New York - Here's the vacation no one wants, courtesy of the recession: Forced time off without pay.
Financially struggling American universities, factories and even hospitals are requiring employees to take unpaid
"furloughs" - temporary layoffs that amount to one-time pay cuts for workers and a cost savings for employers. This year, the number of temporarily laid off workers hit a 17-year high.
"If they do it once, I think it's easier for them to try to do it again," said Carrie Swartout, who researches traumatic brain injuries at the University of Maryland Medical Center. Maryland is requiring unpaid time off for 67 000 of its 80 000 employees as it struggles with a budget crisis. The state says the furloughs will save an estimated $34m during the fiscal year.
State governments, facing lower revenues but stymied by the long process required to cut public sector jobs, are using furloughs as a quick way to trim payrolls. Private-sector businesses - from automakers to small businesses - are shutting down factories and offices as sales drop.
The temporary layoffs are "kind of employment purgatory, but it's better than the alternative," said Carl Van Horn, a professor of public policy at Rutgers University. They're a typical response to decreasing demand in a recession, although this round is slightly worse than past bad recessions, Van Horn said.
'That's a huge chunk'
Of 10.3 million unemployed workers in November, roughly 12% were unemployed because of temporary layoffs, according to data from the Bureau of Labour Statistics. The last time this many workers fell into the category was February 1991, when 1.4 million workers were unemployed because of temporary layoffs. As a proportion of the total work force, workers on temporary layoff are roughly 1%, nearly the same now as 17 years ago.
The numbers, based on a Census Bureau survey of households, likely understate temporary layoffs. The survey asks about participants' working hours during the prior week, so a worker who knows he faces a temporary layoff later in the month would not be included.
Swartout, the 28-year-old Maryland researcher, could lose as much as $800 in pay, or nearly 2% of her salary, depending on how long she's furloughed. "That's a huge chunk," she said.
At state-funded Winthrop University in South Carolina, workers are being asked to stagger days of unpaid leave as the state's sales tax revenue declines. Professors were told to take nine furlough days without cancelling classes or office hours, missing meetings or interfering with any other university responsibility. They are required to take the days before June 30, when the university's fiscal year ends.
Like other workers facing forced time off, Pope said his family will have to cut its spending.
Thousands of workers left idle
For factory workers, unpaid time is coming in the form of extended shutdowns as manufacturers try to reduce inventory of everything from aluminum to newsprint to fertiliser.
This month, RV maker Winnebago Industries said that all its workers, including chief executive Bob Olson, would take an unpaid week off during the current quarter, along with a two-week production shutdown during the holidays. 3M Co. said early this month that it had ordered some workers to take vacation or unpaid time for the last two weeks of the year. Computer maker Dell in November asked employees to consider taking unpaid vacation days during the fourth quarter.
Chrysler, General Motors and Ford have all extended their annual holiday shutdowns, typically the last two weeks of the year. The moves will idle tens of thousands of workers both at the major automakers and their suppliers. Tire maker Michelin, parts makers BorgWarner and Gentex Corp have also announced shutdowns of varying lengths beginning in December and ending in January.
- AP