By CityTownInfo.com Staff
June 5, 2009
As companies try to reduce layoffs by requiring furloughs, reducing work hours and cutting salaries, families are being forced to tighten their belts and change their lifestyles.
The New York Times reports that Sharon and Jeff Ferrell of California have cut back on haircuts, pet vaccinations and dance lessons for their daughters after Jeff was forced to accept furloughs two days a month. The couple has two sets of twins, ages 7 and 20 months, and Jeff works as an industrial hygienist, evaluating health hazards in the workplace. His salary was reduced to $4,856 a month from $5,308, creating a huge dent in the family's wallet.
"People just say: 'Oh, it's just a 10 percent pay cut. Cut the fat out of your budget,'" Sharon told the Times. "But we've cut the fat. We've cut the fat all along, and so this is really pushing us close to the bone now."
MSNBC.com reports that according to a survey of 142 human resource experts by consulting firm Watson Wyatt, 17 percent of employers required mandatory furloughs in April--up from 11 percent in March. Similarly, Hewitt Associates, a human resource company, found that 70 percent of 518 firms surveyed had implemented or were considering implementing furloughs.
"Furloughs are an unfortunate consequence of a lot of bad decisions, greed and poor judgment that are hurting a lot of people," said Myrtle Bell, associate professor of management at the University of Texas at Arlington, who was quoted by MSNBC. "Some people really live paycheck to paycheck, and these furloughs are very difficult for them. However, the bottom line is that if furloughs help employers weather the storm and help employees avoid being laid off, I think they are useful."
Yet families like the Ferrells are struggling to make ends meet as a result. They now shop at a no-frills discount grocery chain and frequent The Dollar Store regularly. Recently, the family dipped into some savings bonds that Sharon's grandparents gave her as a child.
In a related story, The Washington Post reports that with so many families being forced to tighten their belts, frugality is becoming in vogue--even among those who can afford to purchase more.
"You can go to a social and everybody's talking about how to save money, and that wasn't the case a few years ago," said Gina Lincicum of Virginia, who keeps a blog, Moneywise Mom.
Rachael Woodard, who founded TheCouponClippers.com, agrees. "You had to get around a certain crowd to talk about how much you saved or didn't spend because you would be called cheap," she said. "Now it's okay to talk about it."