Salary Freeze: Actually Might Help

I happened to scroll across Brian Yoo's blog where there he made reference to freezing salaries not being a good way to manage a firm. This idea was from an original post made by Jon F. Both students make a good argument for their perspective; however, it seems that they might be arguing about two different points. Brian's blog gives suggestions that firms should implement to help pull themselves out of the economic pit. On the other hand, Jon is arguing about how upper level execs would prefer to take their bonuses, even when their company has had to lay off lower level workers. From that, he implies that freezing wages could assist firms in managing their company through this tough time. I agree with Jon, but not just in the company sense. If firms, counties, unions, legislation, and more would be willing to freeze their wages, each entity would be able to save more money.

I found an article on the Boston Globe informing us how two more Boston unions have agreed to freeze their wages. Unions, who fight to make their work rights heard and job conditions better for its workers, are willing to sacrifice their raises in order to protect other workers' jobs. This goes in line with Jon's post, where corporate execs would still take a larger check instead of helping people keep their jobs. Now, not everyone is willing to freeze their salary. Out of the 44 unions in the area, only 20 have agreed to the wage freeze. Others refuse to participate until they see the financial details and benefits from this offer, which is perfectly understandable. A union among those who have not yet agreed are the Teachers Union. For this particular union, I have a skewed opinion. Although I believe that freezing wages could improve the financial position of the county, if the Teachers Union agrees, they will have to let off a good number of teachers and teachers' aids. By doing this, you can save money, but you take a chance of hurting your education system. We would have to determine whether the cost savings will be equal in value to the education backslide.

Those last few comments could be seen as speculation and/or a slippery slope. True, but with the way our economy has been sliding down the recession roller coaster, I wouldn't put that option past us at the moment. In general, a freezing of the wages is another option to helping the current financial situation. Brian is correct in the fact that there are other ways for the aforementioned entities to save and manage themselves during this time. However, Jon's post puts the upper level execs on "front street" and makes us aware that there are some people who, even during this time of turmoil, still don't have their priorities in order.

Sources:
1. F, Jon. "Salary Freezes." Goldman, David. "25% of companies plan salary freeze." CNN Money. 9 February 2009. 23 March 2009 <http://enterpriserisk-jonf.blogspot.com/2009/02/salary-freezes.html> <http://money.cnn.com/2009/02/09/news/economy/salary_freeze/index.htm?postversion=2009020914>.

2. Yoo, Brian. "Freezing salary is not the good way to manage a firm or business." 20 March 2009. Online Business Advisor. "Promote An Employee Only When They Are Qualified." Online Business Advisor. 26 July 1999. Dhanil. "How to Overcome Economic Crisis."31 October 2008. 23 March 2009 <http://rmi4350brian.blogspot.com/2009/03/freezing-salary-is-not-good-way-to.html>.
<http://www.onlinebusadv.com/?PAGE=176>. <http://dhanil.blogspot.com/2008/10/how-to-overcome-economic-crisis.html>.

3. Globe Staff. "2 more Boston unions agree to wage freeze." The Boston Globe. 23 March 2009. 23 March 2009 <http://www.boston.com/news/local/breaking_news/2009/03/2_more_boston_u.html?p1=Well_MostPop_Emailed6>.