Are layoffs or wage cuts better for worker morale?
When times are tough for businesses, the economic theory of “wage stickiness” holds that it is better to lay some workers off and preserve the wages of those who remain vs. cutting everyone’s wages to ensure there are no layoffs. But some employers are experimenting with flipping that equation on its head. Instead of doing layoffs, they’re cutting wages across the board and preserving the headcount. What do you think? Be sure to vote in Clark’s poll and let him know. Executive producer Christa and associate producer Joel both agree that they’d prefer pay cuts to layoffs. Economists, however, disagree with both of them, arguing that the hit morale takes as your check shrinks is very severe. But as Christa counters, having a skeleton staff that has to do twice the work is depressing too. We’ll leave you with this very inspirational story from Clark’s past: When he owned his travel agency, one of his corporate clients was in dire financial straits. The office manager at the company believ
