According to an article in the Dallas Morning News, the national unemployment rate rose to 9.5 percent as employees suffered 298,000 job losses in August. But increased job losses and high unemployment hasn’t stopped many companies from enjoying higher productivity.
The article said:
“… U.S. worker productivity rose in the second quarter at the fastest pace in almost six years as companies squeezed more out of remaining staff to boost profits. Productivity, a measure of employee output per hour, rose at a 6.6 percent annual rate, the most since the third quarter of 2003, revised figures from the Labor Department showed today in Washington. Labor costs fell by the most in nine years.”
The bottom-line is that companies are now getting more for their labor costs, but at what price to the worker? Many Americans have succumb to foreclosure due to job losses and many who have not faced a job loss (yet) are finding that their take-home pay is reduced as a part of some companies’ efforts to avoid job losses. Many workers are finding that even after taking part in job loss prevention programs such as reduced pay, work shares and furloughs, they still end up in the unemployment line because the changes are not sustainable.
And depending on how long a worker has been working at a reduced salary, he/she may find that their unemployment benefits have also been reduced. Before accepting a reduced salary or other “job loss prevention” arrangements, make sure such arrangements are not detrimental to your financial well-being.