tag:blogger.com,1999:blog-21552987.post3585824186818357360..comments2023-11-05T04:50:27.094-05:00Comments on Social Econ Blog: Keep your job in a downturnUnknownnoreply@blogger.comBlogger5125tag:blogger.com,1999:blog-21552987.post-32574193632646627062009-06-01T00:48:53.458-04:002009-06-01T00:48:53.458-04:00Since times are tough right now this has been goin...Since times are tough right now this has been going on with some of my friends who have graduated recently. A couple of my friends have had their wages lowered but have still been working hard trying to make themselves valuable to the company so they have a job. I have a few friends who were just laid off. I believe right now people feel fortunate to have jobs and are willing to take a lower wage because of the tough times. But if when you cut the wage and you see a decrease in productivity I don't believe you would have choice besides laying them off. So maybe it would be better for firms to cut out certain employees and keep wages were they are at for the other workers who may take the firings as a sign that they need to work harder.Josh Cavanaghhttps://www.blogger.com/profile/15085228629003611476noreply@blogger.comtag:blogger.com,1999:blog-21552987.post-11378439697677504472009-05-17T16:16:00.000-04:002009-05-17T16:16:00.000-04:00'Desperate times call for desperate measures.' In ...'Desperate times call for desperate measures.' In hard times, sometimes the first thing you have to trim back is pride, and that is exactly what is being discussed here. I disagree that lowering a workers wages (with the caveat the he or she volunteered it instead of being fired) absolutely leads to them worker not working as hard because the other option is unemployment, and going from making decent money to making no money is a pretty good incentive. However, there are exceptions and rules that would have to be followed in order to preserve worker morale and increase efficiency even in an unideal scenario: 1. everyone's wages would have to be lowered uniformly so no one would feel unwanted, which would hurt morale and lower overall efficiency<br />2. offer performance-based incentives to workers even after lowering their wages to ensure that will continue to work as hard or harder than previously. In this way you could both decrease operating costs and improve efficiency.RMKhttps://www.blogger.com/profile/08701505252102093493noreply@blogger.comtag:blogger.com,1999:blog-21552987.post-13635809449590056072009-05-11T12:10:00.000-04:002009-05-11T12:10:00.000-04:00From the perspective of an individual worker, I wo...From the perspective of an individual worker, I would prefer to take a lower wage over being laid off. If the cause of the firm cutting costs through either lowering wages or laying people off is due to an economic downturn and not due to my own failures as an employee, I would prefer take a decrease in my income over having none at all. As long as I'm still working at the firm, wages would most likely increase once the economy improves (assuming that the firm survives the ordeal). At the same time, I could take advantage of this time to search for a replacement jobs while still possessing a source of income.Eric Leenoreply@blogger.comtag:blogger.com,1999:blog-21552987.post-15650656464570884252009-05-10T13:51:00.000-04:002009-05-10T13:51:00.000-04:00Involuntarily lowering workers' wages (CEO and oth...Involuntarily lowering workers' wages (CEO and other high-level executives are exceptions) is probably a risky move. As the post says, it might decrease the workers' morale, and thus lowering productivity. But, more importantly, even the productivity is somewhat at the same level, the value of the firm will plunge as investors will assume that productivity is lower. I think it is clear what will happen to the firm if investors' confidence die off.<br /><br />Exceptions of this case might be the lower pay for CEOs and high-level executives. The most famous example is Lee Iacocca, who took a $1 salary. But his action was voluntary and it showed the public that he believed that Chrysler could be profitable.El Winatanoreply@blogger.comtag:blogger.com,1999:blog-21552987.post-67224924328430534682009-05-07T02:39:00.000-04:002009-05-07T02:39:00.000-04:00I'd rather have the firm not lower everyone's wage...I'd rather have the firm not lower everyone's wages, but rather layoff those workers under performing or shirking. In my opinion the firm is much better off cutting the weakest links. Lowering wages wouldn't be optimal for a working environment of the firm, employees wouldn't work as hard.Abe Choenoreply@blogger.com