Felix Salmon, after noting that FedEx has announced across-the-board pay cuts for just about everyone:Drum summed it up perfectly: Heads I win, tails you lose! In boom times you get laid off, in slack times you get your pay cut.
There's been a huge shift in power in recent years from labor to capital: corporate profits have been rising much faster than wages for some time now. It makes sense that capital would make use of its newfound power to reduce labor costs in a deflationary environment of rising unemployment. During the boom, companies laid off workers because those workers demanded, and cost, too much money. Now that workers have lost their negotiating leverage, we might start seeing more across-the-board pay cuts.
Labor may finally be gaining an ally in Washington. Rep. Hilda Solis of California will be nominated as labor secretary by President-elect Barack Obama. Solis co-sponsored the Employee Free Choice Act in the 110th Congress and earned a 100% rating from the AFL-CIO last year.
Maybe there really is a Santa Claus after all.
(More on Solis at BFM.)