5 to 10 depending on the status of employees

Wall Street, it speaks of "hair cut". But it is not only the "fat cats" in the financial sector to be a good "hair cut" since the beginning of the year. Originally coming from the computer (Hewlett Packard, Microsoft...), the popularity of wage reductions quickly spread to the industry, the press, and even universities overseas. According to a recent survey of Mercer, an American company in four had already enacted the freezing of salaries in February. And the phenomenon of 5 to 10 of the wage reductions, which already affect 5 of American companies in 2008 according to the firm Society for Human Resource Management (SHRM), widely spread since the beginning of the year.

Leave without pay imposed

"In an environment, there is no margin of error and no tolerance for inaction", said the CEO of Hewlett Packard, Mark Hurd, by opening the ballroom of the declines in wages, with reductions of 2.5 to 10 depending on the status of employees. Like many other business leaders, he justifies this "safeguard measure" by his desire to avoid a redundancy plan. HP pattern intended to "lead by example" to be imposing a 20 earnings decline and by imposing a sacrifice to 15 on their basic salary to members of the Executive Committee.

In the aftermath, the world leader in construction equipment, Caterpillar (103.000 employees), which suffered its first quarterly loss in 16 years in April, announced cuts of up to 15 for its employees and wages up to 50 for the variable part of the compensation of its executives.

Come to the computer with HP, Cisco, Dell and Motorola, the practice of the reductions of wages, but also to leave without pay imposed or periods of technical unemployment is widespread in the automotive industry, the press or the solicitor firms. Facing the 13 fall in advertising revenues in 2008, "new york times" gave kick off, end of March, by announcing a general decline of 5 of the wages to maintain staff editorial (1,300 employees), in exchange for a 10 days unpaid leave. The same scheme has been applied to the "Boston Globe" of Chicago, threatened with closure. Certain subsidiaries of French groups, such as Hachette Filipacchi Media, he followed suit by imposing a reduction of 3 to 6 of the wages of the employees, without additional holidays in return.

A "symptom".

To the reluctance of the unions, the employers rely on the work of the Economist from MIT, Martin Weitzman, mid-1980s, analyzing declines in wages as a factor of damping of the shock of recessions and a means of preserving employment. But economists are divided on the macroeconomic effects of such a phenomenon. For the Nobel Prize in economics Paul Krugman, the decline in wages syndrome is primarily a "symptom of a sick economy" and could, to the contrary, contribute to worsen the jobs crisis by depressing consumption and increasing debt of households. According to Paul Krugman, the precedent of the Japanese crisis, where the salaries of the private sector had declined by more than 1 between 1997 and 2003, shows that "wage deflation can lead to economic stagnation"..