24 year old Kitch works full time as a social media manager and has a side hustle doing freelance content and photography work. With many of her clients in the hospitality space, Kitch explains that she “lost three clients fairly immediately who all paid me a fortnightly amount, so that means I lost about 40% of my annual earnings in one hit.”
Not long after that, Kitch was hit with another pay cut, this time from her full time employer. “My full time job reduced my pay by 20%, so that was another big hit to my income.” In a modicum of good news, her hours were also cut to four days. Many other pay slashing employers have cut salaries but still expect the same, if not more output.
Despite the income losses, Kitch said she’s actually feeling pretty positive about her financial situation. With savings in place and notably less outgoings with isolation, she says, “the positives are that I’ve spent less money generally, not buying lunch or coffee and spending zero on public transport.”
“I’ve also had my gym membership suspended, which is another $12 a week saved, but overall I’m definitely worse off.” That said, financially-savvy Kitch said she thinks she’s coped well with the loss of income because she “never lived above her means” anyway.
Her main concern is that her contract permits her employer to extend the 20% pay cut until December. “Even if we’re back to work in July and things are somewhat back to normal, I’m a bit worried about the fact I could be earning 20% less for the rest of 2020,” she explained.
Kitch isn’t alone in having her pay cut. A vast number of companies have done the same, and while in some cases employees can exercise a level of choice in the matter, the fraught job market doesn’t leave them in a great position. A popular sentiment among employed workers right now is that they feel they’ve got to go above and beyond just to stay employed. Bosses have their staff right where they want them – unlikely to take the risk of finding another job, and at the forefront of an economy in turmoil, lucky to still have an income.