US newspapers have done it. California police have, too. Governments in California, New Jersey and Ohio say it will save the budget. Forcing workers to take unpaid time off is a new version of the US layoff.
The involuntary furlough, once a staple of boom-and-bust blue-collar industries like mining or automaking, is making its way into white-collar workplaces across the US as employers try to cut costs quickly amid a deepening recession.
With some 2.5 million jobs lost in the past six months, few furloughed workers are complaining about the unpaid time off.
“I think some people are more comforted by the furlough because they believe there is less risk of layoff,” said Dennis Hoffman, an economics professor at the University of Arizona who has been told he has to take 15 unpaid days off by July.
Hoffman isn’t complaining about the pay cut, figuring it is better than losing more staff at the 114-year-old university. But like consumers across the US, Hoffman views the forced time off as another reason to cut back on spending, a trend that is delaying a general recovery.
“It just doesn’t feel comfortable to be out there spending ... you wonder when the next shoe will drop,” Hoffman said. “Between this and the stock market, it is quite a bump in the pathway toward saving for retirement.”
At the Gannett newspaper chain, which publishes USA Today as well as dozens of other dailies across the country, journalists are also ambivalent about news they all have to take a week off — unpaid — before the end of next month.
“People are looking at this as: ‘If I can try to save my job and the other jobs around me, I’m willing to do it.’ I haven’t heard any grumbling about it,” said one Gannett journalist who declined to be identified because she feared she could lose her job.
“I’ve gone through several rounds of layoffs and those were much worse,” the veteran writer said. “Once you’ve seen your friend laid off, you’d much rather do the furlough.”
At the University of Arizona, staff were required to take between nine and 15 days off by midyear, usually a day at a time spread out over 20 weeks. At Gannett, workers are being furloughed for an entire week before the end of March.
Other workplaces are experimenting with a week off every month, three-day weekends and even simply cutting pay and letting workers choose when they lose the hours.
But while workers may be grateful they are not being laid off, experts say the spread of the unpaid furlough through state governments, universities, publishing firms and chemical companies is not the result of corporate altruism — it’s simply the best and fastest way to cut payroll costs.
“Obviously companies are under a lot of economic pressure and [furloughs] are something that can be done relatively quickly. The alternative is layoffs — and that can take months or even years,” said Francine Blau, a professor of industrial relations at Cornell University.
There are other benefits to employers.
“Companies are also experienced with — and much more wary of — the damage layoffs can cause and the risks to their ability to rebound when the economy turns around if they cut too deeply,” said John Challenger, chief executive of outplacement consulting firm Challenger, Gray & Christmas.
Whether furloughs can be implemented smoothly is an open question. Unlike an assembly line that can be shut down, the workload in many professional workplaces doesn’t really stop at the end of a shift. Workers bring work home, answer e-mails at night and cram for big projects to meet deadlines.