Posted on 05/12/2003 12:52:17 AM PDT by sarcasm
Bruce Hedderly-Smith's pay expectations could hardly be considered out of line, but this job offer rankled even him: $22,500 a year to sell building materials, plus a 1 percent commission. Oh, and he could expect to put in long hours.
"I might as well work at McDonald's," said Hedderly-Smith, 58, a laid-off salesman from Bainbridge Island with 29 years experience. "If you want me out there to sell your product, at least give me a living wage so I'm not thinking of robbing the next bank I drive by."
The offer illustrates how high unemployment combined with soaring employee-benefit costs, has slowed or even reversed some of the wage gains of the buoyant late-1990s, particularly for white-collar jobs.
Over the past two years, Hedderly-Smith has watched the going rate drop for sales jobs, and he's seen his own income fall accordingly. Where he once earned a respectable $43,000, the next job he took after being laid off flattened to $36,000.
Laid off again in January, Hedderly-Smith discovered the base pay offered by the few companies hiring hovered in the mid-$20,000s, with razor-thin commissions and in one case a 55-hour work week.
"The offers are laughable, shocking and insulting," he said.
In Washington, the private sector's median wage began to drop in 2002 after seven quarters of steady increases.
After adjusting for inflation, the U.S. median wage for all income levels fell every quarter between March 2002 and March 2003, according to the Economic Policy Institute, a Washington, D.C., research group with ties to labor.
Pay at upper-income levels — $76,000 a year or more — took the hardest hit from the previous year, falling 1.4 percent compared with a 3 percent rise a year earlier.
Back to Earth
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Microsoft signaled that things had cooled last year when it cut its bonus to workers living in Silicon Valley. The bonus fell to 15 percent from 25 percent of their salaries, which average $89,600.
The software giant had added the perk in 2000 when tech workers were being lured by competitors offering "cars and outrageous signing bonuses in the six figures," said spokesman Jim Bak.
Back then, Microsoft was losing 8 to 10 percent of its work force a year. Its attrition rate has since dropped in half even with the California pay cuts.
Pay for nearly all U.S. technology jobs will fall about 1.3 percent this year, although the drop for Internet and e-commerce jobs is expected to be twice that, a survey by Robert Half Technology notes.
These average figures, however, tend to soften the sharp edges of wage declines, which is why some economists prefer using median wages as a more accurate measure.
"A man with one leg in boiling water and the other in ice water is on average very comfortable," said Lawrence Mishel of the Economic Policy Institute. "That is, an average can be true but irrelevant to the reality experienced by most people."
That appears to be the case in this region, where some salaries have dropped far more than national surveys indicate. Ian Duggan, a tech recruiter for The Watson Group in Bothell, estimates that local tech pay in general has fallen at least 15 percent, even more for temporary contractors.
The hourly rate for a senior project manager in the tech industry used to be about $150 an hour, he said. Now companies are paying $90 an hour.
A full-time middle-management job once paid $85,000 a year plus a signing bonus of at least $2,000, often higher. That same job now starts at around $62,000 with no bonus.
"I think the pendulum swung so far one way it's now swinging far back the other way," Duggan said.
Web and software developer Steven Haas reached $92,000 in annual income in 2001, a figure he knew was caused by an overheated economy. Even so, when he began searching for a new job last year, he still had the attitude of a tech worker accustomed to being courted.
"I turned down a job because they wanted me to wear a suit and tie," said the 33-year-old Haas, who lives on Mercer Island and describes himself as "long-haired, laid back" and "anti-corporate."
"Then there was another job I turned down because the guy was only offering $20 an hour."
When his dry spell turned into an eight-month drought, Haas was ready for any job that would take him. "If I have to wear a suit and tie to clean toilets," he told himself, "so be it."
So last month, when a Seattle game company offered him a $60,000 Web development job, Haas grabbed it. He was grateful to be out of a local market with a 6.4 percent jobless rate, more than twice the rate here when he moved from Sacramento in 1998.
"I was shocked by how bad it was."
