Newspaper article The Evening Standard (London, England)

How to Cope with a Pay Cut

Newspaper article The Evening Standard (London, England)

How to Cope with a Pay Cut

Article excerpt

Byline: George Trefgarne

REMEMBER Mr Micawber, the character in Dickens's David Copperfield, who is in a perpetual struggle to stay one step ahead of his creditors? He had a famous principle: "Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds and six, result misery."

Well, we are all Micawbers now. The family finances of what seems like the entire nation are as precarious as a sandcastle, as we all scramble to keep on top of our expenses in the face of falling incomes. Millions of people are just a red letter or two away from penury. Result, as Micawber would say, misery.

Or is it? Actually, there is a perverse if gritty pleasure to be gained from thriftiness. For the first time in a generation there is no need to be embarrassed when you think something is too expensive.

Perhaps the workers of 2009 should be called Generation M, for Micawber. The original Generations X and Y were slackers, archetypes of those far-off giddy days, the Nineties, when Clinton and Blair were in charge and the dotcom boom was in full swing. In those days, people were voluntarily downshifting and giving up some of their incomes in the hope of doing something "fulfilling". But for Generation Micawber, there is nothing voluntary about it.

On the contrary, we are confronted with a fight to make ends meet.

What has gone wrong is that for the first time since the Thirties we actually face falling incomes. This has undermined the central premise of the modern workplace, indeed of capitalism itself, that if you work hard and obey the rules, your income generally rises over time.

Now, the only people to receive pay rises are members of the RMT while the CBI warned in March that the overwhelming majority of its members would freeze wages this year. …

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