Pay cuts

Today's Inquirer included a story about how Ballard, Spahr, Andrews & Ingersoll L.L.P is cutting compensation for its more junior lawyers as a way to cope with recessionary pressures and a decline in the law business. And Reed Smith L.L.P., a Pittsburgh firm with a big Philly presence, said it would cut salaries of U.S.-based associates by 10 percent.

Given these kinds of pay cuts and those that will surely affect automotive employees in the wake of the GM bankruptcy, it seems that the assumption of even modest wage increases year over year is less of  longer a sure bet. In fact, according to a survey by Mercer, the employee benefits consulting group, one in three employers planned to freeze or reduce salaries for employees in 2009. The two-thirds who do plan to increase compensation will up it by an average of 3.2 percent.

The survey shows more variability in pay. Employees in manufacturing, information technology, engineering, human resources and logistics generally saw increases. Even law had a slim increase -- maybe enough to buy a lunch or two. Overall, compensation slid in the fields of finance, sales and marketing. Raises particularly went to employees in the trades, production and service, as well as to office, clerical and technical workers.

Next year, companies are a little more optimistic, figuring that they'll be able to provide raises to 88 percent of their employees. Let's hope that's a signal for more hiring.