Even the Employed Lose with Hour and Wage Cuts

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They'll also have to start footing the bill for 25% of their health-insurance premiums, which had been fully paid by the organization.

Daniel Reidenberg, executive director of SAVE, says he's also considering reducing staff hours. But he is worried about potential consequences. "Rising anxiety and depression means the need for our services is greater than ever before," says Reidenberg. "It's the worst possible time for us to be cutting back."

"A Step Back"

For many workers, hours have already been cut. As of July 10, Matt Garville, 23, will no longer be working Fridays at his job as an account coordinator for a Manhattan public relations firm. That means a 20% salary cut, along with the loss of his health benefits. Having graduated from Fordham University in 2008 with a degree in economics and journalism, Garville started working at the firm just three months ago. "I really like it here, but I am worried," he says. "I thought their hiring me meant it is [a] relatively stable [job]. I guess not."

Garville says the pay cut means he won't be able to afford moving from his parents' home in Old Tappan, N.J., into New York City to live with friends. "It's a step back," he says of the pay cut. "No one wants to take a step back." He is trying to make the best of the situation by making use of his newly spare time. He says his order of business on days off will be running errands he previously didn't have time for, like getting his hair cut and his DVR player fixed. "Then I'll be networking," he says. "These days, no job is secure."

With the job market on such shaky ground, it can be hard for many workers to believe the economy is producing "green shoots" that point to better days. While Action Economics' Englund is still hoping for a return to positive economic growth in the third quarter of this year, he says troubles in the job market could jeopardize that timing. "If income isn't growing and if hours worked don't rise in the second half of the year, it's going to be hard for the consumer to recover," says Englund.

Herbst is a reporter for BusinessWeek in New York.

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