Fields: Cut Pay Rather Than Lay Off Workers; Force Public To Spend

Guest Columnist

Here are a couple of ideas to cushion the recession and promote the recovery:

                                        JOB LAYOFFS
When a company is in trouble the first solution is to lay off some workers.  That means unemployment payments, Food Stamps, Medicaid, welfare payments.

All this drives the deficit.

Additionally, it means idle hands which stress families.  It is well known that a rise in unemployment means a growth in domestic violence and other crimes.  For many it means choosing between doctor visits, food, utilities and the mortgage payment.
Instead of having a few workers take all the pain with layoffs, why not have a pay cut for all the employees?

Instead of cutting 5% of the workforce, how about cutting everyone’s pay 5%?

Presumably the guys at the top can afford a bigger percentage hit then the $8.50-an-hour worker. But that is a detail.
Going back a hundred years, that is the way the International Ladies Garment Workers Union did it.  On 60 Minutes this week they showed that the steel company Nucor did it that way. 
Since all these layoffs cost the taxpayers money, Washington should offer incentives to companies and governments that adopt this standard and punish companies that don’t.
We are all in this together.  We should all share the pain.
                                        STIMULATING THE ECONOMY
The government is about to create millions of jobs.

The natural reaction for those workers will be to squirrel away as much as possible.  For the next year or so that is a bad idea when we are trying to encourage spending to break the recession.
A partial answer might be found in a Great Depression idea that never got traction. It was called the Townsend Plan.

It came from Dr. Francis Townsend, who was trying to help the destitute elderly.  This was before Social Security.  The core of Townsend’s plan was monthly payments to the elderly in special script that had to be spent within 30 days or it became worthless.
These days computers and credit cards make it a whole lot easier.  We could issue debit cards to persons working on Stimulus Plan projects.  On the first of the month the account is replenished.  What is not used by the end of the month is deleted. 
We all use debit cards. In case you didn’t know, Food Stamps have not been stamps for a long time.  They are debit cards that are replenished every month.  It works a whole lot better than the stamps.
Yes, I am aware that bad guys will find a way to abuse the system.  But I don’t think this is the time to reject the “good holding out for the “perfect.


4 Responses to “Fields: Cut Pay Rather Than Lay Off Workers; Force Public To Spend”

  1. Mad In Fort Lauderdale says:

    Fort Lauderdale gave huge raises to the employees and they are now crying they don’t have any money. Government workers need to take a pay freeze or a pay cut to help us through the recession.

  2. Sam's Groupie says:

    If people were held accountable for their budgets, including the elected officials, enough money could be saved that staff would not have to be cut. Stop the junkets to China and Europe. I have never seen the Commissioners (anywhere)reduce the size of their personal staffs or curtail their travel. Ramp up video-conferencing. There are many ways to save, rather than balancing the budget on the backs of minimum wage workers, many of whom come to work under unbelievable personal stress. What are governments doing to help their own staffs cope with the financial crisis? Not much. I haven’t seen any workshops. Like honey bees, when worker bees die off, we’re going to miss them.

  3. S. Only says:

    Bravo Sam Fields! This is a “no brainer” to me. Anyone who got a raise this year should give it back for the good of the company/organization. And I agree that it would be better for everyone to take a pay CUT rather than a job cut.

  4. I've Been Thinking says:


    I want to congratulate you on a personal level because you wrote a piece that forced me to think about the issue, actually for a few days. Usually with you, my inclination is to respond right away but on this issue you got me thinking which explains my delay in responding.

    My conclusions are that it is better public policy to have a smaller number of better paid employees performing duties that can only be entrusted to the civil service, rather than having a much larger group of public employees that are underpaid and are performing functions better provided to government by the private sector. It took me a while to get those thoughts down to one sentence, but there it is. There are administrative determinations made by many government workers or sensitive nature type of work that really belongs in the hands of a civil servant, who can’t be fired for any political whim of a reason. Then there are tasks that frankly anybody can do. The average government has a variety of jobs in both categories. If we put the latter group into the private sector, then the remaining jobs could be absorbed by government more cost effectively.

    What is your reaction to this as a public policy suggestion?