Less Money or Fewer Jobs : Which Do You Prefer?

by Vault Careers | June 07, 2010

The issue of how best to cut costs and balance budgets has been behind many headlines since the onset of the recession. And it’s coming to a head in New York State right now, with a bitter fight over whether furloughs and pay cuts are a better alternative than layoffs.

A recent New York Times story, entitled Mayor to Cancel Teachers’ Raises, Averting Layoffs, details Bloomberg’s decision to withhold across-the-board pay increases for public school teachers and principals for the next two years to “save the jobs of some 4,400 teachers.” It seemed like a reasonable decision, but not everyone thought so.

According to the New York Times article, the following was attributed to Michael Mulgrew, the president of the City’s teachers union: “He does not have the power to unilaterally decide on the teachers’ contract, and we have reached no agreement on his proposal to freeze teacher pay.”

Go back further and read a Wall Street Journal on Governor David Patterson’s decision to furlough 100,000 state employees for one week, saving the state $30 million. The measure was considered a last-resort effort, as the state faltered on getting a budget out on time due to unfruitful negotiations with unions over demands to receive the 4% raise promised to state employees this year. Again, saving the state money and filling a budget gap by holding off on a raise or working one less day without pay sounds reasonable when thinking about the alternative – no money at all, and no work either.

However, not everyone felt the same way. In a New York Times piece about the same topic, Kenneth Brynien, the president of the Public Employees Federation was quoted as saying: “This action on the part of the governor is clearly illegal. We have a contract that says that we work all year and make a certain amount of money.” The Supreme Court halted these furloughs and the state must figure out another way to fill the gap; possibly by cutting jobs entirely.

Now consider this item from a recent article in the Boston Globe The article describes Brandeis University English professor William Flesch’s dilemma as he was forced to balance the budget of the school of Arts and Sciences. Looking to save jobs, he donated 1% of his salary and asked others in the faculty to do the same. A total of $120,000 was saved. In the same article, it was stated that at Beth Israel Deaconess Medical Center, executives recently agreed to take a salary cut and doctors donated more than $350,000 to preserve several hundred positions.

To me, this seems like the way to approach an economic crisis that is still plaguing our cities and states, despite signs of growth in recent weeks. Those with the means to survive should do their part to help hardworking people keep their jobs.

But should other alternatives be used to keep people working? Furloughs and pay cut/freezes seem like an easy answer; people can make ends meet with less money–more so than they could with no money or unemployment. When offered, furloughs and pay cuts for all make more sense than mass firing, especially when you don’t know if you might be the one being fired. But maybe it’s not as simple as that. Tell us your thoughts.

--Posted by Jon Minners, Vault.com

Filed Under: Job Search | Salary & Benefits


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