Picture this: The company that you work with decides that since times are so hard, they will introduce a 10% pay cut initiative and cut everyone’s salary by 10%. The managers claim that this is the only way to keep the company afloat and avoid layoffs. They have also claimed that salaries is one of their largest expenses and they felt that it was the area where they could afford to cut back and still maintain productivity.
Additionally, they would not be in a position to offer staff any cuts in their working hours, because in order for the business to succeed, they needed all hands on deck. If you were not willing to take the pay cut, you would be given the option of leaving the company with one month’s salary and your vacation pay. Would you take the 10% pay cut or would you leave the company?
The scenario of a 10% pay cut was thrust into the Barbadian public discussion domain by a well-known business man. He suggested that it was one way of dealing with the economic crisis currently facing Barbados. “Commenters” on the topic were annoyed and expressed their anger. All of them disagreed with these sentiments.
Personally, I can not afford a 10% pay cut. A 10% pay cut would effectively blow my structured savings out of the water, which would in turn affect my MBA fund, which could then cause a myriad of unpleasant things to happen and totally disrupt my finances. What about those people who have:
- Car Loans
- Other Loans – Hire purchase, leases
- Ailing family members who depend on them
- Bills – Food, water, electricity
- Study/ Education Loans
What makes it even worse, is if the household being affected is headed by a single parent or one where there is only one breadwinner due to the other spouse being laid off. How can someone who is already living paycheck to paycheck survive such a decrease. Granted, people lose their jobs everyday, and they somehow have to make it.
I guess most people would take the pay cut and try to find something else. But we all know that is not as easy as it sounds and finding the right job can take a very long time.
Would you take the 10% pay cut? How would you reshuffle your finances to accommodate the cut, if you agreed to take it?