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Posted on Tue, Oct. 20, 2009 11:22 PM
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Wage stagnation oozes into more workplaces

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Has your boss cut your pay? Taken away overtime? Reduced your workweek? Eliminated raises? Chopped your benefits? Put you on an unpaid furlough?

Join the millions who have seen their take-home pay flattened by the double whammy of recession and its 9.8 percent-and-still-rising unemployment rate.

Compensation so far in 2009 has been cut by the largest amount in nearly two decades, with a government index of real average weekly earnings down 1.9 percent since its high point last December. And the average workweek — now down to 33 hours — is the shortest on modern record.

Some pay cuts have gone far deeper than the aggregate data indicate.

James Pastine, a 35-year-old Kansas City architect, and his wife, Laura, also an architect, have both taken 20 percent pay cuts this year.

“We’re struggling right now, but we’re making it through with the children and day care and trying to make ends meet. It’s definitely a lot tougher,” he said.

Typical of many, the Pastines accepted the sacrifice.

“It was the right thing to do, going with a pay cut rather than let people go,” Pastine said. But, “Once you set a standard of living, it’s hard to take a 20 percent chunk out of that.”

Compensation cuts have sliced across the board.

In Kansas, average weekly wages fell 2.3 percent from the first quarter of 2008 to first quarter 2009; in Missouri, they’ve been flat, according to figures released Friday by the U.S. Bureau of Labor Statistics.

But most workers who’ve been nipped and tucked are clear on one point: They’re still in better shape than the more than 7 million U.S. workers who have lost their jobs in this recession. The unemployed have suffered the biggest pay cuts of all.

“The ones who have jobs are willing to give up a lot to keep them. They’ve seen the alternative,” said Tom McCoy, a Kansas City compensation consultant at Intellithink.

Les Butterworth, a driver for YRC Worldwide Inc., accepts that wage reductions are the cost of business survival in this recession.

He took a 10 percent wage cut in January, followed by another 5 percent cut in August.

“Even with the pay cut, it’s still been a good wage,” he mused.

“My kids are grown up and out of the house, so it’s just me and my wife,” said Butterworth, 51, who’s been an over-the-road driver for 23 years. “It would be worse if I were a dock worker. Drivers can usually make up for pay cuts by working longer.”

That resilient attitude is shared by many workers.

Fortunately, too, paycheck chiseling has been muted by recent deflation in core consumer prices, giving the sense that most workers are running in place financially.

Still, the cuts make workers cautious.

Mike Taylor, who works for the Unified Government of Kansas City, Kan., and Wyandotte County, has to take one unpaid furlough day a month for 15 months.

Like 17 percent of U.S. employers who have had unpaid furloughs this year, his employer mandated unpaid days off as well as freezing 2009 and 2010 pay (excluding public safety workers).

“It amounts to a 4½ percent pay cut, which is definitely taking a bite out, but it’s a better alternative than laying off more employees,” said Taylor.

“It was great to have a long weekend, but when the paycheck came it was, ‘Oh boy, there’s not as much there.’ So, yes, my wife and I are being a bit more careful about making big purchases.”

The Star’s Kevin Collison, Randolph Heaster, Don Bradley, Mark Davis and Dan Margolies contributed to this report. To reach Diane Stafford, call 816-234-4359 or send e-mail to stafford@kcstar.com.

Posted on Tue, Oct. 20, 2009 11:22 PM
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