Indeed, technology job cuts — more than half a million nationwide since the beginning of 2001 — have swelled the market with high-level IT workers willing to take jobs that are below their old salaries and skill level.
The trend has encouraged some employers to pile on job requirements while still demanding long hours.
In an ad for a software developer, one Los Angeles company wrote: "You need not apply if you need to make $10k a month to pay for your Jag and timeshare in Cancun... . We are only interested in someone who loves to write code, loves to work long hours writing code, and goes home to write more code for fun."
The competition was too much for Michael Nelson, a 31-year-old programmer who left Seattle recently to take a job in Florida.
Nelson has three college degrees (in software design, information systems and math), four technology certifications and six years of experience, but it was not enough for local companies hiring.
"The positions that are available demand three to 10 years of real experience in multiple technologies," he said, adding with frustration: "Some technologies have only existed less than three years."
Although companies can now get skilled workers for less money, they're also putting a larger chunk of their budgets toward employee benefits, health coverage in particular, which is cutting into the amount of money for pay.
The cost of health-care coverage rose about 15 percent last year, forcing some companies to shrink or freeze pay raises.
A survey by Mercer Human Resources Consulting, an international consulting firm, found that 17 percent of businesses polled across the country either lowered their salary budgets for this year or were considering it to offset rising insurance premiums.
Zones, a computer reseller in Renton, trimmed its budget for pay raises by 2 to 4 percent this year, partly because its health-insurance costs soared 35 percent, said Donna Schneider, human-resources director.
The company, which is self-insured, also passed some of those costs on to employees. "We decided that some of these people couldn't afford (a large increase) so we used a sliding scale based on salary," Schneider said.
'Variable compensation'
Other companies are offering "variable compensation," basically one-time performance bonuses that must be re-earned every year and don't alter base salaries. Eight years ago, about half of U.S. companies used variable pay; this year that number has grown to 80 percent, according to the consulting firm Hewitt Associates.
Although worker scarcity has caused pay to rise in such industries as health care, belt-tightening is visible elsewhere.
Sig Bergquist, a Seattle recruiter who finds managers for large chains such as Home Depot, said retail salaries haven't dropped, but they're not growing the way they did in the late 1990s.
"There was a solid increase then; $34,000 jumped to $40,000. (Today) $40,000 hasn't gone to $45,000."
One accountant said she took a $6,000 pay cut when she started working for a local nonprofit, a job that took her 18 months to find.
The accountant, who wanted to remain anonymous to protect her job, said she's now earning the same salary as she did working for another nonprofit in 1999.
"With so many people out of work and needing income of any form," she said, "employers are able to set wages back two or three years."
Where we live- south Georgia- that is really good pay for a woman- only professionals, like doctors, lawyers, nurses, or realtors- do better.
For comparason, her boss is paid about $27,000 a year, and gets a "free" car, housing, medical & retirement benefits... the head of the local emergency room earns a flat salary or $110,000 a year ( not including private practice, of course ) and is expected to be on call 24/7... somewhere between those top & bottom figures lies what passes for middle class in southeast Georgia.
The last year I drew a salary from one of my businesses- 1985- I earned $40,000, which was sufficient to have a nice house in a good neighborhood, new car, pool, health insurance- what I'd term the trappings of a decent, but middle-class lifestyle.
The biggest single expense is the "cost of supporting the government..."
Yep, same here. The New York Times has a long article today stating that NYC taxes aren't really that high - what a laugh.
Just remember Comrade, to keep shop, shop, shopping for bargain junk down at ChinaMart ... and keep on smiling to all your new (non)English speaking, (non)citizen families in the neighborhood who are only here after all, to take the jobs we Americans are too lazy, or refuse to work.
We must remain happy and contented little lobsters as the temperature s-t-e-a-d-i-l-y rises, while our expectations and memory slide on down into the haze.
BTW did anyone hear where Madonna was sited today ??
He sounds like he's doing the company a personal favor--if he's got it so rough he should go start his own business.
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