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Yesterday we asked whether any of you are experiencing falling wages. Economist Ian Shepherdson reminded us that true deflation is a combination of falling prices and falling wages.

Check the comments on that item, if you haven't lately. What you're telling us is that you're seeing an overall drop in compensation -- but that sometimes, it's a bit disguised. David writes?

My company is a large (60,000+ employees), well known manufacturer of consumer, government and military electronics. This morning, they announced that in 2009 they will suspend matching employee 401K contributions. I can still contribute to my 401K, but the company wont match any of my contribution. It also canceled bonuses for 2009 (which was expected).
Even if you take into account that not all employees get 401k benefits, thats a pay cut for thousands of employees in the US.
In addition, the top two officers of the company have voluntarily taken 25% pay cuts.
I guess that means deflation is here for me at least...
Interesting how they hit the 401k first. I guess they think that people who are not planning to spend the money immediately are less likely to miss it.

categories: Economic Scene

1:22 - December 17, 2008

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