At Black & Decker, "since we already had some employment-level cuts, we wanted to do this as an alternative and hopefully reduce the number of jobs that we cut out," said spokesman Roger A. Young.
Both Black & Decker and Avatech say they hope to restore pay when business improves.
Wage cuts aren't a pure negative. A 10 percent pay decline is better than the 100 percent a layoff brings. Economists have long argued that more flexible wages could reduce layoffs and shorten recessions.
But combined with this recession's job cuts, which have now surpassed those of the severe 1981 downturn as a portion of the economy, wage reductions seem to demonstrate deep weakness.
As much as anything, Fed Chairman Ben Bernanke is trying to avoid deflation - the prolonged and widespread decline in prices that characterized the Depression. Falling wages, which are the price of labor, are a deflationary symptom.
U.S. pay has been under pressure for years as competition from overseas workers reduced the demand for domestic labor. Also, soaring medical care costs have left less money for companies to boost take-home pay.
But widespread pay cuts would be a new phase. To be sure, so far there is no wage deflation in the official figures. Wages and salaries on average were 2.7 percent higher in the fourth quarter (not counting inflation) than a year earlier, according to the Labor Department's employment cost index.
The conventional wisdom is that wages are still what economists call "sticky" - unlikely to decline even with a collapse in demand for work. In hard times, the thinking goes, employers fear demoralizing remaining workers by cutting pay.
"Reducing the pay of existing employees was nearly unthinkable because of the impact of worker attitudes," Yale University economist Truman F. Bewley wrote a few years ago in Why Wages Don't Fall During A Recession.
I was unable to reach Bewley to see what he thinks now. Falling wages, however, are the latest of many once-unthinkable events telling us that this recession needs a new textbook.
