Voluntary pay cuts? The French are leading the way


Writing from Paris

Workers are forgoing raises, taking unpaid furloughs, and working fewer hours in an effort to save their jobs from the jaws of the global economic contraction.

But take a voluntary pay cut?

That's what some workers here are now agreeing to do – an indication of how gloomy the employment picture has become across much of the world.

Voluntary pay cuts in the United States have come mostly in the form of union contract concessions or agreements in a few state and local government jurisdictions. In the French private sector, though, the latest salvo has arrived with force:

The French division of Hertz sent a letter this spring to its salaried workers asking them to give up 5 percent of their salaries over a period of three months. That cut rose to 7.5 percent for managers, according to the French newspaper Libération, which published the letter Thursday.

This idea is rare in the United States – most North Carolina judges have agreed to a 0.5 percent voluntary requested earlier this month; the city council of Fresno, Calif., voted earlier this month to permit donating part of their own salary – some are volunteering 3% – back to the city treasury.

But in France, such moves would have been unthinkable a few years ago.

It's not clear how many salaried workers at Hertz have agreed to the reduction. A Hertz union, representing hourly workers, told Libération that two-thirds of workers had agreed. The company said it was a smaller number.

Pay actually decreased during the Depression – a move many economists say was necessary to bring pay in line with declining prices. So far this time, pay raises have almost disappeared. (How long has it been since they rose so little? Click here.)

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