There are at least four ways of meeting a decline in labor demand: laying off workers, cutting nominal annual salaries, cutting hires, or reducing hours. It is difficult to lay off tenured faculty; but in this recession, universities are using two other methods of cutting payroll.
Some schools have imposed faculty hiring freezes. Others are furloughing faculty: Arizona State, for example, has imposed 15 days of furlough over the next six months. Many years ago, Michigan State met a budget crisis by postponing the implementation of a previously agreed salary increase, essentially a wage cut.
Despite tenure, senior university faculty members are not immune to recession-induced budget crises. Our only consolation is that layoffs are rare. On the other hand, in the real world a furlough usually means less effort is required of workers; not so in universities. North Carolina State is proposing a five-day furlough this spring, with each faculty member choosing the days; but teaching days cannot be taken as furlough.
I was furloughed by Michigan State many years ago — but the furlough was the week between Christmas and New Year. These are really just pay cuts by another name, and I resent the attempt to hide that fact and the attempt to deliver the same service to students at lower cost. University administrators should be more honest about this.