My company just cut salaries company wide, mine was only by 5% but despite the shock, it's better to have this really nice job that no job or a retail job(which I swore never to do again).

@logicalnoise: I'm there with you. 2 salary cuts so far, but still better than the alternative.

Too bad government doesn't want to give up some power in these times. Property tax and dining out tax is still sky-high. People might be enticed to buy more things if there weren't 4-5 taxes on every dollar they spend. At least the federal income tax came down at the start of the year - that helps. Now if localities could get their acts together.

The company I work at is making more money and is busy as ever, but they used "the economy" as an excuse to forego cost of living increases, bonuses, and to cut 401k contributions while raising health insurance. Yes, I am thankful to have a job, but the owners are just being greedy and taking advantage of the employees in these tough times.

It's definitely "spooked" me but in a different sense. I cut alot of spending and putting any extra cash to getting car paid off ASAP and been doing so since everything went south. Now less then a month away from paying off car in 1.5 years instead of 3 like it was initially, I'll feel better if the worst hit as I won't have that over my head.

@Saboth: They might have done it in good faith too though.

Where I work, for instance, the impact of economy trails by at least 2 quarters. Also they might be afraid that in the future they might lose some business if the economy does not improve soon. Maybe they are just building a pool of capital for such times. Maybe they are cutting down on other things so that they do not have to do layoffs.

Sadly the management does not always make it clear why they are doing it, and they might just as well be greedy, but I am just saying that maybe they do have good reasons not driven by greed for doing these things.

It's funny. I remember several weeks ago while listening to Marketplace on NPR that economists state the economy will rebound ONLY when consumers are SPENDING.

Well, if we are facing uncertain job security, the mortgage crisis, among other factors, what person in their right mind right now is willing to spend?

I'm in the same boat as well. I was going to lose my job at the end of June when I started working even harder. The new hire they had in Singapore fell through so they kept me on since the budget that was for the new hire is coming to me. Now I'm finally being noticed by the upper management and getting praises.

But do I start spending again? NO. Because I could still lose my job. This is definitely trying times right now and for most people, including me, I'm not risking it. Only buying what I need and saving the rest.

It puts most people in a dilemma too. Should I spend to get the economy going? But if I'm in danger of losing my job, why should I spend when I need to keep saving to save my own ass?

@MostlyHarmless:

Yes, you could be right, but in our industry, effects seem to be pretty instant. We were told at the start of the year that they would revisit the raises/bonus issue in June to see how we are doing. Well, we have done 90% as well as last year (election years are when we make huge money...typically the year after an election year is a slow year). So we will probably make 20 mill profit this year, and we made 23 last year, which is awesome. Well, June came and went without a peep from management....

We're doing pretty well financially, but we still live frugally so we can stay that way in an emergency. The only reason we could afford to make COBRA payments for five months when the last company my husband worked for went bust at the start of this economic mess was because we'd lived frugally even when they were paying him very, very well.

Now he's making even more, but we're still not being stupid. We discussed it and decided that, if the new company gets the contract it's hoping to this week, all should be well for a few more months at least, and we've saved up at least 6 months worth of living expenses (including COBRA), so it was okay to spend $80 at Oriental Trading in craft supplies and some splurgy stuff for our daughter's birthday in the fall (as in, supplies to hand-make some awesome decorations, so it's still frugal to spend $8 on materials to make a pinata over $15 on a premade one).

So we're affected by the consumer confidence issue insofar as we do scrimp a bit more than otherwise, but frugal folks are always frugal in good times and bad.

@Saboth: It can be tricky to balance because if you don't have a job, a tax cut doesn't really help. Or if you're not eating out anymore to save money, the take out/food taxes don't really affect you. Now those types of cuts may encourage others to spend, which may eventually improve the economy and the jobless rates, but may take a long time. Of course, if you're cutting taxes, you'll need to cut spending. If you cut spending, then that means that some government workers will be out of a job. So, your gains would be offset by more people being on the dole until the tax cut benefits can be felt. Given our current economic times, that can be dangerous to wait that long. So, its not always simply "cut taxes" as the solution. It can be a combingation of things.

