Amid the changes in the global economy, there has a been a genuine loss in monetary value. There’s just less money to go around than there was before and individuals and institutions must understand that. Estimates range from 17% to 24% of monetary value is gone - more in some highly monetized places than others.
Money is not like matter that cannot be created or destroyed.
I was impressed and moved to think about this when Sister Cathy, the principal of my daughter’s high school got up at parents’ night and said that times were tight and that instead of laying off some teachers or staff, everyone took a 3% pay cut and they found savings elsewhere. “It takes everybody here to run this school and to provide the students with a Marian High education,” Sister Cathy said. “Instead of laying anyone off, we decided to keep everyone and live with a little less.”
The pain that comes with being out of work for one is greater than everyone taking a step back, I thought.
Marian High is working its way through 2009-10 with less and appealing to parents and alumni to help out more. So should our other institutions. Health care jumps out at me instantly as health insurers heartlessly raise rates, no one takes a cut and people suffer and die because they cannot afford care or a small percentage of workers get laid off so everyone else can get their raises because that is how it works. Unions sacrificing members’ jobs or entire places of work because there is no elasticity of wages and benefits is another.
Less money should means all take a step back in some ways. Not in lockstep and not in some mandated government way. But rational management should look at cuts as part of cycles and flexibility to manage all costs including salaries, wages and benefits to fit current economic times.