Still on the Job, but Making Only Half As Much

Good example why the economy is likely to sit slow or no growth mode for a long time. Lots of people don't have jobs. Those who do have jobs are earning less. Louis Uchitell talks about how pay cuts are more common than at any time since the Great Depression. - MT

The New York Times - 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.

The demotion, the loss of command, the cut in pay to less than his wife, Tracy, makes as a fourth-grade teacher, have diminished Mr. Lawlor, 34, in his own eyes. He still thinks he will return to being the family’s principal breadwinner, although as the months pass he worries more. “I don’t want to be a 50-year-old pilot earning $40,000 a year,” he said, adding that his wife does not want to be married to a pilot with so little earning power.

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.”

62,000 Jobs Are Cut by U.S. and Foreign Companies

Employers have tried to nip and tuck their labor costs by reducing overtime, shortening the workweek and freezing wages, but now, they are reaching for the saw.

On Monday alone, companies across the employment spectrum announced more than 65,000 job cuts in the United States and around the world, a stark sign that businesses are enduring a painful, protracted downturn.

Monday’s toll included 20,000 cuts at Caterpillar, the world’s largest maker of construction and mining machinery; 8,000 jobs at the wireless provider Sprint Nextel; 7,000 workers at Home Depot, and 8,000 from the expected merger of the pharmaceutical makers Pfizer and Wyeth. The beleaguered automaker General Motors announced that it would cut shifts at plants in Michigan and Ohio, where the downturn has hit hardest, eliminating some 2,000 jobs.

And Texas Instruments said after the market closed on Monday that it would cut 3,400 jobs or 12 percent of its work force through 1,800 layoffs and 1,600 buyouts or retirements.

In Europe, the banking and insurance group ING said it would cut 7,000 jobs; the electronics company Philips, 6,000; and the steel maker Corus, 3,500 worldwide. http://www.nytimes.com/2009/01/27/business/economy/27jobcuts.html?partner=permalink&exprod=permalink

Test for Dwindling Retail Jobs Spawns a Culture of Cheating

The Wall Street Journal - When Anton Smith applied for hourly work at a Finish Line sneaker store in Charlotte, N.C., his first hurdle was showing he had the temperament for the job.

Finish Line Inc., like many other retailers, makes applicants take a personality test before it will consider interviewing them. The test asks whether they agree or disagree, and how strongly, with 130 statements.

But thanks to a little digging on the Internet by a friend, which turned up an unauthorized answer key, when Mr. Smith took the test in late 2007 he had a good idea what the employer wanted to hear.Statement: "You have to give up on some things that you start." Suggested response from the cheat sheet: "Strongly disagree."

Another statement: "Any trouble you have is your own fault." Suggested response: "Strongly agree."

The store hired Mr. Smith, 23 years old, for a part-time job, although the parent company later closed that outlet and Mr. Smith has moved on. His view of the pre-employment test: "It isn't useful. People are hip to it."

Many retailers have largely automated the hiring process with online personality tests such as Mr. Smith took. The system cuts the time store managers must spend in interviewing applicants. But the test also is creating a culture of cheating and raising questions for applicants about its fairness -- even as it becomes a critical determinant of who gets a job and who doesn't in a stressful era of rising unemployment.

Today, many retailers are cutting their work forces, but that just makes the test even more critical. So many people now are seeking what jobs remain in retail that the test's maker says it processed about 29 applications for every opening in 2008, up from 22 in 2007. Meanwhile, for the retailers, it has become doubly important now to employ only the most productive people.http://online.wsj.com/article/SB123129220146959621.html