@kaceetheconsumer: PS: that $8 on pinata materials will actually last beyond one pinata too. So very frugal-licious!

My wife just got laid off, which eliminated 40% of our household income. So we went from spending fairly responsibly, putting some money away, but generally not too worried about making some fun and/or frivolous purchases to FULL LOCKDOWN. We've stopped eating out, stopped going to movies, cut services, put off projects we wanted to do. We're cutting several hundred dollars per month out of the economy, and we're definitely not the only ones.

Here's a question: does anyone here know anybody who's gotten a stimulus job? I live in Massachusetts and I can't even remember hearing about a single stimulus funded project starting up.

Actually, I'm starting to enjoy shopping out of my closet, deal hunting, and having a cushion in my account. Why stop now?

I'm not as worried about being laid off, but I know if I did then the new job prospects would still be pretty slim.

@chucklebuck: Funny, I just asked this question at a community development agency yesterday. I asked, "Where are the stimulus jobs that were promised in public works and government programs?" In reply I got blank stares and a few wry guffaws.

I guess I have been locked down for a long time. Movies? Too expensive. Cable? Not worth the money. A gadgety internet phone? Put that thing away. I guess I am a cheapskate when it comes to such things, and it's really come in handy.

I am single so that does kinda make it easier (and since the last paragraph indicates my idea of a date is apparently to sit around with the lights out, that's probably not going to change). No one to argue with over money.

But my consumer sentiment is pretty low as well: even though I have secure employment I don't feel as though I should be buying a lot of stuff, mostly because the economy is a bag of mixed signals right now. Stocks? Up. Unemployment? Also up. And there is more bank fun to come: credit cards and commercial loans that will go bad. Amex just wrote off 10% of its credit card loans last quarter, yikes. And Capital One lost money last quarter. What's in yer wallet? A credit card whose bill I can't pay!

So I think the fun isn't over by any means.

@kaceetheconsumer:

Mad props to you. Even though you guys are doing well, ANYTHING can happen and it seems like you guys are preparing yourselves for this.

@Saboth: I'm completely convinced that many of these major corporations are simply using "the economy" as an excuse to cut costs in ways that would normally generate much worse PR.

Having "bad economy" all over the news is basically a "fire hundreds of thousands of people and not be called evil on the national news" card.

@chucklebuck: Some guys with shovels are doing some unnecessary, short-term road work, but that's about all.

@Saboth: I would have thought that you'd like the fact that state and local gov'ts had to balance their budgets every year. Yet you're complaining that they need to raise revenues to match spending. Do you wish that they didn't have to? Or just that they magically could give services that are magically self-paying?

Yeah it's one thing to not buy a TV or a new car. But when you have to re-use plastic bags and parchment paper, buy everything you need online when it's cheaper, never eat out, make as much as possible from scratch and your entertainment budget is netflix basic, bicycle maintenance and a bag or two of coffee beans each month, just to try and build SOME kind of future (engagement ring / wedding / house etc.) it's just flat out depressing. Stagflation can kiss my frugal ass.

I am hanging on to every penny. My company actually got rid of some staff, gave the rest of us a 10% pay cut, no cost of living increase or merit increases this year, stopped overtime, and stopped matching the 401K plan. Our department is down from 15 1/2 people (one person floated between our dept and another) to 12. Oh, and the workload is more than before, due to the cut in staff and no overtime allowed. Coincidentally, sales figures are even with last year. Humm. I feel like I'm being taken advantage of.

@chucklebuck: Yes; we have some highway resurfacing going on with stimulus funds. I know a few people connected with that and of course that's a bunch of jobs. Not sure how many miles of it they're resurfacing, so I don't know how long those jobs last. It's badly-needed roadwork, though.

