Tuesday, December 23, 2008

Frozen Wages

by Bill McBride on 12/23/2008 09:14:00 AM

IN addition to more part time workers, freezing wages is becoming a common theme (hat tip Brian):

From Reuters: U.S. manufacturers cut jobs and pay amid downturn

According to the employment consulting firm Watson Wyatt, 11 percent of all the companies it recently surveyed either already had cut wages or planned to do so over the next 12 months, and 10 percent either have reduced their employer 401(k) match or planned to do so.

"Companies are trying to do things that are much more thoughtful as opposed to just, let's take 10 percent of the work force off," Jeffrey Joerres, chief executive of Manpower Inc, the world's No. 2 staffing company, said in a phone interview.
From Cincinnati.com: No pay raise for salaried Duke workers
Between 1,500 and 1,700 employees of Duke Energy in Cincinnati and Northern Kentucky are included in a salaried employee wage freeze announced by the utility last week to help cope with the recession.

About half of the Charlotte, N.C.-based company's 18,000 employees are included.

Duke said it was freezing 2009 wages for managers, supervisors and salaried workers in finance, human resources, information technology and other technical areas.
From the San Francisco Chronicle: Wage freeze proposed for S.F. unions
San Francisco's unionized city workers, including police officers, firefighters and nurses, should decide whether to forgo $35 million in cost-of-living raises in the coming months or face massive layoffs that would save the same amount, under a proposal announced Friday by Board of Supervisors President Aaron Peskin.
From the Beaufort Ggazette: Education committee proposes wage freeze for state's teachers
A state-appointed education committee recommended last week that teacher pay in South Carolina be frozen for the next fiscal year because of declining sales-tax revenue.
From FreshPlaza.com: US: Weyerhaeuser cuts dividend by 58%
With revenues expected to be significantly lower in the near future, the company is doing all it can to keep margins intact. Executives implemented a white-collar wage freeze ...
From the WSJ: Trucking Firm YRC, Union Set Tentative 10% Wage Cut
YRC Worldwide Inc., one of the nation's largest trucking companies, will cut wages for 40,000 union workers by 10% if the workers approve a deal recommended by representatives of the International Brotherhood of Teamsters.
From the WSJ: Unisys to Cut 1,300 Jobs, Suspend Raises
Unisys Corp. said it would cut 1,300 jobs, or 4.3% of its worldwide work force; consolidate plants; suspend its 401(k) matching program; and not offer raises to most employees next year.
From the Huffington Post: FedEx Pay Cuts, 401k Freeze Coming
FedEx Corp. on Thursday announced more broad cost cuts _ including salary reductions _ as deteriorating economic conditions continue to drag down demand, warning the outlook for 2009 remains murky.
...
The package delivery company said it will cut pay for senior executives and freeze 401(k) contributions for a year. On Jan. 1, CEO Smith will take a 20 percent pay cut, and the pay of other top brass will fall by 7.5 percent to 10 percent.

FedEx will also implement a 5 percent pay cut for all remaining U.S. "salaried exempt" personnel, which excludes hourly workers such as couriers and package handlers.
Update: To be clear, here is how FedEx described the pay / benefit freeze:
Base salary decreases, effective January 1, 2009:
  • 20% reduction for FedEx Corp. CEO Frederick W. Smith
  • 7.5%-10.0% reduction for other senior FedEx executives
  • 5.0% reduction for remaining U.S. salaried exempt personnel
  • Elimination of calendar 2009 merit-based salary increases for U.S. salaried exempt personnel
  • Suspension of 401(k) company matching contributions for a minimum of one year, effective February 1, 2009