America's hidden economic crisis: Widespread wage cuts

[brooklynite]

Politico

Millions of Americans who managed to hold onto their jobs amid the coronavirus pandemic have seen their incomes drop as employers slashed wages and hours to weather what they expected to be a short-term shutdown.

Now, with the virus raging and the recession deepening, those cuts that were meant to be temporary could turn permanent — or even pave the way for further layoffs. That could portend deep damage to the labor market and the economy because so many workers who have kept their jobs have less money to spend than a few months ago.

The numbers haven’t received the same attention as job losses, which are highlighted every week in government data. But at least 4 million U.S. workers have received pay cuts since February even as they continued working the same job, and millions more have seen pay freezes, according to economists from the Federal Reserve and University of Chicago who put out a study analyzing data from the payroll processing company ADP.

Other estimates put it higher: Roughly 7 million workers have likely received a dock in pay, according to Mark Zandi, the chief economist at Moody’s Analytics. Combined with those who have been forced to log fewer hours, the number climbs to 20 million people — or 1 in 8 workers — who have seen their paychecks shrink over the past few months even as they continued to work, underscoring how much harm shutdowns have caused beyond layoffs alone.

[ProfessorGAC]

1. Unsurprising, I Suppose

We knew this was happening, but the reporting structure is less defined.
I'll have to look around to find the actual dollar value of this.
Seems an interesting nugget.

[SWBTATTReg]

2. Didn't know that this was happening, but am not surprised. And of course the stimulus ...

pkg that went out included a kicker for businesses to not have to pay back loans if they retained employees. Guess what? They are not retaining workers and yet still gathering the stimulus payments (rump isn't enforcing penalties etc.). Figures. Corruption at its worse.

[Igel]

4. There's no way of knowing whose loans will be converted to grants.

The deadline for that is months away.

If they collected the PPP money and didn't retain workers, then it's a loan to be paid back. Only exception might be if they go belly up, but I don't know what the legislation says--the feds might be first in line to chow down on what's left.

That may be corrupt, but that's the deal that the legislation made clear was available and made provision for.

[SWBTATTReg]

5. They're already talking about immediately forgiving all of the 'loans' anyway, so kind of a moot ...

point in retaining workers thus I suspect that unemployment rates are going to continue to go up, being that businesses are getting loans forgiven anyways, despite laying off workers. I hope the next stimulus bill is written better so the repugs can't play around w/ the intended direction of any additional stimulus bill(s). Such a taxpayer funded ripoffs by rump and his thugs, a simple money grab.

[bluewater]

3. The economic impact of the pandemic is almost unfathomable

President Biden will be facing an economic disaster that will make the 2008 financial meltdown seem like the good old days.

Thank god a sane Democratic White House will be in place. The Democratic House too and, I hope, the Democratic Senate also.

We need a Democratic controlled White House and Congress to weather the coming storm.

[Wounded Bear]

6. WE're gonna need to ratchet up the minimum wage and seriously look at UBI...

early in January 2021.

[MissB]

7. I expect to get a raise next month

And will likely start having to take furlough days the following month, effectively wiping out the raise for the time being.

Totally expected it and I’m still very grateful to have a job at the same pay rate that I had when this pandemic stuck.

I’m at a job that has a union. The union hasn’t said anything about furloughs yet but we know that they’ll hit. This month is the first month of our second year of our two year contract and the pay raise is set for our anniversary date on the second year of the contract, which for me is the beginning of August. Several of my coworkers (that have been there longer than me won’t see their raise until next summer so it’ll be more of a hit for them.