Just a quick one tonight, before the weekend. While catching up on my weekly news reading, I noted an article here in the Puget Sound Business Journal reporting that a number of key executives at University of Washington have agreed to donate 5% of their salaries to help fund additional student scholarships. These executives include President Mark Emmert, Head Football Coach Steve Sarkesian, and several other noteworthy figures at the school.
Now some people may poo-poo this gesture, suggesting it’s politically motivated or just a drop in the bucket in terms of what these folks actually pull down each year in compensation, but I think it’s pretty darn cool, myself. Not knowing of any evidence that suggests otherwise, I’m going to be optimistic and assume these individuals are making these gestures out of mostly altruistic motives. And if you’re still having a hard time giving high income-earners like this any credit for this type of gesture, just for fun, I’d hold up the mirror and ask: have YOU ever voluntarily taken a pay cut?
Along these lines, while it may not be a popular stance to take, I’d suggest that one of the big challenges of the current economy — especially when it comes to job creation — is that while the revenues of organizations can rise and fall dramatically, the average employee never expects (much less volunteers!) to take a pay cut. Most workers, in fact, expect their salaries to steadily increase regardless of the profitability levels or financial challenges of their employer. This has more or less always been the expectation, hasn’t it? In terms of the American work paradigm? So in times like these, when a ton of financial strain is being placed on organizations, many of them unfortunately are left with little choice but to lay off workers or crack the whip on their current staff to work longer hours, rather than adding new employees. The expense is just too tough to bear, when you’ve already got a huge payroll to meet and no flexibility to bring the costs down. That’s my point of view, at least. And while I know there are arguments one could make to the contrary in terms of corporate greed, and companies not sharing the wealth during the good times, I’m speaking mainly about the backbone of the U.S. economy — small-to-mid-sized businesses in the private sector who, by and large, are pretty ethical and intent on doing the right thing.
In fact, the PSBJ article reminded me of a situation I encountered around 10 years ago, during the dot-com bust, when one of my best friends was working for a high-tech company that was facing tough times — and the company owners allowed all of the employees to vote on whether they’d rather have the company lay off 10% of the workforce or instead institute an across-the-board 10% pay cut. As it turned out, the workers (including my friend, I believe) voted overwhelmingly for the layoff. They decided they’d rather see some of their colleagues lose their jobs than take home any less pay, themselves. So again, the fact that a group of UW executives would donate 5% of their compensation back to the school is a pretty impressive gesture, from my perspective. Kudos to them!