WSJ: some firms move gingerly to rescind salary cutsPosted: March 3, 2010
The WSJ’s Paul Glader reports that some firms are cautiously rescinding salaary cuts imposed last year:
Hard-drive maker Seagate Technology Inc. and New York Times Co. are among the concerns restoring full salaries for some but not all employees. Hewlett-Packard Co. granted one-time bonuses after cutting pay, though it may not permanently reverse the cuts.
FedEx Corp. is resuming some raises, but from levels that were reduced by pay cuts. Computer-storage giant EMC Corp. fully restored pay in January only after monitoring financial performance for six months.
The tentative approach is part of the reason that wage growth is muted even as the economy starts to rebound. Revenue growth remains shaky, so CEOs are reluctant to increase costs. With unemployment at 9.7%, executives are also betting they can keep employees motivated and productive without boosting wages. In the past 12 months, average hourly earnings have risen 2%; in January, earnings rose 0.2%.
Inflation Watch has been covering this trend for awhile.