I'm making more money than I've ever made in my life, but I'm not spending it the way I would be if things were different. I have no fear of losing my job, but it just seem wasteful to spend money on needless crap. Maybe this economic mess really has changed our financial behaviors.

@Zclyh3: Yup, you never know when an entire sector of the economy can go POP.

And if all goes well, then you have extra money to spend on something you otherwise wouldn't! Or have a nicer retirement! Yay!

@Eyebrows McGee (now with more baby!): I read a lot about what those stimulus jobs actually are, and I think most of them are for construction and/or road projects, which is fantastic if we were still in the 1960s in which men were primary breadwinners. Sorry, but if men lost their jobs, they could probably pick up a shovel or operate a bulldozer. Women like me who are 5'3 and weigh much less than the average male? Not so much.

@Trai_Dep:

Truthfully, I think all government spending needs to be slashed in half, but that's just me. Each year spending and taxes seem to go up, but the average person's wages seem to stay the same. The less government intrusion, the better.

@chucklebuck: My state legislature bitched and moaned about taking stimulus money and then cut state programs just enough so they could make up the difference with stimulus money. Net gain of jobs = 0.

@Trai_Dep: Here's an interesting article on the topic you raise. I'd like to know what you think: [www.reason.com]

*I am not trolling. The issue raised in this article is one I've thought about frequently the past couple years.

@tbax929: it may have changed our behaviors in the (very) short term, but it certainly has not changed human nature. We've been competing with each other over the acquisition of stuff for hundreds of thousands if not millions of years. Doesn't matter if it's coconuts, females, territory, shiny stones or pieces of paper.

But who knows, we may look on this day many years from now as the start of a new chapter in human history. One can only be hopeful.

@chucklebuck:

I think I read that a lot of the stimulus money for projects went to states where they really didn't lose that many jobs in the first place, but the congressmen of that state pushed for funds or something. Like states with major layoffs got a minimum amount of funding, and states that didn't need it started working on their "bridges to nowhere" projects.

@ChuckECheese:

That's a pretty interesting read, and just gives some numbers to something I've suspected for awhile. So the economy is in the crapper, and joe smith is supposed to tighten his belt, but governments want to raise taxes because they don't want to give up any of their programs/power that they've steadily been working on? Sorry, with 10% unemployement and wages being cut, governments are going to NEED to shrink.

@pecan 3.14159265: I think the first wave of jobs is infrastructure based, because that money can be put to work very quickly. Future waves need a bit of time. For example, funding alternative energy projects may take a year or so, because you need to get some infrastructure in place. The manual jobs will likely come first, but then the adiministration, project planning, etc. should follow.

@Saboth: Having no idea of what the gross margin of your firm is, from your figures, they made 10% less this year than last, and there isn't another big election for another 2-3 years and let's say they have $20m in reserves. Capital markets are expensive relative to two years ago, so that option's constrained.
I don't know the burn rate of your company, but unless it's quite small, it sounds like your bosses are being prudent. It's not good news individually, I realize, but can you see why they're being cautious?

In other news, the Bank of Canada declared the recession over in Canada, due in large part to consumer confidence. Of course, it wasn't as deep a recession as in other parts of the world.

We aren't consumers we are citizens.

@Trai_Dep: Your company isn't alone, by the way. Nor, as the article suggests, are consumers behaving any differently. Monetary policy is neutered for the time being. Investment and private finance has also slowed. No one is able to prime the US economy's economic pump, except for the Federal government.
Do you see now why canny economists were pushing for a stimulus bill, and Progressive ones were pushing for a larger one that passed? Do you see why those arguing we should do nothing are wrong?
No one likes the situation that we were crammed into by bankrupt, wrong-headed policies, but now that we're here, we have to be responsible and try to reverse the damage done ASAP (which will, unfortunately take longer than a few weeks or months).

