All Fools Should Prepare for 50% Paycut/Income Loss
Still on the Job, but at Half the Pay
MECHANICSVILLE, Va. — The dark blue captain’s hat, with its golden oak-leaf clusters, sits atop a bookcase in Bryan Lawlor’s home, out of reach of the children. The uniform their father wears still displays the four stripes of a commercial airline captain, but the hat stays home. The rules forbid that extra display of authority, now that Mr. Lawlor has been downgraded to first officer.
He is now in the co-pilot’s seat in the 50-seat commuter jets he flies, not for any failure in skill. He wears his captain’s stripes, he explains, to make that point. But with air travel down, his employer cut costs by downgrading 130 captains, those with the lowest seniority, to first officers, automatically cutting the wage of each by roughly 50 percent — to $34,000 in Mr. Lawlor’s case.
In recent decades, layoffs were the standard procedure for shrinking labor costs. Reducing the wages of those who remained on the job was considered demoralizing and risky: the best workers would jump to another employer. But now pay cuts, sometimes the result of downgrades in rank or shortened workweeks, are occurring more frequently than at any time since the Great Depression.
State workers in Georgia are taking home smaller paychecks. So are the tens of thousands of employees in California’s public university system. The steel company Nucor and the technology giant Hewlett-Packard have embraced the practice. So have several airlines and many small businesses.
The Bureau of Labor Statistics does not track pay cuts, but it suggests they are reflected in the steep decline of another statistic: total weekly pay for production workers, pilots among them, representing 80 percent of the work force. That index has fallen for nine consecutive months, an unprecedented string over the 44 years the bureau has calculated weekly pay, capturing the large number of people out of work, those working fewer hours and those whose wages have been cut. The old record was a two-month decline, during the 1981-1982 recession.
“What this means,” said Thomas J. Nardone, an assistant commissioner at the bureau, “is that the amount of money people are paid has taken a big hit; not just those who have lost their jobs, but those who are still employed.”
IF YOU ARE NOT PREPARED FOR A 50% PAYCUT....YOU ARE NOT PREPARED!!!!!!!
Why do you think Alstry has been focusing on restructuring debt....if you only bail out the bankers and cut the wages of the people, it will not be too long before the bankers own the people....and government too due to evaporating tax receipts.
If wages, factoring unemployment, shrink 50% in a service economy.....you have a pretty good idea that GDP will shrink 50% or more as well....think about that and trying to service $50 Trillion of debt at current interest rates plus rising taxes and government fees????
The real problem comes in with businesses and government...it will be very difficult for gov/biz adjust for a 50% decline in revenues without massive convulsions based on legacy and rising cost structures.......
We are now in a Catch 22.....crashing wages, high unemployment and rising expenses......unless we restructure soon, we are facing MASSIVE failures ahead due to impossibility of servcing interest on massive debt consuming much of the cash flow of the nation.
And with only a few trillion in the bank with tens of trillions of debt.....there is not enough savings to even come close to alleviating the problem without massive amounts of credit being extended at much lower interst rates than currently being charged on existing debt.......