Daily Archives: May 5, 2009

Wage Cut


The economy is re bouncing. Dow jumps. The soaring of share in dices is spectacular. The recession is slowly fading.  These sentiments send signals of happiness. There is a  spread of warmth and submissive look up.

The other side of the coin presents a grim, glum   efficacy. There is a predominant wage reduction in all segments ,and in all countries over the world. Wage cut does not impress a robust economy. When the going is good , there will not be any thought to scale down the pay. As  the administration envisages a shrink in its profit, it tightens its purse. Employees , do not shift jobs or retort against the down scaling ,for fear of not finding a suitable opportunity. This again  tells us about  the weak economy.

The slimmer pay packets bring wih them another baggage of woe. The mortgage  crisis falls heavily on the shoulders.Less pay indicates difficulty to pay  interest, which at  anyday will not go down.  Saving becomes a remote possibility ,as there is cut in wages.. Spending also loses its glamour , as there is no or less money in hand.. The chain of vicious sequences, right from wage cut, mortagage , saving , spending , illustrate the regiment we are in.  

The economy will be levelled before this year is out. This is the prevelant hope .But the thorn in the bush is the rising unemployment. Stabilising the economy is a welcome step indeed. But ,creating jobs , is most imminent , to resurrect  the dangling economy. If this not given acute attention, then there is all pssibility of the economy taking a reverse course.

Nations should direct their steps to stimulate the economy, by augmenting jobs, by diffusing stagnation and arresting deflation.