@Saboth: Yes, and the point of the article is emphasized by the fact that gummints vastly increased the amount and rate of spending during the late 90's to mid- 00's when they had surpluses, and are somehow unable to even get things back to the level they were at 4 or 5 years ago. Instead, they are implementing doomsday plans. I find it confusing: In CA there was an 80%+ increase in gov't spending in 5 years. So even with a considerable year-over-year decrease in revenue, wouldn't the gov't still have more money than they had, say, 3 to 5 years ago?

I remember a story from Maine in about 2003, where it was reported that millions of dollars (about $30 million if I remember correctly) vanished from state welfare coffers in a brief period. I am concerned, given contemporary commonplace stories about fraud, that we won't eventually learn there has been widespread, deep and systematic pillaging of public coffers these past several years.

@Saboth:

Please, head to the CBO website and take a highlighter to the specific funds that can be slashed IN HALF and moderatley fulfill their function.

Your beef with government spending is the average conservative argument that uses half of the equation. It's fine to say "hey, taxes suck", but complaining about stagnant private sector wages isn't specifically a government issue, its a private sector issue.

@Saboth:

Dear Anti-Socialists:

Got news for ya. There has been socialism all along. Capital and cash is constantly being redistributed - only it was from you, to corporations, their officers and stockholders, and anybody who had access to the till.

Love,

Capitalism

@lpranal:

pshaw, this isn't nearly as bad as the GD, and did things change then? For a generation, yes. But my grandparents frugality certainly didn't translate to my baby-boom parents.

I can tell you that some of the stimulus money is being spent on resurfacing Hwy 340 in northeastern WV, VA and MD (near Harper's Ferry). It's badly needed and there are only a few crossings over the Potomac and Shanendoah Rivers in the area.

I wish they'd rebuild those bridges, too. They get a pounding due to the heavy commuter traffic.

@lpranal:

You had me until you mentioned the engagement ring/wedding nonsense. The amount of money spent in the wedding-industrial complex is ABSURD!

Unless you're slashing your budget to afford a $90 tungsten wedding band and a $100 white-gold diamonique wedding ring/engagement ring.

I know I'm judgemental, but cripes folks, it isn't necesarry, and you'll only incur the spitfeul wrath of vengeful gods if you want sympathy (reusing parchment paper?) to splurge on a big ass party.

@umbriago:

Here's a trick, look to see how many companies write those debts back on at the end of the year.

It's common for companies that have really high receivables to write them down during the year (when the SEC doesn't require audited filings) to justify rapid departures from prior models, only to find out those "bad debts" were really paid off or factored to investment banks.

@Urgleglurk:

I believe there are quite a bit of funds being spent in MD, per an article I read in the WaPo a month or so back. Road work, sign manufacturers, etc. But still jobs for those who were under/unemployed.

@DollaValueLIFO:

Also, when managed properly, not being profitable in a down economy isn't such a bad thing for most companies. The stormy cloud cover provides opportunities to pay no income tax and not have investors freak out so much so long as the company is generally sound.

Also, can we stop this hullabalo about "worst job slump in eighty years (since the GD)". It's bad, but we're 15% better off with respect to unemployment figures (which are always off, given the number of underemployed/contract labor folks on the unemployment rolls) than we were during the GD, and the economy (in terms of the market) is the highest its been since the whole thing crapped itself last October.

Things are improving, and in my opinion, thats how you have to approach it. I've been out of work once this year, and got cut back 40% last year when things hit the wall, so I know it isn't fun, but it's turing around.

@MostlyHarmless: Exactly. One of the biggest scares last fall was that companies couldn't borrow short term loans. I would hope that the continuing pull backs are just to build up capital.

@ChuckECheese: You can all but guarantee that stimulus funds (our tax dollars) will be abused and stolen in the coming years. It was already stolen by the government and it will be stolen once again by government "officials".

@DollaValueLIFO: The 10% figure is the "official" figure. Unemployment is much higher than 10%. It's in the mid to high teens and is approaching 20%. The "official" numbers don't include all former employed/job seekers who have given up on finding a job.