New Normal: Living With a Pay Cut

Hidden from unemployment data are thousands of workers with slashed salaries.

ByABC News
June 17, 2009, 4:09 PM

June 18, 2009— -- Tami Bartel describes her work as "a tough, lonely job under the best of circumstances."

She's a truck driver who works nights, puts in many miles a day and is often far away from home. But, until now, "it was one of the best ways I knew for a gal with no college degree to make a good living."

Then last fall, her hours started to get cut. Then her company slashed salaries 10 percent. Not only was she working less hours, but now she was making less money to do so.

Her monthly take-home pay went from about $3,200 to $2,300.

"I have had to make choices between eating and paying bills. Steak? It's a thing of the past. Grocery shopping? Only buying what I have to have, and buying that at a discount grocery chain that I never would have shopped before," Bartel said. "Sleep? No more peaceful slumber -- restless, disturbing dreams."

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And what about her plans to eventually retire?

Bartel hopes to just "pass in my sleep because right now I don't ever see that happening."

Since the recession started in December 2007, the American economy has shed 6 million jobs. Unemployment last month rose to 9.4 percent and is expected to soon top 10 percent. But those numbers don't tell the full story.

There are thousands of other workers who still have jobs but have had their salaries slashed 5 percent, 10 percent or even 20 percent. Others have been furloughed, forced to take a week or two off from work without pay. They might still be lucky enough to have a weekly paycheck but that check has shrunk, making it harder to survive.

"Frequently, people are being asked by their employers to take a little bit less money to keep everybody on the job. And we're seeing it in all kinds of places and circumstances," said Peter Morici, an economics professor at the University of Maryland's Smith School of Business. "It seems to be a prevalent practice in this recession and we didn't see it nearly as much in the past."

For some it might be working three or four days a week instead of five. For others it means a straight cut in their pay. (Morici himself has to take one week of unpaid leave.)