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Pay Cuts: America's New Norm

Nine straight months of declining pay sets new record

By Jason Farago, Newser Staff

Posted Oct 14, 2009 7:49 AM CDT

(Newser) – In previous recessions, layoffs were the principal way for employers to cut costs—pay cuts were seen as demoralizing and a sure-fire way to lose workers to other jobs. But now pay cuts, sometimes in the form of demotions or shortened workweeks, are more common than at any time since the 1930s. Production workers, who represent 80% of the work force, have seen their weekly pay decline for nine straight months, setting a new record; the previous record was a two-month fall in 1981-82.

The New York Times profiles one Virginia pilot who was downgraded from captain to first officer, cutting his wages by about 50% and bringing his pay below that of his wife, an elementary school teacher. His pay cut came just as the couple closed on their house, and now their savings are dwindling and they are relying on family members for help. A father of four, he underwent a vasectomy after his demotion: "We could not take the risk of having another child."

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A customer pays for clothes at a Gap store in Palo Alto, Calif. (AP Photo/Paul Sakuma)

Diane Greagor, who works for the Department of Corrections in Rancho Cucamonga, at a demonstration against pay cuts and furloughs at the Capitol in Sacramento, Calif., Wednesday, July 1, 2009. (AP Photo/Rich Pedroncelli)

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What this means 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. - Thomas Nardone, an official at the Bureau of Labor Statistics, on the nine-month decline in production worker pay

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COMMENTS

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Showing 3 of 18 comments

bewilderbeast

Oct 15, 2009 1:06 AM CDT

Disagree, beeman. NAFTA and GATT aren't the problem, just as "free enterprise" isn't the problem. The problem is that no matter what the rules or agreements, they simply are ignored and cheated on by some (the uber-rich). The rules are for the great unwashed, the rich have rules that protect and grow their wealth. America trying to stay out of the world economy is no solution.

Face-Of-RNC

Oct 14, 2009 12:59 PM CDT

Thank you George Bush, and your predatory capitalism.

Snarfeh

Oct 14, 2009 8:52 AM CDT

@schmidtkoff - Just like politics, eh? What they say and what they do is never the same....what applies for them never applies for us. Time for a revolution if we can all get away from the internet long enough....then again, maybe it should be *via* the internet...

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Pay Cuts: America's New Norm