Unemployed find new jobs may come with pay cuts

01.02.09
By Sarah Beldo

The choice between unemployment and accepting a much lower salary than you are used to is not a pleasant one, but it is becoming an increasingly common situation.

An article on CNN Money explores the current job market, in which more people are opting to work for less in order to secure a steady job.

In 2008, the job landscape changed significantly, with unemployment levels rising to 6.7 percent by the end of the year - and experts predicting they will climb further in 2009.

Many companies that have managed to avoid layoffs have chosen to chop existing employees' pay instead, or to cut back on their benefits. The unemployed who are looking for work are likely to find new opportunities to be scarce.

This has led to a situation in which many people are willing to sign on for a salary that is a fraction of what they used to earn. According to figures from the National Employment Law Project, 63 percent of unemployed workers would do so.

"For people who have been laid off, this is obviously a buyer's market. We're seeing pay levels in new positions coming down," Ravin Jesuthasan of Towers Perrin told the news provider.

For those who accept a new role that pays less, adapting to a new lifestyle may be a challenge.

You may have to get used to a new way of living in which you avoid credit card debt, downsize your living situation, sell possessions, do without small luxuries such as cable or even relocate.

Experts suggest that if you are struggling to pay off your credit card debt, you should contact your creditors to see if you can negotiate lower monthly payments. Lenders will be more open to suggestions if the subject is broached early on, rather than when you are already in over your head.

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Salaries are shrinking in the tough economy