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As the unemployment rate continues to creep toward the 10% threshold, some companies are exploring more creative ways to cut down on labor costs without handing out pink slips. Case in point, as reviewed by The New York Times: the Vera Institute of Justice, which has reduced some employees' workweeks to 24 hours (or three days out of five). In this example, workers take a 40% reduction in salary as well, but no loss in benefits. Other companies require 32 hours of work in order to retain health care and other benefits.
The number of New York workers participating in such a compromise reached 462 last year from 291 in 2007. While this number is small, it could grow as more companies attempt to keep afloat while still wanting to care for its staff. A three-day workweek and the accompanying salary cut isn't easy for some to bear, but it is better than the unemployment line. And in many cases, one can keep benefits while having time freed up to look for a new full-time position.
On the flip side, maybe a clean break is better than seeing the economically grim writing on the proverbial walls. What do you think?
Beth Gaston Moon works for WeSeed.com, "The stock market for the rest of us." The above comments are not intended as trading or investment advice.
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Reader Comments (Page 1 of 1)
3-02-2009 @ 5:35PM
BHarrison said...
Well, does this mean that the USA is going to become more like Europe with 32 hour work weeks?
That would be consistent with our coming lack of production and prosperity that is surely coming with this recession.
3-02-2009 @ 6:52PM
blogs11111 said...
I think it's a great option. If a person doesn't want to take the reduced hours they can move on to something else. However, I a person can afford the reduced hours or doesn't have any other job prospects then this might work out for them, especially if they can keep their benefits.