Wage Cut

(noun)

An economy-wide tool to manage wages, most commonly as a response to inflation, and usually below market level, as part of an incomes policy.

Related Terms

Examples of Wage Cut in the following topics:

  • The Pullman Strike

    • The Pullman Strike began in 1894 when nearly 4,000 employees of the Pullman Palace Car Company began a strike in response to wage cuts.
    • The conflict began in the town of Pullman, Illinois, on May 11 when nearly 4,000 employees of the Pullman Palace Car Company began a wildcat strike in response to recent reductions in wages, bringing traffic west of Chicago to a halt.

  • Factories, Working Women, and Wage Labor

    • Wage labor displaced reliance on apprenticeship and family labor.
    • Wages were cut in many factories, and employees who had once labored for an hourly wage now found themselves reduced to piecework, paid for the amount they produced and not for the hours they toiled.
    • In 1821, the young women employed by the Boston Manufacturing Company in Waltham went on strike for two days when their wages were cut.
    • In 1824, workers in Pawtucket went on strike to protest reduced pay rates and longer hours, the latter of which had been achieved by cutting back the amount of time allowed for meals.
    • In the 1830s, female mill operatives in Lowell formed the Lowell Factory Girls Association to organize strike activities in the face of wage cuts and, later, established the Lowell Female Labor Reform Association to protest the twelve-hour workday.

  • The Beginnings of the Labor Movement

    • After striking for higher wages, in 1806, eight union leaders were brought to trial and accused of conspiring to increase their pay rates.
    • In 1821, the young women employed by the Boston Manufacturing Company in Waltham went on strike for two days when their wages were cut.
    • In 1824, workers in Pawtucket struck to protest reduced pay rates and longer hours (which were a result of employers' cutting back the amount of time allowed for meals).
    • In the 1830s, female mill operatives in Lowell formed the Lowell Factory Girls Association to organize strike activities in the face of wage cuts, and later established the Lowell Female Labor Reform Association to protest the 12-hour workday.
    • American men and women with families to support grudgingly accepted low wages in order to keep their jobs.

  • Workers Organize

    • His objectives were "pure and simple": increasing wages, reducing hours and improving working conditions.
    • The first of these was the Great Railroad Strike in 1877, when rail workers across the nation went on strike in response to a 10-percent pay cut by owners.
    • Two years later, wage cuts at the Pullman Palace Car Company led to a strike, which, with the support of the American Railway Union , soon brought the nation's railway industry to a halt.

  • The Rise of Unions

    • His objectives were 'pure and simple': increasing wages, reducing hours, and improving working conditions.
    • Wage disputes have been the single most common cause of strikes in the United States.
    • In times of economic depression, layoffs and wage cuts angered the workers, leading to violent labor conflicts in 1877 and 1894.
    • In the Great Railroad Strike in 1877, railroad workers across the nation went on strike in response to a 10 percent pay cut.
    • Two years later, wage cuts at the Pullman Palace Car Company just outside Chicago led to a strike.

  • The Idea of Economic Citizenship

    • Emphasizing efficiency, Ford more than doubled wages (and cut working hours from nine a day to eight), attracting the best workers and sharply reducing labor turnover and absenteeism .
    • Ford's employees could and did buy his cars, and by cutting prices over and over he made the Model T cheap enough for millions of people to buy, in the U.S. and in every major country.
    • Henry Ford became the world-famous prophet of high wages and high profits.
    • The basic fear was that large numbers of unskilled, low-paid workers would defeat the union's efforts to raise wages through collective bargaining.

  • Budget Cuts

    • Reagan made cuts to many key anti-poverty, community development and education programs, earning criticism as biased in favor of the rich.
    • Despite the fact that TEFRA was the "largest peacetime tax increase in American history," Reagan is better known for his tax cuts and lower-taxes philosophy.
    • Reagan's policies proposed that economic growth would occur when marginal tax rates were low enough to spur investment, which would then lead to increased economic growth, higher employment and wages.
    • These views were exacerbated by the fact that Reagan's economic regimen included freezing the minimum wage at $3.35 an hour, slashing federal assistance to local governments by 60%, cutting the budget for public housing and Section 8 rent subsidies in half, and eliminating the antipoverty Community Development Block Grant program.
    • Following his less-government intervention views, Reagan cut the budgets of non-military programs including Medicaid, food stamps, federal education programs and the EPA.

  • Free Enterprise Economics and Reaganomics

    • When Reagan proposed a 30% cut in taxes to be phased in over his first term in office, Congress balked.
    • Opponents argued that the tax cuts would benefit the rich and not the poor, who needed help the most.
    • Reagan's policies proposed that economic growth would occur when marginal tax rates were low enough to spur investment, which would then lead to increased economic growth, higher employment, and higher wages.
    • These views were exacerbated by the fact that Reagan's economic regimen included freezing the minimum wage at $3.35 an hour, slashing federal assistance to local governments by 60%, cutting the budget for public housing and Section 8 rent subsidies in half, and eliminating the antipoverty Community Development Block Grant program.
    • The weakening of unions contributed to the leveling off of real wages for the average American family during the 1980s.

  • The Politics of Inflation

    • The declining value of Continental currencies was hardest on Continental soldiers and the poor, as their wages bought less.
    • The British made the situation much worse by imposing a tight blockade on every American port, which cut off almost all imports and exports.
    • Indeed, in 1783 the soldiers and officers were given land grants to cover the wages they had earned but had not been paid during the war.
    • The greatest burden was borne by the soldiers of the Continental Army, whose wages—usually in arrears—declined in value every month, weakening their morale and adding to the hardships suffered by their families .
    • These soldiers wages declined in value every month, weakening their morale and adding to the hardships suffered by their families.

  • The Last of the New Deal Reforms

    • Roosevelt rejected the advice of his Secretary of Treasury Henry Morgenthau to cut spending and announced more New Deal programs.
    • In February 1938, Congress passed the second Agricultural Adjustment Act (AAA), which authorized crop loans, crop insurance against natural disasters, and large subsidies to farmers who cut back production.
    • It established a national minimum wage (25 cents per hour in the first year after the Act was passed), overtime standards, and prohibited most employment of minors (individuals under the age 16 or 18, depending on the nature of work) in "oppressive child labor."
    • A handful of liberal measures did pass when the Conservative Coalition was divided (most notably the minimum wage laws).