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July 10, 2009

Keeping jobs

Jobs are the number one priority in today's difficult economy, but unfortunately 6 million of them have been cut since the current recession began. But those job losses could have been worse if it wasn't for something many businesses have been doing. What is it? Listen

"Well, what is it is that businesses are reducing salaries. That is, unlike past recessions, where it was typical for businesses to lay off workers, what many businesses are now doing is keeping their workers, but they're reducing their salaries. They're cutting salaries in order to trim costs, and I think what businesses have figured out is that this is actually turning into a win-win for them. On one side, they're able to keep good workers, and they're expecting - hopefully, they're right - that the economy will turn around. And so when that does happen, they won't have to go out and hire new people. On the other hand, workers I think - many - are looking at this in a positive way. You might way, well, how so? Well, I think workers understand, this has been a bad recession. They understand that businesses are under the gun. And what many people have observed is that worker morale can suffer when they see empty chairs, when they see empty places where people used to work. And so they are more likely to actually look at this in a positive light, and say, I know I'm getting a little bit less, but at least people are staying here. That's giving me confidence in this business. So in a somewhat odd way, cutting salaries seems to be actually helping both the business and workers."

Posted by Dave at July 10, 2009 08:00 AM