Pay-Cut Cities

Forbes ^ | 6/30/09

[FromLori]

The 10 metro areas where salaries are falling the most, and which towns are bucking the downtrend.

It's nofile:///C:/Users/Public/Desktop/EPSON%20Scan.lnkt the best time to make a new start of it in New York state. Although the state's unemployment rate is better than much of the country's, a recent study shows that average wages are falling more rapidly in New York cities than metropolitan areas elsewhere in the country.

Six of the 10 cities where wages have fallen the fastest this year are in New York, according to a study from the Brookings Institution, released last week. From the fourth quarter of 2008 to the first quarter of 2009, average wages fell in Rochester, Syracuse, Albany, New York, Poughkeepsie and Buffalo--and the decline is wreaking havoc on the state's finances.

In Pictures: Top 10 Pay-Cut And Pay-Raise Cities

Everyone knows there are job losses in a recession, but curiously, it is unusual--even in the depths of recession--for wages to fall. Wages are considered "sticky": Employers generally prefer to cut jobs than to cut the salaries of their staffs. When employers ax more higher-paid jobs than lower-paid ones, average wages fall.

[sr4402]

IMHO Wages are being cut because the employers believe new taxes and inflation are on the way.

[Albion Wilde]

Most of the cuts are in New York state.

[firebrand]

Four friends have lost jobs very recently, three in private industry and one in city government.

I wish there had been a way to cut salaries across the board rather than laying people off. Boston Globe employees took a 23 percent cut. I think my friends would have preferred that, especially with New York State's comparatively low unemployment compensation.

[Pining_4_TX]

CEOs don’t seem to be suffering any loss of pay or bonuses. What they make is obscene, but before I am tarred and feathered as a lib, let me say that gov’t intereference only makes things worse. I have no illusions that pols do anything but enrich themselves and their cronies.

[tinamina]

What I’ve seen a lot of employers do is cut everyone’s hours, so that you work 4 days instead of 5 or take every other Friday off, etc. In this way they don’t have to let employees go, everyone just shares in the downturn equally.

This would necessarily equate to falling wages.

[John Will]

New York State outside the Ny Metro is as bad as Michigan or any Rust belt state.

[2nd Bn, 11th Mar]

I did that last year - voluntarily.
It’s wonderful...the happiest professionally I’ve been in along time.

[firebrand]

Not really the same, because the employer loses the hours. The employer pays less but gets less time. The other way, the employer doesn’t really lose anything. The employees take the hit in order to stay employed.

[firebrand]

Actually the metropolitan area has been very hard hit, with all the financial jobs lost, although the rest of the state was hurting already.

But the unemployment compensation is the same throughout the state. It's $405, with another $25 added on by the stimulus package. Connecticut and New Jersey are way over $500. There is a bill to raise New York's to $625 but our state legislature hasn't yet finished making the statehouse into a school playground.

[John Will]

405 a week in New York City. Even the illegals get more than than a week.

[firebrand]

I know. It’s criminal. One or two dinners at Jean Georges and you’re broke. : )