That really says it all. I think it's amazingly idiotic and short-sighted to favor firing X% of employees in an organization rather than to decrease salaries by a small and necessary percent.
This is clearly more appropriate when the organization sells services more than products. A declining market may mean less demand for the product, and as a result fewer employees are needed to run the company. However, when services are the primary product, cutting employees also means cutting services. It does not save money. It only reduces the services, and if the need for those services remains constant, everybody suffers.
For instance, in the field of state-supported mental health, the need for professional services continues to rise as the population increases and as the economy heads south. A "RIF" or reduction in force means that the population served will receive fewer and lower-quality services. Since at least some income is realized by providing these services, there is also a decrease in income.
Alternatively, expecting all employees of the Department of Mental Health to take a small percentage cut would accomplish the necessary reduction in expense, without reducing the quantity and quality of mental health services. We are quick enough, it seems, to demand increases in salary when the economy is booming. When the economy tanks, why not take a decrease rather than firing some percentage of the employees? I suspect the answer has to do with an individual's belief that the firings will be of "other people", so that's the gamble: a small chance (?) of being fired versus the certainty of a 10% decrease in salary.
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ReplyDeleteIs 10% for 50k yr. person the same as 20k yr. person? Does it matter? I have taken cuts to save jobs and I would take a bigger cut so people on the very bottom of the pay scale dont dip down into poverty level incomes. People are not used to situations like the one now, I was born in 75' I havent known a time when jobs werent easy come easy go. I know were I work there have been pay cuts every couple of years and people get real tired of doing things like going back to school just to get another raise of 5% then turning around next yr. and getting a 5% cut. When youre dealing with government agencies you have politicians involved so answers to problems are not based on right and wrong its based on ?
ReplyDeleteI appreciate your comments. The issue of a flat percentage pay cut for people with marginal salaries is clearly different from the same percentage cut for a higher-salaried person. Hadn't really thought of that.
ReplyDeleteThe other issue is that we can't continue demanding services from the government unless we are willing to pay for them. If government income drops, we either have to have fewer services or raise taxes to provide the missing state income. The Federal government can spend money it doesn't have; the State of Oklahoma cannot. If we don't got it, we can't spend it. So... where are we gonna get it?
We cant have an easy answer when the easy answer is not possible. Government being more responsible is the easy answer but not a realistic one so just like the jobs issue do you keep feeding the ever growing beast that wont listen to its master or do you cut the food off and say thats it! Im a believer in charity and believe that the day we stop helping others is the day we as humans should just hang it up. I guess I put my species over my patriotism.
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