of why I don't like most police officers. You hate us "civilians" don't you?
Police regard everyone as a potential perp, someone who should be beaten down if they step out of line. I can see why you'd get that way, because the U.S. is a law-breaking society. But you're the hard fist of a sour nation.

Other nations are, as Michael Moore put it, "a WE society" instead of a "ME" society. The U.S. used to be more on the "we" side, at least in its official ideology. But somewhere between the JFK assassination and Ronald Reagan, it got selfish and nasty. It's a damn shame, because America could have done better.

To toss your own words back at you, I think the U.S. is going to get what its worst citizens deserve. Too bad the decent ones are going to get it as well.

Anonymous said...

The company I work for just announced that they are no longer doing any more 401k matching contributions...

No need to contirbute to the 401k anymore folks... No more free money. And when layoffs happen, Ill be dumping my 401k and taking the cash/penalties because Ill be needing the cash to live on.

Anonymous said...

The dumbing down of America has been completed.

Anonymous said...

"Keith, you seem to have a split personality disorder. One minute you're talking about a hyperinflation holocaust. The next minute you're talking about 40% nominal pay cuts (deflation)?"

It's pretty easy to predict everything that actually happens when you've made contradictory predictions on every topic, isn't it?
---------------------------------


geez, what a bunch of morons. Keith has been talking about deflation followed by inflation for a while now. he does talk more about inflation but that is probably only because we are in deflation right now and inflation is the next event everyone should get prepared for.

Anonymous said...

Noodles-

To Bukko-Lets see as things get worse for the average person/civvie instead of holding on to your good luck and not being rude about it you brag about it and I'm the bad one?

Me I'll get by...As you well know we do ok as cops and God knows we're armed.

How about if I put it this way?

I found your statement to be rude, selfish and uncaring for the poorer, not as well protected people...The old, the sick, the very young, single moms and yes even pets.

In bad times alpha males are needed to clean up the messes so I'll be okay...We are those black booted thugs that comes for you if you fuck up.

But I did grow up poor and from a single mom and your tone sir is that of a pretentious asshole...Pray for the weak...Not brag about your great luck as people suffer.

Be thankful not boastful...That's why I got mad...Not jealous of anything material...Been rich, been poor.

Just you sound like that guy at the party no one can stand.

Bukko_in_Australia said...

Thanks for your civil reply, Noodles the cop. Sorry to come off as crowing, mate -- I only half-meant it to be that way. Living in San Francisco, even for only three years as I did, can start turning one into a self-satisfied smughead as satirised in "South Park." Even worse, I drive a Prius down here! (Although we owned a bright-yellow Mustang GT and a 1987 Fiero GT in S.F. Got lotsa speeding tickets from your mob, too.)

I also wanted to convey the fact that not everyone is getting hammered in the downturn, especially those with the protection of a union and a government job. As I know Cali. Highway Patrol officers have. So you'll do OK -- just fewer OT hours.

I do give a thought to the poor and sick, since it's my job to keep them alive. And at parties, I'm the one that keeps everybody laughing with snark that takes the piss out of the government and the medical system. I'm a cocky bastard, but with good reason.

Anonymous said...

To Bukko-

Fair enough and best of luck...If you see a cop in riot gear wacking looters and he waves to the camaras...Wave back it might be me! :P